Whirlpool, Sealy, and the Nike Factor

Two stories caught my eye last week which helped demonstrate the dichotomy in lean thinking today.  The first was Whirlpool's announcement that they will lay off between 300 and 500 workers at the Evansville, Indiana plant.  This is due to "continuing efforts to adjust production to market demands."  But the line that really explains what is probably going on: "the company will continue to have committees explore lean manufacturing or efficiency practices."  Think about that while I tell you the next story.

A day earlier Sealy, the world's largest manufacturer of bedding products, announced they would build a new 210,000 square foot facility near Wilkes-Barre, Pennsylvania, creating over 100 new jobs.  This is Pennsylvania, not North Dakota let alone Asia, so not exactly a cheap place to set up shop... at least according to NAM's criteria.  But again there's one line that tells the real story: "Sealy will employ lean manufacturing techniques in the design and operation of the plant."

So there you have it.  But perhaps I should recap because so many apparently miss it:

• "The company will have committees to explore lean manufacturing."
• "Sealy will employ lean manufacturing techniques in the design and operation of the plant."

Some companies think of lean as some foreign concept that has to be studied and analyzed by committees with plans and buy-in from all groups to achieve synergy and consensus and other meaningless buzz words.

Some companies just do it.

Guess who survives.

Comments

[Josef Horber]

I was once part of a team, that proposed to take over the logistics operations of an engine-building plant.

When management analyzed the proposal, they did not care about the real lean gains (leadtimes, flexibility, quality, WIP, less administration required), but only about how much direct labour headcount could be reduced. So, we offered to reduce hedcount, but the people could have been re-employed in the production plant, so no lay-offs would have been necessary.

Then, they started discussing, whether the savings would be above or below the hurdle rate of our business unit, which was completely pointless, since both our (the logistics) and their (the production) business units were 100% part of the same corporation, so the discussion was about money from left pocket into right pocket.

Now, after more then 1 year, management is still arguing and nothing was done on the project... I can´t understand why we could not "just do it".

Regards,

Josef

[Mark Graban]

Even worse, the quote in the first case was to "continue" committees. Having committees decide where to do layoffs isn't the least bit lean. Using lean to drive layoffs won't work in the long run. You're right about committees, but it smells like a case where "lean" (whatever they were doing in the name of "lean") was already happening and it was costing people dearly.

[Bill Waddell]

You can learn all you need to about Whirlpool if you go cruising the sites that celebrate the beauty, wisdom and power of Six Sigma. They have six sigmaed their way to plant closings all over the country, leaving themselves as the final assemblers of Asian components in a big plant in Ohio - which they proudly describe as the epitome of lean. In fact, they are the epitome of professional managers who worship at the altar of numbers ... and are slowly destroying another once great American company. They already consumed Maytag, and now they are eating themselves.

[Mark Graban]

I just remembered I toured a Whirlpool factory in Michigan in early 2001. They bragged about their lean efforts and how low inventory was. I asked "what is down there through that huge forklift door, all that inventory?"

The response was "oh that isn't ours, it belongs to corporate."

That was my last visit there. What a mess.

[Dr. Electron]

"Some companies think of lean as some foreign concept that has to be studied and analyzed by committees with plans and buy-in from all groups to achieve synergy and consensus and other meaningless buzz words."

Well said. That is my biggest problem with lean...is that it seems that so many companies are getting into it just so they could say 'they are working toward lean'...without really applying a true effort to understanding and implementing it.