Lean is Dead, Long Live Lean!

We’ve all seen corporate fads come and go, especially in the realm of management strategies. I wish I had a nickel for every time I heard the word Agile used in various contexts during the last year. The term Lean is no exception.

Lean went from being focused on improving efficient manufacturing processes, to business processes, to everything in between including the conservation of office supplies. If you work in manufacturing, I’m sure you’ve seen someone 5S their desk, complete with a taped boundary of where the stapler should reside.

I’m currently reading “Redefining Operational Excellence” by Andrew Miller and haven’t made it past the first chapter when I’ve encountered an interesting viewpoint. In the text, Miller states that Six Sigma and Lean Manufacturing are both extremely limiting strategies, and even Operational Excellence (OE) needs to be recalibrated.

Good ‘Ol Six Sigma

I think Miller is correct that in the past, companies employed a broad Six Sigma strategy and assumed that once it was fully integrated into their business, they’ve achieved a level of Operational Excellence. His analogy is someone with a Black Belt in Karate assuming to be an expert in all martial arts.

Using a One Size Fits All approach to continuous improvement is never successful. Those of us working in the field during the 90s and 2000s saw this in action. Everyone was required to attend Six Sigma training. Every bit of waste was identified as a defect. And every improvement action had to use statistical tools to measure KPI improvement, regardless of the context.

Miller explains that while Six Sigma is key to identifying and eliminating the root cause of defects, thereby improving quality, it doesn’t help inspire creativity. A few examples include development of the iPod and Dell’s industry-changing online ‘build your own computer’ model.

This doesn’t mean that Six Sigma was a fad that came and went, but that after being misapplied and overused it has now settled back to its core focus.

Leaning In. Or Out?

The same phenomenon has been seen with Lean Manufacturing. Miller reminds us how Lean has been applied across various industries outside of the manufacturing sector, everything from banking to healthcare. If a manufacturing engineer were to tour a modern operating room today, she would recognize the same standard work processes, tool layout, and visualization used in a manufacturing work cell. Two environments where repeatability is ‘a good thing’.

But Miller goes on to show that, like Six Sigma, Lean focuses on the removal of waste and the preservation of value rather than the creation of value. And how Lean is basically a methodology, not a mindset. Indeed, if you only focus on tools and methodologies, creative thinking is left of the shelf. This reminds me of the adage “If all you have a is a hammer, every problem looks like a nail”.

Enter Operational Excellence

With its broad definition, OE has also been applied to a wide variety of industries and challenges. I tend to follow a basic definition of OE since I work in the operations field, where OE is an umbrella term used to integrate various improvement programs that used to existing singularly, but competed for resources. This graphic from Operational Excellence – Journey to Creating Sustainable Value (1) depicts what I mean.

A New Definition?

This limited application is the crux of Miller’s book. Operational Excellence should be a comprehensive approach to improving company performance. Instead of forcing statistical or waste reduction tools to be used in other departments, OE should pull in all four corners of the organization.

A direct quote from the book sets the tone:

Operational Excellence is the constant pursuit of improved performance and profitability in all areas of your organization. It’s a mind-set, not a methodology. (2)

Going Forward

As I continue reading this text it will be interesting to learn from companies that have used this approach successfully.

Is Miller on the right track? Or is Operational Excellence destined to be another hammer overused across an organization, soon to be replaced by the next buzzword? I’d like to hear your thoughts.

Bill Allemon, CEM, CEA, LEED AP writes on the topics of Operational Excellence, Engineering Leadership, Energy Management, and Sustainability. Bill is an engineering management professional with a career progressing through Global Corporate and Consulting roles in Program Strategy, Implementation, Management and Operations.

(1) Mitchell, John S. “Journey to Operational Excellence.” Operational Excellence: Journey to Creating Sustainable Value, Wiley, 2015, p. xix.

(2) Miller, Andrew. “The Need for a New Definition.” Redefining Operational Excellence, AMACOM, 2014, p. 10.