LEAN or Skinny. What LEAN doesn’t mean.

May 2017 by Andrew McKinna

Over the last six months I have spoken to a lot of people about their businesses, their approach, their beliefs and their objectives. I’ve also read a lot of articles and listened to a lot of opinion. A recurring theme which seems to be in fashion (again) is LEAN [manufacturing].

It is very appealing for a board or senior manager to advocate for LEAN. Why wouldn’t you want to minimise waste. The LEAN outcomes after all are reduced cost, improved quality, and reduced delivery times. Surely these add up to improved profitability and better service. The thing is that most that are talking about LEAN, are misinterpreting LEAN, and mistaking it for skinny. 

An athlete is lean, the malnourished are skinny, and the skinny can’t hope to compete with the athletic, yet this is the mistake many seem to be making. If squeezing a business to the point which impacts a customer’s experience or limits its ability to achieving a strategic objective, you have ceased being lean and have become skinny. 

The central tenants of LEAN, (Just in Time, Pull Flow [Planning], Production levelling, Act on Abnormality, Man/Machine separation, Standard working, and the reduction of Waste [in all its forms]), have their roots in the evolution of manufacturing management thinking, first credited in the 19th century to Benjamin Franklin, adopted significantly by Henry Ford, and gained wide spread recognition due to W Edwards Demming’s work, (also noted for the development of TQM), during the post WWII reconstruction of Japan in the 1950s. It evolved further with the development of Six Sigma at Motorola in the 1980’s and 90’s and “The Toyota Way” in 2000's.  

These different methodologies are very similar in that they provide a structured means of analysing manufacturing data, and understanding and responding to it. They have all been developed in highly complex manufacturing environments, where the amount of information can be overwhelming, and prioritising responses can be difficult. They are a means of structuring common sense and observation, they are not a replacement for it. If the primary piece of equipment on a production line is output limited by a slower down stream process or piece of equipment, simply recording the data will not replace the common sense of recognising and resolving the bottle neck. In fact recognising the bottle neck, and the value of the lost potential on the primary process/machine, will allow you to construct a cost/benefit project P&L for resolving the bottle neck. 

The selective adoption of LEAN however or the misinterpretation of the central elements (mentioned above) misses the point. 

JIT does not mean giving suppliers no notice or placing an order just in time. It means being a better customer, providing better forecasts and longer lead times. It means better planning, and more stable production. 

Pull Planning means understanding your process, and working from your required stock available date, up stream, from the final processing step, up through the manufacturing process, and into the supply chain to set a delivery date for your raw materials. It means being a good customer to your suppliers.  

Acting on Abnormality is the review of your performance to plan, recognising the root cause of under performance/abnormality, and addressing that root cause. The starting point for continuous improvement, of both output and quality.

Man/Machine separation means to develop more automated means of doing the work, relying less on human variation. This improves production reliability in both output volume and quality.

Standard working, Do it the same way each time improves consistency in quality and quantity output.

Reduction of Waste is a by-product of the processes above. Less inventory of raw materials, known production output means less buffer stock, good planning means less wasted time, correcting the root cause of abnormality means less quality losses and time lost. Automation improves quality consistency and volume consistency. 

“The Toyota Way”, takes this further with, Long-term philosophy, The right business process, the development and respect of people, and solving the root problems. This then becomes a business philosophy that can be pursued. These tools don’t replace common sense or a business wide perspective. Are you squeezing the life out of your business, or are you developing an athletic competitor?