Lean Management for Lean Times?

[David Dodd]

For the past several weeks, the economic news has been almost universally bad. Economic growth has declined significantly and appears to be poised to slow even more. Some prognosticators are saying that our economy is already in recession, and other say it soon will be. The financial crisis on Wall Street has caused stock prices to plunge, and it has threatened to shut down credit markets. The recent passage of the Federal bailout legislation offers some hope, but it seems clear that business conditions will be tough for at least the next several months.

Economic conditions aren't any better in the printing industry than in the overall economy. If any of you attended Dr. Joe Webb's latest economic webinar at WhatTheyThink, you'll already know that inflation-adjusted printing sales have been declining for the past several years and that the downward trend is likely to continue for the foreseeable future. Industry profits are also near a multi-year low, and there's little reason the expect any significant improvement anytime soon.

So, what has all this got to do with lean? Most of the principles and techniques that we now call lean were developed by Toyota Motor Corporation under extremely difficult economic and business conditions, when the company's long-term survival was far from certain. In essence, Toyota became "lean" because it had no real choice. The company had to create new ways of working that would dramatically reduce waste and improve productivity in order to survive.

It is not that farfetched to say that many printing companies are in the same position today that Toyota was in sixty years ago. The printing industry has been contracting for several years, as print faces increasing competition from other methods of communication. The current economic mess will only magnify the problems confronting printing companies, especially if it persists for any significant period of time.

Becoming lean can help printing companies weather difficult times. Lean is not a quick-fix, nor will it "recession-proof" a business, but it can help a company better withstand whatever the economy brings. It will be interesting to see if more printing companies turn to lean to deal with our economic challenges.

 

[Michael Josefowicz]

I found this at WWT this morning:
WhatTheyThink - Printing Industry News - Print Media Academy To Offer Lean Printing Workshop

(October 13, 2008) The Print Media Academy (PMA) and experts of Heidelberg Druckmaschinen AG invites managers, supervisors and key employees of print media companies to a three-day lean printing seminar. The aim of this workshop is to increase dwindling profit margins and uncover untapped print production capacities.

Participants learn how a philosophy of avoiding waste, empowering employees and increasing productivity can make their business much healthier. The emphasis is on synchronizing workflows, raising the standard of service and adding more value for customers.

My experience is that the "empowering employees" part is usually overlooked.

 

[beermonster]

make sales depts lean - no sales=no work to be "lean" with

we are doing LEAN (starting anyway) here, but it's being dragged over 4 months as we are very "lean" on work.

sales sales sales.

 

[David Dodd]

beermonster,

I'm not sure that I understand the point of your post. If you're saying that lean activities somehow undermine sales, then I would disagree. If you're saying that lean practices don't directly produce higher sales, then I can agree with you.

Some people define "lean" so broadly that the term encompasses virtually every good business idea or practice. Some of these people seem to hold the belief that there is a "lean" solution to every business challenge. That's simply not true. The idea that lean or any other single management methodology is sufficient to insure success is completely unrealistic. The recipe for success is just more complicated than that.

But this does not diminish the importance of lean, especially in these very tough economic conditions. We all know that printing sales are declining, and printing companies of all sizes are responding to lower demand by laying off employees in significant numbers. See today's column by Dr. Joe at WhatTheyThink for more on these topics. Sadly, some companies have been forced to shut down their operations completely. The companies that survive this recession will need to be more productive than ever before, and improved productivity is one of lean's primary benefits.

Ironically, a crisis often provides the motivating force for a successful lean transformation. It happened that way at Toyota and many other companies as well. It's surprising how "easy" difficult change can become when your livelihood is at stake. Lean alone is not sufficient to guarantee your survival, but when used with other sound management practices, lean can substantially increase your odds of survival and position your company for an earlier and faster recovery.

 

[Mark Flanders]

Greetings,

Lean manufacturing is good stuff, but often badly applied. As Michael said, above, empowering employees is the weak spot. Here is my view on why that is:

Managers in the US tend to embrace the parts they understand the best...which is to say obsessive cleaning, increased monitoring and the jargon of lean. The ideas are fit into a northern European work ethic and a top-down, do-as-you're-told mentality. The idea of breaking down territories, open communication, engaged teams suggesting ideas for continuous improvement and the spirit of real teamwork is lost on them. What we're left with is clunky old fashioned time and motion studies laid on top of the same American corporate philosophy.

Also, lean's waste elimination can be counter-productive in hard times. I savaged a skid of paper last year that the lean guys were getting rid of. They tossed thousands of $ worth of paper because it wasn't lean. Now we could use that paper. Lean can also become a cult of true believers, and engender favoritism by selective training. I'm curious, David, about your thoughts.

There is an old saying for getting through hard times. Maybe Lean could find a way to incorporate it.

