Why "Lean" matters

Automotive Design & Production, May, 2004

As Julian Page points out in his just-published Implementing Lean Manufacturing Techniques: Making your System Lean and Living With It (Hanser Gardner; 278 pp.; $54.95), there are plenty of books and magazine articles out there about lean manufacturing. I Googled "lean manufacturing" and obtained about 228,000 hits. Does the world really need another book about lean?

I have to answer, "Yes." And in all candor, I must acknowledge that the book in question does carry the imprint of Automotive Design & Production magazine, so I am not completely disinterested.

But in point of fact, all too many firms continue to struggle with becoming lean. Sure, the major auto manufacturers all have their own variants of the Toyota Production System, which is arguably the touchstone for all such programs (Ford likes to sometimes say that it all started with Henry Ford; while it may be true in that he established a production system, (1) flexibility certainly wasn't part of it and (2) it would be hard to imagine that there was on-going continuity and improvement of his system). Page's focus, however, is for the small and medium firms that are really undergoing the squeeze nowadays and need a means by which they can deal with it without having to file Chapter 11 or being absorbed by another firm. Page points out that when the Japanese manufacturers developed their production systems, they did so because "they faced intense competition and a shrinking market demand for their products." Without a doubt, there is intense competition in the market today for the vehicle manufacturers, with aggressive competitors at both the low end (e.g., Kia and Hyundai) and at the top (e.g., BMW and Lexus). Meanwhile, in the middle, Toyota, Honda, and a revitalized Nissan are making it all the more difficult for the bread-and-butter vehicles of the Big Three.

These conditions can lead to shrinking market demand, especially for the lower-tier suppliers. Or if not a shrinking demand, then an increasing demand that there be "cost-downs." What that means is that even though your margins may be paper-thin right now, they're going to get Saran Wrap transparent in short order. A question that needs to be asked by anyone is whether it is possible to survive under such pressures. The answer to that question, too, is "Yes"--but only if the approach to manufacturing is one that is lean.

Appropriately, the first chapter of Implementing Lean Manufacturing Techniques is titled "Removal of Waste." That is certainly the fundamental of lean. The key question that people need to ask, as Page points out, is: "If I did more of this activity, would the customer pay me any more money?"

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When Dennis Pawley was the vice president of Manufacturing at the then-Chrysler Corporation, he would often point out that if it took seven turns to tighten a fastener, the customer really only cares about the final one. The other six are really waste. (Which explains why alternatives to threaded fasteners are often sought in lean assembly operations.) There are a couple of things to note about Page's question. First of all, it is about doing something. All too often, lean is the purview of those who sit around and talk about it (which explains the multitude of books, magazines, seminars, and consultants). Page promotes the idea that lean must be something that is performed.

Second, Page's question, while something that can be answered by anyone who is involved in the operation, is one that is essentially the kind of question that executives and managers need to ask about every aspect of their operations. Lean is not something that is simply done by the folks on the factory floor. Lean is a way of doing business. Without the top people in the firm supporting and understanding lean (let's face it, if lean was natural, everyone would do it and there would be no need for people to write books like the one in question), then it simply can't happen. The well-engrained status quo--a.k.a., the inefficient mass production techniques--will simply reassert its primacy after the initial infatuation with lean has passed unless it is something that management is fully behind. Page points out, "the main problem [in implementing and sustaining a lean program] will come from people who are resistant to change"--and the people he cites are in management.

If you're looking for a place to start, or for a different spin, or a reaffirmation of what you are pursuing, then Implementing Lean Manufacturing Techniques is highly recommended. And if you're not looking for any of those things, what are you looking into? Early retirement, perhaps?--GSV