People Innovation Excellence

Flow to Learn

https://cft.vanderbilt.edu
ISE Magazine – Volume 49: Number 05
By Michael Ballé and Daniel Jones

Lean is often seen as a way to become more competitive by improving the management of operations – that is reducing waste and automating process. It sounds simple, but why do some succeeded quite visibly, while others stumbled after getting only low returns for years after implementing lean thinking? Having the right paradigm might be the answer

First of all, we must understand where the flaws of the traditional paradigm lie. The first misconception is thinking that customers were assumed to be locked in once acquired. This is totally not true since customers can also buy similar products from competitors or solve their problems using different method. Either way, they will find it harder to sell, and the solution to it is to discount, which will reduce the revenue that will also lower operational cost and product quality. The second misconception is believing that the costs can be reduced by outsourcing some vital functions to the lowest bidder and that a few staff can optimize processes across the board. Leaders then complain about how hard it becomes to execute their brilliant strategy. The third misconception is assuming that it’s always good business to replace humans by machines and that it’s always worth it to invest in better machines to reduce unit price. This does not hold true. An example is shown at the floor shop at a car manufacturing company whose complex robots had a lot of difficulty dealing with components sourced from low-cost suppliers, causing delays and quality issues. They reverted to manual welding rather than using the robot, reducing quality issues by 85% and doubling productivity. Because the operators themselves had been deeply involved in forming this solution, morale rose considerably in this area.

Lean thinking is people-centric. It is not about standardizing all processes to be able finally to replace all decision-making by artificial intelligence and all physical processes by robots. Some principles of lean thinking are:

  1. Deliver high quality products quickly through just-in-time delivery to customers
  2. Halve any batch to avoid creating an overburden on both people and equipment as well as structural overcapacity
  3. If a defect is found, fix it immediately to avoid the ripple effect of defects propagating through the flow
  4. Engage all employees to explore better ways of working
  5. There has to be mutual trust between management and employees

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