Inventory + Firefighting = You Decide

1/18/11…I am learning a lot about Lean Systems right now, sometimes feeling I am behind the curve. In fact, there was no such thing coined as Lean Systems until the mid to late nineties when a groundbreaking book or two came out and coined the term Lean. Before it was known as Lean, it was known as the Toyota way or the Toyota Production System. As in all things, when someone is doing something right, others want to know about it. Toyota up until last year was definitely doing something right.

I must admit the companies I worked for over the last eighteen years clearly did things right, but they also did things that decreased their bottom line and growth to their detriment. I have mixed feelings about this fact. The manufacturing world I grew up in loved inventory. Inventory covered up a myriad of issues, even so far as customers demanding certain inventory levels maintained at all times in contracts, “just in case”. The motto was produce it, eventually it will be sold, and if some of it is not, then just leave it on the books because we do not want to take a hit on the financials. A byproduct of this was space. Space was always an issue. There was never enough space.

Another fact about the manufacturing world I grew up in was everyone fought fires everyday in their job. It was a huge effort to try and get people to work on fixing the issues versus just solving it for the day. Most of the supervisors I came into contact with were great firefighters, but they were horrible at improving. Most of the managers I came into contact with were equally good at firefighting, and indeed at times made improvements to the system, but they struggled with sustainment and consistency in their focus on improvement. Most of the executives I came into contact with were either raised in the environment I was raised in, or tried to read a book or attend a seminar, but the “hope for instant pudding” as Deming described was not enough to enact real change without their direct involvement.

These are the key learning points and application I am taking from Lean:

• Takt your production needs to real customer demand
• Put in place a system to address abnormalities on a daily basis; i.e. fix the fires
• Stay in business by designing products that work and lead the innovation
• Conduct breakthrough events to improve the systems everyone works in, office and shopfloor
• Consider the whole process, from supplier to customer, not just the manufacturing

For me, this is how I am beginning to relate to Lean. Every tool or term used can probably be placed as a bullet point under one of the above headings. There can be more written on this subject but for now I think this captures a thought or two that I needed to capture.