The Genius of Superfactory Readers

There is an incredible reservoir of intellect, experience and passion for lean manufacturing among the Superfactory readers, and the best thing about being the 'Blogger In Chief' is the access I get to that amazing resource.  By now, I hope that everyone has read Art Smalley's article, Lean and the Law of Unintended Consequences.  It is an enormous contribution to the Lean Manufacturing body of knowledge.  My compensation for blogging is that I was asked to edit it and, as a result, got to see it a few weeks before it was published.  (My contribution was the tweaking of a couple of dangling participles - I deserve no credit for content.)

This morning, thanks to the marvel of modern information technology, I received instant notification that Kathleen Fasanella commented on Art's piece.  Before the rest of you, I had the morning to contemplate this brilliant piece of writing.  I'll save you the trouble of a click - here it is:

"I'm actually heartened by Grinch Smalley. When my husband and I started exploring lean, we had vigorous discussions about what Lean "looked like" in different industries. It seems that Lean is mostly applied in industries with a high engineering component; the inputs and control processes of their products being highly quantifiable. However, in apparel, inputs are not so highly quantifiable and are much more variable. Similarly, I've argued that other industries such as agriculture and building are likewise dissimilar to what we commonly think of as a lean industry. Lumber -just like fabric- cannot be smelted to specific parameters to enhance waste reduction. Regarding pull, it will remain unlikely that a serving of corn can be produced at will upon demand. The idea that you can't hire 9 women for one month and get a baby applies to our industries both literally and figuratively. You can't pull corn like cars or computers and the inherent differences between quantifiable manufacturing and the comparative of industries closer to the dirt will compel variant differences in lean manufacturing.

Industries relying on natural limitations cannot implement lean as currently dictated. There are some advantages and disadvantages to this. For example, the building trades will (largely) remain impervious to import pressures; it remains an impossibility to construct a home in China and import the thing here. In apparel, our advantage is cycle time; we are not constrained by long product development cycles. With an interchangeable block system, we can go from concept to approved prototype in two days. Production can process the lot in another two days. Which brings me to another concept; in many respects, batching will remain unavoidable in "dirt" industries.

What I mean to say is that Smalley's ideas excite me. Lean doesn't look the same in every industry. While you can't pull corn or coats like cars, that doesn't mean the same concepts can't be brought to bear. Smalley's article provides parameters for discovery and exploration."

The fact that lean manufacturing has been misrepresented as a set of techniques, rather than a fundamentally different concept of business, has been a strongly held belief of mine for many years.  Kathleen's phrase, "...cannot implement lean as currently dictated", is accurate.  The solution, of course, is to overthrow the dictators.  They have it wrong.  Her success in the application of lean in her particular business has undoubtedly resulted from the Art Smalley approach - using Toyota tools where they apply and developing new ones where they don't, in pursuit of financial success, as the lean companies define it.

She also opens up a whole 55 gallon drum of worms with her statement, "batching will be unavoidable in 'dirt' industries".  She cites the extreme cases, and I imagine a psychiatrist would have a field day with her classification of pregnancy as a 'dirt industry', but making either babies or ears of corn requires an unavoidable incubation lead time.  Her point is that certain products must be done to forecast, and Mother Nature has established a rock solid floor to just how far the cycle time can be reduced.

The food industry, in general, faces this reality.  When the Chiquita folks bring a boatload of bananas up from South America, they know full well the inventory management maxim in their business - they must either 'sell 'em or smell 'em'.  Parking the load in a warehouse until the banana buying public is willing to pay the price Chiquita would like to get is not an option.  If the public will not pay the optimum price, then the price must be reduced to whatever it takes to move the bananas.  Food companies have very short cycle times and very low inventories - in fact they are typically lean by just about every relevant measure - because the alternative is bankruptcy.

(This, of course, is where the fallacy of Kathleen's inclusion of pregnancy is evident.  Having participated in manufacturing a batch myself, I know that, quite opposite from bananas, children must be warehoused for as much as eighteen years, by law, with staggering inventory carrying costs and waste beyond measure.  Assuring the quality of the finished product in nearly impossible.)

The inherent leanness of fresh food businesses, whether they set out to be lean or not, in the face of the most anti-lean conditions of unavoidable production to forecast and batch production should give the lean community good reason to pause.  In fact, Kathleen cited the extreme, but almost all manufacturing must produce to forecast - even Toyota.  Every product that is ultimately used by a human has a built in customer lead time of zero.  There is no telling what someone is going to walk into Walmart, the Toyota dealer, or the grocery store and buy today. 

