Operations & Management
The Lean journey: The never-ending story
March 8, 2007 by Larry Coté
Like it or not, no matter how well your lean journey is going, it’s not good enough. Just when you embrace lean and get your organization squared away, competitors from overseas or across the street will embrace lean and erase your competitive advantage. What can you do? Keep getting leaner!
I received a call recently from an official with the National Research Council of Canada. They asked me to give a presentation on lean manufacturing and lean practices. The request in itself was not unusual – until I learned that the audience would be a delegation of Chinese executives, industry leaders and university administrators. The smallest company represented had 15,000 employees.
My initial reaction was surprise. When I asked why the Chinese would be interested in lean, the response was exactly as I should have expected – they were here to study our methods to see how they could be successfully applied in their environment.
It was with some apprehension that I agreed to do the presentation. Despite every word having to be translated, the meeting went well. The visitors were attentive and took notes throughout. The address wrapped up with a discussion that shed more light on why they wanted to explore the benefits of lean. Labour cost was not their main motivation, although it was still a factor. Their interest was on the other less obvious benefits. Lean, as they very well understood, is about providing the best quality product or service to the customer at the right cost and the right time, all the while creating and maintaining flexibility in meeting constantly changing customer needs.
Even with 10 percent economic growth year after year, China has serious challenges in remaining competitive over the long term. Their economy is, at best, fragile, and growth must be carefully nurtured. They recognize that they must control their need for raw materials and energy. There is also real concern about the potential damage created by their tremendous growth and industrialization. They know that they will have to evolve to meet the increasingly customized needs of client markets. These needs cannot be met by simple mass production techniques and low wages if they want to sustain their competitive edge.
One of the key solutions they see is implementing lean. Lean is not only about using fewer people to accomplish tasks, it is a proven tool that enables companies to:
• Use less space: buildings are smaller, equipment is right-sized;
• Use less energy: smaller buildings, less rework, less scrap (produce only what is necessary), less transportation (internally and externally), and less pollution; and
• Use less material: more efficient use of raw materials, less scrap, buildings and infrastructure require less material, and, of course, less pollution is created.
This visiting delegation was eager to ensure that future generations of Chinese would be able to gain the right knowledge for competitive success. The university representatives stressed their desire to teach their people the “right” way to build products and provide services.
The meeting ended after several hours – they left with pages and pages of notes. I returned from the meeting with an uneasy feeling of having glimpsed the unknown. It is this sense of unease that I wanted to share here. As you go about your day-to-day activities persistently striving to improve your company’s competitiveness, you can start thinking about the impact this encounter – and others like it – may have.
Many companies today feel a little more comfortable since surviving the latest downturn in North America. But the last few years have been nothing more than a practice run where you honed some skills. Now the really big game is about to begin.
Your ambitious overseas competition has also been practising and realizes that to win, they must take their game to another level both strategically and technically. They are not satisfied with their gains in the mass production market.
We have a choice – we can look back and read the history books on how we were once great or we can read about how we continued to lead all the competition and ‘set the bar’ for other industrialized nations. The choice is indeed ours and now is the time to make it!
Larry Coté is president of Lean Advisors Inc. You can reach him by email at email@example.com. The article was originally published in Advanced Manufacturing‘s September 2004 issue.