Essence of Lean Manufacturing – It's not Numbers!

    If you happen to read one of the numerous books about lean manufacturing, e.g. "Lean for Dummies," (which is not that bad), you're apt to come away with a sense that "lean" is all about numbers: value-added time vs. non-value-added time, scrap rates, square feet allocated to production, volume of inventory and so on. In many ways, it seems to eerily resemble Frederick Taylor's theories of scientific management, which date back to 1911. In the end, it's all about the numbers, right?

Wrong - at least according to Elaine Thorndike, CEO of the Colorado Association for Manufacturing and Technology. In her job, which is providing guidance and consulting to small manufacturing companies as part of the Manufacturing Extension Partnership program, she has helped hundreds of companies "lean out" their organizations. I chatted with her recently about what lean really means, and what role it plays in being competitive.

In her view, the key to lean is the people who work on the factory floor. "The idea for the SUV came from the factory floor," she asserts. She's adamant that when employees understand what constitutes value for the customer, they will deliver it. She describes "guys with long hair and tattoos" making passionate presentations to upper management, and finding an attentive audience.

When I specifically asked her if worker involvement should extend to incentive pay, she said, "It's nice, but not necessary." Being recognized for making an important contribution to the company is a stronger motivator.

Beyond taking a philosophical approach that is definitely closer to Theory Y than Theory X, I asked her what small companies under competitive pressure had to do in a practical sense. One strategy she put forth was diversification, which, in her view, comes about by focusing on capabilities, not products. If a company can achieve the precision required by the aerospace industry, it can probably do well manufacturing medical gear. In Colorado, where there is a strong focus on renewable energy, semiconductor companies have discovered that what they do isn't that far removed from manufacturing photovoltaic cells.

I also asked about what it takes for companies to reach out to new, non-domestic markets. Her response could be boiled down to Nike's slogan, "Just do it." But she pointed out that there are plenty of federal and state government programs and offices set up to help companies sell overseas. It's just a question of tracking them down.

Don't get me wrong. Elaine Thorndike is no ivory tower theorist. She believes in\efficiency, elimination of waste, and productivity, and she's proud of the many companies who have achieved gains in these area through the help of the Colorado Association for Manufacturing and Technology. But she believes - and I agree - that the workforce, not the spreadsheet, is the key asset in gaining competitive advantage.