6.30.2009

3M’s of Lean: Myths, Misconceptions and Misunderstanding

Leansters know the ‘good’ 3Ms of Lean are mura (extra burden), muri (imbalance) and muda (waste). Today, we can add three more ‘bad’ Ms’s to the list: myths, misconceptions and misunderstanding.

There are many examples of bad 3M’s about Lean in the news. Here is yet another...

From Crain’s Cleveland Business, the title, “Swagelok Boss: Lean Operations Not for Us” begs us to read immediately. Why? For those familiar with the company, Swagelok is a successful, privately owned, billion dollar company. It has never had a layoff in its sixty-five year history, despite being headquartered in Solon, Ohio – a state that has taken its share of manufacturing hits. As I scanned the title, I wondered if we might learn something from this manufacturer via the author Dan Shingler:

“But he (Mr. Anton of Swagelok) hardly was spouting the gospel as they've (audience) come to know it. Manufacturers have been told to be lean, to keep inventories low and turnarounds fast, to make stuff “just in time” for delivery — and to jettison employees quickly when there is not work for them to do.”

Mr. Anton said Swagelok has often been successful doing the opposite.

“We will selectively build inventory to keep people working,” he said. “I know that sounds very non-lean and old-fashioned, but it's consistently worked for us."

I’m trying to remember the last time I heard of anyone serious about lean make the recommendation that employees be jettisoned when there is a downturn, or, when employee layoffs resulted in a lean success. Instead of explaining the rationale behind Swagelok’s inventory strategy as a solution to meet the needs of the customers and business, the article sets the tone for the usual hit piece on Lean: here is why it can’t work here, it doesn’t work for our customers, therefore take your Lean thinking and…

I digress.

“…plenty of area companies are sweating out the decision of whether to keep employees they hope to need later, or to cut costs while the slump is on. Some have no choice but to let people go. But many are putting their employees through extra training, hoping that when the economy does turn, they'll have the same skilled workers as before, but with even higher, more diverse skill levels.”

So this is the strange dichotomy of the media and Lean. Media thinks Lean = Layoffs. And this is the first M, myth. Lean is hardly about layoffs, although some companies end up resorting to layoffs and everyone seems surprised. Leansters, if you are saying Lean is going to avoid layoffs – STOP, you can’t make that promise unless you are in the driver’s seat. Would we be surprised if layoffs came without Lean? No, the layoffs came because of leadership, which is the main reason why lean initiatives or no, companies sometimes fail.

Lean has been evolving into something bigger than simply JIT inventory reductions, JIT is a rudimentary and crude explanation of Lean at best, if not half the story. This is the second M - Misunderstanding. JIT doesn’t mean ZERO inventory. It means the right inventory at the right time at the right quantities. If Swagelok’s strategy is to scale back on low use SKUs and ramp up high use SKUs, is it possible that they have weighed the cost of inventory against the cost of attrition and retraining? It is possible, yet instead of digging deeper, Mr. Shingler portrays not one of Swagelok’s strategies in the article as anything remotely Lean, except for the prospect of layoffs in a downturn. Leansters know that the extra training and skill building now in the downturn will make Swagelok stronger when the economy rebounds, assuming cash flow can support it. Yet, the media story is that these activities are not Lean simply because somebody is temporarily increasing their inventory for critical SKU’s in a downturn in order to keep their valuable employees. Isn’t Toyota, at a basic level, doing the same thing as Swagelok?

“Mr. Anton is going one step further. He said he has hired a handful of high-level technical people, including one Ph.D.-level employee, who were brought on specifically to help the company develop products for the years ahead. ‘This is a great time to be building your talent pool,’ Mr. Anton said.”

Well, I give him points for being half lean just for not hiring another MBA. ;)

Seriously though, here is another M - Misconception. Lean is very much about growth. Many people think that Lean = low variety of products and services when coupled only with high volumes. Toyota has 17 base vehicle models in the U.S. market with many configurations. Ford has 18 and that is after they brought back two versions (sedan and wagon) of the Taurus only after enduring consumer backlash over the discontinuation of one of the best selling vehicles ever. And for years now, Ford has been scaling back from their heyday and Toyota has been expanding trying to “emulate” GM, according to new Toyota leadership. So who is Lean? According to this anti-lean article, Swagelok is doing some very 'non-Lean' things, like increasing the skills of its people and developing new products in preparation to skewer the competition when the economy rebounds? But they aren’t Lean, eh?!

Perhaps the problem here is the label itself. The word Lean conjures up images of fads, programs and initiatives, which turn people off to the discussion quickly even when they may have much in common. Perhaps the term could be better used as an adjective that best describes the way people think and act when confronted with a problem. I could be wrong, but I wonder if Swagelok is thinking Lean and doesn’t know it.

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3 Comments:

At June 30, 2009 at 10:45 AM , Anonymous Peter P Patterson, MD MBA said...

Nice post Brian. It's instructive to study the reasons people don't get it yet.

As a practitioner of one of the applied sciences, I feel a new classification coming on:
the components of the LAME (Lean As Misguidedly Executed).

COMPONENTS OF LAME:

1. Myths.

2. Misconceptions.

3. Misunderstanding.

I'll bet we could make an entire monograph about LAME :-)
/Dr. Pete

 
At June 30, 2009 at 12:39 PM , OpenID darrint said...

Lame, cute.

Most "lame" comes from bad journalism. Most journalists work in dying organizations that are paralyzed in their massive waste. Consequently, most journalists can't see waste, and don't know what they are looking at when they see a lean organization.

 
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