"Use it up. Wear it out. Make do. Do Without"

thanks,

mf.

 

[mattf]

Greetings,

Lean manufacturing is good stuff, but often badly applied. As Michael said, above, empowering employees is the weak spot. Here is my view on why that is:

Managers in the US tend to embrace the parts they understand the best...which is to say obsessive cleaning, increased monitoring and the jargon of lean. The ideas are fit into a northern European work ethic and a top-down, do-as-you're-told mentality. The idea of breaking down territories, open communication, engaged teams suggesting ideas for continuous improvement and the spirit of real teamwork is lost on them. What we're left with is clunky old fashioned time and motion studies laid on top of the same American corporate philosophy.

Also, lean's waste elimination can be counter-productive in hard times. I savaged a skid of paper last year that the lean guys were getting rid of. They tossed thousands of $ worth of paper because it wasn't lean. Now we could use that paper. Lean can also become a cult of true believers, and engender favoritism by selective training. I'm curious, David, about your thoughts.

There is an old saying for getting through hard times. Maybe Lean could find a way to incorporate it.

"Use it up. Wear it out. Make do. Do Without"

thanks,

mf.

Your comment on the lean guys that tossed paper is a double edged sword. Saving paper is at times good but that isn't the core practicality of the situation. Lean dictates what is waste shouldn't be there and should be either discarded or be used someplace with potential value. You shouldn't be asking "Why are we throwing away the paper?" but be asking "Why did we buy and save that paper?" Or better yet: "Why do we even have inventory?"

Classic example. The print company I work for has a skid at the top of its stock room of a full parent sheet of paper that isn't even manufactured anymore. The company keeps it. Why? Because it was donated to us from a customer. So a few questions come to mind:

Why should we keep something that has no value added? It has none because it isn't getting used. It has not moved in about 4 years. It is taken up inventory space and just collecting dust. No value added means waste in terms of lean.

But on the other hand, we haven't looked at the core reason. Why didn't it get used? Why wasn't there a timeframe to get rid of it if it wasn't going to be used? Or better yet WHY is there inventory anyway? Why can't we, an offset printer, develop a system with no inventory whatsoever? JIT is a great tool, why can't we use it?

Your example of the lean guys is in fact counterproductive and their method of waste is a bit construed. But not in terms of what you are implying. Their mentality of using an inventory can easily turn into save all the paper that is left over. If you are like most printers, you use different paper all the time. There isn't one specific set unless your into commodity. Creation of a JIT helps to lessen that inventory, so the "root" problem is solved: Reduction of paper stored in inventory.

A bigger question comes to mind, where was that paper originally from? What was the purpose of storing it? So many questions need to be addressed with this in order to understand the entire perspective of the situation.

I disagree with your comment about selective training. Lean isn't "do this concept and this concept and your done", lean is a mindset and a cultural change that anyone can be apart of if they open their mind to the culture of lean. The concepts of 5S, kanban, poke yoke and all the other tag lines are there to highlight the most common ways to help reduce waste. Toyota didn't have these taglines when they were developing TPS, they created a culture within the company that wished to continuously improve the bottom line. In solving the core problems, all the other issues that followed it ceased to be.

"Use it up. Wear it out. Make do. Do Without"

2nd part is good. Make do with what you have and insure you can do without certain things that you might be comfortable with. 1st part, eh not so much. Wear it out to me means break stuff, and lean has a clear line on that which is the "Total Productive Maintenance" concepts.

Or I could of just misinterpreted the whole saying. I need some more coffee......

 

[Mark Flanders]

Thanks for the reply!
I understand most of that, and I'm on board. My critique isn't so much about the merits of lean as it is about pitfalls in it's application. The culture of lean, as understood at Toyota, can be poorly applied so that managers just mimick the lean jargon. My plea, as a fellow on the receiving end of this, is to see the underlying philosophy of TPS instilled more deeply in management training. Otherwise the knuckleheads just use lean as another tool to control production workers and promote their own prospects. It's hard not to be cynical at times.
On the Just In Time stuff, yes, you are right. I understand. The paper in question was mistakenly ordered and no longer officially in inventory. However, we have an annual project for which we could have used it, had there been enough interdepartmental communication to make a minor adjustment, but rigidity prevailed. We recycled it and they ordered new paper for the project.

Marko de la Flandero

 

[David Dodd]

Lean manufacturing is good stuff, but often badly applied. As Michael said, above, empowering employees is the weak spot. Here is my view on why that is:

Managers in the US tend to embrace the parts they understand the best...which is to say obsessive cleaning, increased monitoring and the jargon of lean. The ideas are fit into a northern European work ethic and a top-down, do-as-you're-told mentality. The idea of breaking down territories, open communication, engaged teams suggesting ideas for continuous improvement and the spirit of real teamwork is lost on them. What we're left with is clunky old fashioned time and motion studies laid on top of the same American corporate philosophy.

