Monday, November 28, 2011

The Challenges that come along with Lean Manufacturing

The concept of Lean Manufacturing has certainly transformed the way Supply Chain Management was perceived. It brought in strict measures inside the supply chain that eliminated all entities that did not add value to the customer. There has been extensive research to understand how Toyota was successful in implementing its Lean Manufacturing technique and many organizations have tried to mime their process. However, I always wondered if such a system could be so effective and wanted to probe on what kind of challenges that such a system brings in with itself. The research did throw some light on some interesting issues that gave answers to my questions.

Any system is free from being flawless and the Lean process was no exception. The system had its own share of criticism and was claimed by some, as the reason for the infamous Toyota recall in 2010 due to the sticking accelerator pedals issue. I was curious to know if Toyota's over focus on lean process turned out to be an obsession that blinded them from looking at quality aspect of production. Deep research and post-mortem of this issue has indicated that the lean process was not cause of the trouble for Toyota while it was observed that in the last few years Toyota failed to follow many of the principles it contributed to developing previously, resulted in the crisis. However, people still blame the lean process for Toyota's ultimate debacle, which the company is working to recover from. Will this leave a scar in people and prevent them from innovating?

An interesting question that I wanted to find answers for was whether such a practical principle can involve innovation, or would the disciple and rigor involved in the system, hamper the innovative thoughts. Can lean co-exist with innovation? The TPS case study touched upon the challenges involved in suggesting ideas to improve process. Any process improvement recommendations would have to go through the entire chain and will need the blessing of the group before it is put into practice. An interesting thought that came across was whether this really discouraged employees and stop them from innovating. "According to experts at The Boston Consulting Group (BCG) and Wharton faculty, lean and innovation can indeed complement each other, and it's about time they came together. Lean brings structure and predictability to innovation, and sharpens the distinction between idea generation and the development process, they say. Both share a common goal: to meet customer needs in a cost-effective manner. And lean can help empower researchers and reduce uncertainty in the innovation process itself"1. Best living example for this was the success of Hollywood animation company Pixar, the maker of blockbuster movies including the "Toy Story" series and "Finding Nemo," which embraced lean process but also made sure that innovation continued to flourish. The company is able to create a situation where projects that are likely to fail are eliminated early on. The involvement of the people of the company determines how well this system leads to a business transformation

Talking of the people part of things, it is a given that the success of a system in an organization ultimate depends on how well it is embraced by every individual in the firm. Toyota's lean process was a huge success for it was appreciated by every employee and it became a part of the company's DNA. Many Companies that tried adopted a similar system failed miserably as they tried to force it into employees when it was not appreciated well. “First of all, executive management must be committed to lean. If lean is a “grass roots” effort, it will have limited success. This is because lean involves so much of the organization. It involves procurement, manufacturing, quality, sales, marketing', and human resources. Each of these organizations will need to participate in the transformation. Therefore, the executives must want it. They must believe that it will improve their bottom line.”3. This might result in ultimate failure of the system. Communication plays a very important role here as the success of the system relies heavily on how the message reaches the employees. “An organization has an increased likelihood of initial and sustained success as a lean enterprise. Lean is not something that an industrial or manufacturing engineering group does to an organization; it is a cultural change. The importance of developing a foundation for this cultural change is critical to the success of any organization that begins a lean journey”3.

Though we all know that Change is the only thing that is permanent, we also are aware of the fact that Human beings resist change. I would love to hear your thoughts on how lean manufacturing can be adopted by a company, right from scratch and how it will tackle potential threats of employees carrying the fear of no room for innovation and the challenges involved in sending the right message



2. too-much-or-not-enough-lean-manufacturing/4763


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