hogheavenfarm
Admin
A recent occurrence at my job prompted this musing, and it took me awhile to get my thoughts down, but here is what happened.
Our company has been suffering, like so many others during these past few years, trying to maintain production and staying operational. We have been through a few staff reduction periods, some hire-backs now and then, but largely remaining static. Then our Purchasing guy left, hence the sudden and forced application of ‘Lean’. Now everyone, in every department, is ‘responsible’ for ordering their own items, as we will not be replacing our purchaser, (running lean).
Needless to say, only two weeks in, everything is a disaster. Items are arriving that we cannot identify , (who ordered pizza?),
there is no paperwork for receiving to know what to expect, etc.
It was this application of “Lean” that started me on this thought path, and here is what I found.
It seems to be a common understanding among CEO’s that ‘Lean’ means “doing more with less”. By “doing more”, they understand it to mean ‘producing the same amount’ and picking up some cost savings through reduced unit costs.
‘Less’ generally means less fixed costs, which almost always means ‘less people’.
Let me be clear however, in my experience with several companies, increased profit was never the driving motive, instead they were trying to offset rising variable costs, (fuel, electricity, etc) with a reduced fixed cost (personnel). If a little extra profit came from it, so much the better.
Most were driven by a need to remain viable, not to generate more profit.
Lean, and all improvement concepts in general, utilize a basic law of thermodynamics. Things go from an organized state to a disorganized state without the application of an external energy.
To begin a Lean Journey in a disorganized factory requires the application of energy, and energy in CEO-speak means “money”.
Unfortunately , Lean has been sold as a cheap, or free, concept to the management community. If it hasn’t been packaged that way, then management has an interpretation problem. It’s either one or the other.
Some CEO’s are confused by the combination “Lean/ Six Sigma”. Six Sigma has done a much better job in advertising, and most of top management is aware that it will cost them some money. They accept that, since a Six Sigma project is quite targeted, has anticipated expenses already worked up, and a fairly good idea of the cost savings which have been analyzed by ‘real’ financial people in the organization. In addition, the improvements made are generally targeted towards increased production through new equipment, layout, etc. This is easily cost justified in a Six Sigma project.
Lean tends to be applied more globally across the company. As such, anticipated expenses are harder to estimate, (What? Applying Lean will cost me money?)
, and projected savings are even harder to quantify. This is why top management tends to view Lean as a personnel reduction tool, at least they can quantify that.
The fact is Lean and Six Sigma both will have costs to implement, one is not the opposite of the other.
I have heard many terms for this misapplication of Lean.
Fake-Lean
Pretend-Lean
Lean Lite
I propose “AntiLean”, which is usually the end result. As I have seen Lean applied, the target was to reduce manpower requirements not by becoming more efficient, but by spreading the work of one or more eliminated positions among the remainder of the company. This has generally resulted in a worsening company culture, where the employees are the targets, leading to serious morale problems. What is worse, these eliminated employees are frequently involved in implementing the very scheme that will cost them their jobs.
Lean looks bad at the floor level. Since the factory floor receives very little training in Lean concepts, what they see is what they get.
Until the realities of Lean are adequately advertised and understood, we all need to be ambassadors of the truth. Nothing is ‘free’. Not even quality (sorry Crosby), because producing quality requires an input of energy. Without that energy there is disorganization and chaos. We in the quality profession know firsthand that is it frequently our own energy that keeps the quality at the current level, and how well we communicate that energy to others makes a very big difference.
Disclaimer: I have worked for several companies over that past 12 years, mostly small to mid-size, all privately owned, (read 5-150 employees, and to 40m). I know this can make a big difference in company culture and the way they operate. My views and thoughts here only reflect my dealings with these companies, not everyone in general. I would be interested in hearing your thoughts on this, to see the ‘variation’ among companies and types.
Our company has been suffering, like so many others during these past few years, trying to maintain production and staying operational. We have been through a few staff reduction periods, some hire-backs now and then, but largely remaining static. Then our Purchasing guy left, hence the sudden and forced application of ‘Lean’. Now everyone, in every department, is ‘responsible’ for ordering their own items, as we will not be replacing our purchaser, (running lean).
Needless to say, only two weeks in, everything is a disaster. Items are arriving that we cannot identify , (who ordered pizza?),
there is no paperwork for receiving to know what to expect, etc. It was this application of “Lean” that started me on this thought path, and here is what I found.
It seems to be a common understanding among CEO’s that ‘Lean’ means “doing more with less”. By “doing more”, they understand it to mean ‘producing the same amount’ and picking up some cost savings through reduced unit costs.
‘Less’ generally means less fixed costs, which almost always means ‘less people’.
Let me be clear however, in my experience with several companies, increased profit was never the driving motive, instead they were trying to offset rising variable costs, (fuel, electricity, etc) with a reduced fixed cost (personnel). If a little extra profit came from it, so much the better.
Most were driven by a need to remain viable, not to generate more profit.
Lean, and all improvement concepts in general, utilize a basic law of thermodynamics. Things go from an organized state to a disorganized state without the application of an external energy.
To begin a Lean Journey in a disorganized factory requires the application of energy, and energy in CEO-speak means “money”.
Unfortunately , Lean has been sold as a cheap, or free, concept to the management community. If it hasn’t been packaged that way, then management has an interpretation problem. It’s either one or the other.
Some CEO’s are confused by the combination “Lean/ Six Sigma”. Six Sigma has done a much better job in advertising, and most of top management is aware that it will cost them some money. They accept that, since a Six Sigma project is quite targeted, has anticipated expenses already worked up, and a fairly good idea of the cost savings which have been analyzed by ‘real’ financial people in the organization. In addition, the improvements made are generally targeted towards increased production through new equipment, layout, etc. This is easily cost justified in a Six Sigma project.
Lean tends to be applied more globally across the company. As such, anticipated expenses are harder to estimate, (What? Applying Lean will cost me money?)
, and projected savings are even harder to quantify. This is why top management tends to view Lean as a personnel reduction tool, at least they can quantify that.The fact is Lean and Six Sigma both will have costs to implement, one is not the opposite of the other.
I have heard many terms for this misapplication of Lean.
Fake-Lean
Pretend-Lean
Lean Lite
I propose “AntiLean”, which is usually the end result. As I have seen Lean applied, the target was to reduce manpower requirements not by becoming more efficient, but by spreading the work of one or more eliminated positions among the remainder of the company. This has generally resulted in a worsening company culture, where the employees are the targets, leading to serious morale problems. What is worse, these eliminated employees are frequently involved in implementing the very scheme that will cost them their jobs.
Lean looks bad at the floor level. Since the factory floor receives very little training in Lean concepts, what they see is what they get.
Until the realities of Lean are adequately advertised and understood, we all need to be ambassadors of the truth. Nothing is ‘free’. Not even quality (sorry Crosby), because producing quality requires an input of energy. Without that energy there is disorganization and chaos. We in the quality profession know firsthand that is it frequently our own energy that keeps the quality at the current level, and how well we communicate that energy to others makes a very big difference.
Disclaimer: I have worked for several companies over that past 12 years, mostly small to mid-size, all privately owned, (read 5-150 employees, and to 40m). I know this can make a big difference in company culture and the way they operate. My views and thoughts here only reflect my dealings with these companies, not everyone in general. I would be interested in hearing your thoughts on this, to see the ‘variation’ among companies and types.