Also, lean's waste elimination can be counter-productive in hard times. I savaged a skid of paper last year that the lean guys were getting rid of. They tossed thousands of $ worth of paper because it wasn't lean. Now we could use that paper. Lean can also become a cult of true believers, and engender favoritism by selective training. I'm curious, David, about your thoughts.

Mark,

I completely agree with your view that lean can be "badly applied." An old adage says, "What is more dangerous than an untrained soldier with an unloaded weapon? An untrained soldier with a loaded weapon." Lean tools and techniques, such as 5S, quick changeover, and JIT, can be extremely beneficial, but they all require a considerable amount of judgment to be used effectively. In fact, lean tools and techniques were never designed to be used in a dogmatic way. All (or most) of them began at Toyota as pragmatic solutions to specific problems. Unfortunately, it's easier to memorize and quote the rules than it is to understand the reasons for the rules.

It's also important to remember that lean needs a certain kind of organizational culture in order to succeed. Years ago, Taiichi Ohno at Toyota said that "respect for people" is a critical element of lean. We now know that "respect for people" really means having a culture in which everyone in the organization is encouraged and expected to be continuously involved in problem solving and process improvement. That's about as far away from a "command and control" culture as you can get.

I would disagree that waste elimination can be counterproductive in difficult business conditions. If anything, difficult times make waste elimination even more critical.

Unfortunately, lean does tend to create "true believers" who honestly think that there is a "lean" solution to every business problem. I don't know that this "engenders favoritism by selective training," but I do agree that the cult-like quality of lean can create problems. To me, the greatest problem is that the "true believers" can't or won't accept that lean methods aren't always sufficient to deal with every conceivable business issue, problem or challenge.

David Dodd
Point Balance, LLC

 

[grm0002]

Here are some basic pointers for keeping your information management strategy lean which I follow:
- Trim your information infrastructure of excess cost.
- Fit information initiatives to key business imperatives.
- Flex information architectures to changing circumstances.

Gentlerain Marketing

 

[PDeuth]

Printing industry managers want to buy a solution, rather than earn one. Lean was on the metaphorical shelf, so it's been picked up. It will be given a spotty trial application, without much thought for what Lean can do, or for what it is. When the results Toyota gets are not forthcoming with a quarter, Lean will be sent to the compactor, and seen as a failure. I would joke that Toyota has been practicing Lean for two generations and hasn't got it right, yet. We, on the other hand, did it in weeks! The germ of truth that makes that a chuckle is that we want the benefits without the effort, and expect that lip service will somehow do something, whatever that something might be.

I like Six Sigma as an improvement method over Lean for the printing industry. The six sigma method is a better cultural fit with the common and dominant command-and-control management structure. The theory of constraints is a good fit, for that reason, and provides some of the benefits of lean. In the end, what matters is that a wise choice of improvement methods, based upon the organic needs of the organization, must be made, and that once adopted, that method must be used with energy and discipline. In the end, it matters not so much where you start, but that you do, and that once started, you don't stop.

It matters what your particular niche is within the industry. If you are a general commercial printer, Kanban makes little sense, as nearly every job is one-off, on customer demand, and built to suit. If you manufacture a product, say, cosmetic labels, you will benefit from the supply chain management methods of Lean to a greater degree. Even so, printing is not a product assembly industry. Ink-on-paper is a single process, a flow that is applied to every job, or even product, that comes through the shop. The methods of Lean, or TOC, that apply to the value stream and to flow apply well here. It's important to make the distinction, however, that this is not an assembly system. What flows, from a strategic perspective, is important, too. In commercial printing the important flow is the information flow - keep the information flowing, and transforming, faultlessly, and you're doing well. In the printing of inserts, to pick another industry niche, the greatest strategic advantage comes from monitoring the flow of paper - keep the paper flowing non-stop and you're doing well.

First things first, as an industry, however. It's enough to admit that any real gains are always going to be made locally. There is no easy, single solution or method for anybody (no less everybody), other than some low-hanging fruit. Real and sustainable gains require real and disciplined effort. That will only happen locally. That will only happen internally. That will only happen with the full support and engagement of top management and through the efforts of a Quality Management professional who knows both Quality Management and printing. Such people are rare. If you have one, take care of them and feed them with opportunity and project support. If you don't have one, and want a good one, let me know. I'm open for employment. In particular I'm looking to work in a plant in a large multi-plant operation, where local efforts can be leveraged to better advantage. In a commercial printing shop, 10% increases in productivity in less than a year are realistic; a 1% increase in the profit margin applied to gross sales in two years is also realistic. We can, by improving our processes, print better work for less money, and do it faster. We can do that only by improving our processes, but it will take work and discipline. I'm available to help.