New Thoughts on Lean Concepts

Last November, at the TOC World 2002 conference held at the Mohegan Sun in Uncasville, CT, a number of presenters described successful applications of the so-called Theory of Constraints (TOC) and listed the conditions necessary for implementation. Most of these conditions involved some facet of corporate culture, that elusive mix of morale, motivation and teamwork that makes one company excellent and another barely competent. Similarly, companies that are able to adopt lean techniques typically exhibit corporate cultures that are highly productive and willing to adopt new ideas. For small manufacturers, the message is clear. If management wants a workforce capable of creativity and putting new productivity-improvement ideas into practice, then it must encourage that behavior and forge a lean-thinking culture. This is easier said than done, but research provides a number of recipes for doing it.

At that same TOC World 2002 conference, Chicago Metallic Products, Inc. (Chicago, IL) - a bakeware manufacturer - reported a reconstruction of corporate culture that will probably rejuvenate the company and save it from a slow death due to foreign competition. The key here was education and training for most of the workforce in TOC theory and practice. The investment in time and money was considerable. The Goldratt Institute in New Haven, CT provided instruction and consultation, but the entire owner-management team bought into the program and sold it to the workforce. Employees saw that top management believed in improvement, effecting real change and spending money on professional development at each and every level of employment. Results included reduced raw material inventories, reduced operating expense, more frequent calls on customers and the ability to make money on small orders.

 

Learn from the Success of Others

Remembering that conference presentations tend to be big on successes and short on accompanying failures and drawbacks, it is important to study the strategy, content and implementation of these kinds of projects in small companies. They give insight into what can work and what conditions are necessary for success. Every small metals-manufacturing firm in the U.S. today is under pressure from foreign competition, and state taxes and labor laws tend to be burdensome regardless of lobbying efforts to reduce them. If a firm can show steady, annual increases in productivity and can report modest success in building its customer base, then it will probably proceed into the future with profitability.

Management has to spend some time and effort reading about successes in the industry, and successful implementations of lean philosophy and theory of constraints are a good place to start. Every company is unique. What works in one can be absurd in another. Yet ideas culled from industry experts, academics, trade shows and publications can be customized and used to great effect. Management must pull itself away from mundane work pressures and find the time to study industry intellectual happenings carefully. There may be diamonds in the gravel!

 

Even Small Businesses Need to Be Lean

Most small manufacturers in the U.S. are short on engineers, capable toolmakers, good software people and seasoned production managers. Quite often, firms just grow from the determined efforts of a founder and his or her family and seldom have a blueprint to follow as a corporate culture takes shape with time. A culture typically just evolves. It may be inherently addicted to lean processes, quick to respond to customers, and dedicated to continuous improvement and high quality just by chance. It may never develop the kind of conflict that creates a union and a succession of poorly designed, restrictive labor contracts.

What is most likely is that the firm avoids unionization but lacks a culture that regenerates itself with exciting change, continuous productivity improvement, revenue growth and profits that are shared by employees at all levels. Real incentives to perform are rare. If present in a small firm, they are typically not sufficiently dramatic or exciting to markedly influence behavior. Lean concepts, for example, will not be grabbed and implemented by employees who see no benefit to themselves in doing it. Job preservation has no meaning in a firm that periodically lays off people and whose owners park expensive automobiles in reserved spaces close to the front entrance.

Lean culture is a state of mind. Constraints are often mental - attitudinal - not physical. Published research on corporate culture is worth reading. It is worth one's time to listen to academics who talk about it. The thoughtful owner-manager likely will find some small enlightenment, some shared experience that could trigger a break-through in his own organization. An exotic travel prize for the year's best team Kaizen project is one far-out idea that has worked for some small and not-so-small companies. After all, gold nuggets are hidden in the dirt, and one must pan for them in the proper running stream and recognize them when they suddenly appear. The constant search for company improvement is a similar process.