Traditional manufacturing has been built around the assumption that the gap between manufacturing cycle time and the true customer lead time must be covered with inventory.  The longer the lead time, the more inventory must be in place.  Whether the inventory is in the manufacturer's warehouse or the Walmart distribution center matters little.  It must be in the supply chain somewhere.  The food companies overcome this 'indisputable fact of business' through pricing.  Guess what?  So did Henry Ford; and so does Toyota.  (This is the kind of stuff Toyota learned from Ford - not assembly lines.)

Henry Ford did not continually drop prices out of altruism, and Toyota does not keep their pricing fluid to 'buy market share'.  They continually manipulate pricing to keep a constant flow through the factories - just like Chiquita does.  And Ford and Toyota know that what is given away in pricing will be more than made up in cost reduction in the plants through a level flow and stable employment.

It is no mere coincidence that Taichi Ohno said that kanban was inspired by the long practiced methods of moving milk (the product of a 'dirt industry') through the supply chain; nor is it a coincidence that milk prices in grocery stores occasionally drop for no apparent reason and stay down for a day or two, then go back to previous levels.  Long naturally dictated bovine lead times must be reconciled with customer lead times of zero - and inventory is not one of the milk industry options.

This is the mess of worms Kathleen has opened up.  Lean is a business model that tightly integrates marketing and financial analysis and decision making with production.  Lean manufacturing, as both Kathleen and Art have pointed out, is a business model that does not and should not look the same in every factory in every industry.

The best part of Kathleen's comment was her conclusion:

What I mean to say is that Smalley's ideas excite me. Lean doesn't look the same in every industry. While you can't pull corn or coats like cars, that doesn't mean the same concepts can't be brought to bear. Smalley's article provides parameters for discovery and exploration.

The discovery and exploration is going to be fun.

Comments

[HonestlySpeaking]

Bill,
It is great to talk about lean in all circles of manufacturing, and reference it, like you have the Chiquita Banana company. But just because you have written a book about the apparel industry does not mean you were successful while working while toiling away. Blogs today are used to self promote, and people unfortunately, believe what they read. I think that many bloggers today, have substituted hard work at a 9-5 job , and replaced it with a few hours of sitting at their keyboards. A new breed of intelligent "white collar" slacking.

Of course,
HonestlySpeaking

[Bill Waddell]

No questioning your honesty, but your facts are a mess.

I did not write a book about apparel manufacturing. I wrote a book about lean manufacturing management that took fifteen years of research - you ought to read it. I think its pretty good, and I can use the money to support my slacker lifestyle. I know nothing about apparel. I am lucky to get myself dressed in the morning and wear only GrrrAnimals to compensate for my total color bilndness.

I also edited a book on lean industrial engineering - not a reference to apparel in it either.

You're right about me being a slacker, but I have only been slacking as an author and consultant for about a year and a half.

I slacked off as an industrial engineer for for a couple of years, then slacked off as a cost accounting manager then as a production manager for almost eight years. I goofed off and did as little as possible on the corporate manufacturing staff of one of America's leading manufacturing companies when I was supposed to be leading lean efforts for a few years, then slept on the job as Director of Materials and Quality for a big international manufacturer, and took a four year long siesta while I should have been running supply chains between Mexico, China and the U.S. Most recently, I avoided all the work I could, snoozing my way right through leading a defense plant to the DOD Best Manufacturing Practices award.

Twenty years of manufacturing and materials management, all of those lean transformations, so many MRP systems, so much travel throughout the U.S., Mexico, Europe and Asia, and all of those people looking to me for direction wore me out. So I decided to become a white collar slacker and do nothing at all.

I assume you have no logical or fact based criticism of the blog? Just unfounded personal criticism written in atrocious grammar? Really, buy my book and read it while I take a nap.

[Karen Wilhelm]

The dairy industry has some flexibility, but also some big constraints. My uncle is a dairy farmer - maybe 20 years ago he built a $200,000 "milking parlor" with automatic feeding delivered to each cow with its own mix of ingredients. The cows sported ear tags that were recognized when their heads went through a set of stanchions when they stood ready for milking. Of course, everyone knows about milking machines. They maintained a two-day inventory before the truck came to take the milk to whatever milk producer was buying. This being the middle-of-nowhere Nebraska, there weren't too many buyers.

with that huge investment for a family farm, he now had no flexibility. Could he convert the building for milking goats as goats milk reached new popularity? I don't think so.

He could have converted his acreage from corn and hay for silage to something else -- Grandpaw grew potatoes -- but having his automated milking barn stand idle would have been hard to take.

The flexibility to respond to demand meant that the milk could go for butter or cheese, but we know about the Dept. of Ag. and its huge cheese inventory! But maybe my uncle or the dairy could have gone into fresh mozzarella instead of cheddar.

So agriculture could have some short- and long-term flexibility.