The Biggest Barrier to Lean Six Sigma
I recently reread the 1990 book, The Machine that Changed the World by James Womack, et. al. It's about a 5-year MIT study of the future of the automobile. The essence of the message:
U.S. and other manufacturers need to embrace Lean and the Toyota Production System (TPS) if they want to survive.
It's been 16 years since that book was published, but last year GM closed plants, laid of tens of thousands of workers and offered all kinds of incentives to get customers to buy their excess inventory. So did Ford.
Overproduction is Waste
In the 1990 book, the authors report that 8 million more cars were produced than the 50 million demanded by customers. They said: "The world has an acute shortage of competitive lean-production capacity and a vast glut of uncompetitive mass-production capacity. In the absence of a crisis threatening the very survival of the company, only limited progress seems to be possible. GM is the most striking example."
Haste Makes Waste, but Speed Makes Profit
In 1986, here's the comparison between GM and Toyota:
(source: Figure 4.1, pg. 81)
|Gross Assembly Hours||40.7||18.0|
|Assembly Defects per car||1.3||0.45|
|Assembly Space per car||8.1||4.8|
|Inventories of parts||2 weeks||2 hours|
|Engineering hours per new car||3 million||1.7 million|
|Lead Time for new car||60 months||
Less space, less time, less inventory, fewer defects. Is it any wonder Toyota makes more profit than the big three automakers combined?
"The truly lean plant has two key organizational features:
- It transfers the maximum number of tasks and responsibilities to the workers actually adding value to the product.
- It has in place a system for detecting defects that quickly traces every problem once discovered, to its ultimate cause."
The authors state: "Lean production is a superior way for humans to make things. It provides better products in wider variety at lower cost. Equally important, it provides more challenging and fulfilling work for employees at every level, from the factory to headquarters.
The whole world should adopt lean production, and as quickly as possible."
GM and the other mass-production automobile manufacturers in the world have had 16 years to pick up this ball and run with it. Unfortunately, when you fall behind in the Lean Six Sigma game, it's hard to catch up. An issue of the AIAG (Automotive Industry Action Group) newsletter, Actionline, earlier this year had an article that argued that Embracing Heavy-Truck "Boutique" model could lure buyers back to showrooms. Has this guy checked out the rising cost of gasoline?
The main barrier to Lean Six Sigma, as far as I can tell, isn't the methods or tools, but the thickness of the human skull. As one prospect told me at a recent tradeshow: "We won't do it [Lean Six Sigma] until they force us to do it." Jobs continue to migrate offshore and downsized employees continue to whine, but they don't seem to realize that this "culture of incompetence" is a huge part of the problem.
It Won't Work For Me
A recent letter to BusinessWeek stated that 80% of U.S. Workers are employed in services, 19% in manufacturing, and 1% in agriculture. Maybe this is why so many people tell me that Lean Six Sigma is just for manufacturing. It doesn't work for service. Hospital workers tell me it works for inpatients, but not outpatients. No matter who I talk to, they are all trying to convince themselves that it works for someone else, but it can't work for me because I'm different.
Everybody wants to feel special, different, and unique. Get over it! From a purely process perspective, every process has suppliers, inputs, processes, outputs, and customers (SIPOC).
If your internal or external customers experience any kind of defects, mistakes, errors, delays or slowness of service, then you can use Lean Six Sigma to make your business better, faster and cheaper before someone else beats you to the punch.
Or you can just hope for the best and pray that your company survives long enough for you to get a pension and benefits. But, according to Shell's study of corporate longevity, few companies live longer than 40 years. And why not? Hardening of the attitudes...inflexibility...a failure to adapt to an ever changing world.
Here's My Point
You can either lead the pack or struggle to catch up. Stop pretending that Lean Six Sigma won't work for you. Stop pretending it won't work because you're special; you're not. Figure out how to adapt it to your business. Reduce delay, eliminate defects, reduce costs, increase productivity and enhance profitability before your global competitors can get ahead of you.
In the early 1900s, most people were engaged in agriculture. But farming has been simplified, automated, and streamlined so that only 1% of the people are required to do the work. Then they all moved into factories which have been simplified, streamlined, optimized, and automated and now off shored to less costly workers. And now they're all migrating into services which will be simplified, streamlined, optimized, and automated and off shored (e.g., call centers in Bangalore, remote reading and evaluation of X-ray and lab results).
If Toyota can build cars in America using Lean Six Sigma principles as well as they can do it in Japan, then the problem isn't geography; the problem isn't process; it isn't Lean Six Sigma methods or tools; it's mindset. Change yours before a crisis changes you.
Rights to reprint this article in company periodicals is freely given with the inclusion of the following tag line: "© 2008 Jay Arthur, the KnowWare® Man, (888) 468-1537, email@example.com."