Begging for Lean Thinking

by BILL WADDELL

I don't plan this stuff - it just happens, but this seems to be airline lean week.   Any doubt about how badly the airlines need lean thinking has to be cleared up by this article from the Wall Street Journal about the airlines.

"Airlines began aggressively padding schedules in 2008 and 2009 so that even late flights technically arrive on time."  Scheduling a flight to take 2 hours and 15 minutes even though you know it will only take two hours sounds a whole lot like building two weeks of lead time into a manufacturing production schedule to increase the likelihood of shipping on time even though it really only takes a day to make something.

Time and inventory are just two sides of the same coin - pouring more inventory into the factory to compensate for problems just adds to the overhead expense, degrades quality and makes the underlying problems nigh unto impossible to solve.  Seems as if extending flight times is exactly the same thing - with exactly the same results: 

 "You can do all sorts of things to make up for poor performance," said Robert Isom, chief operating officer at US Airways, referring to padded schedules. "But you sacrifice efficiency, the passenger experience, the employee experience and profits."

Lean folks know well the water and rocks analogy in manufacturing:

Inventory is the water in the stream, while the rocks are all of the problems creating excess costs, poor quality and missed deliveries.  Old school thinking was to make sure there was always enough water to keep things flowing without having the rocks disrupt flow.  MRP, in fact, was created specifically to be a tool to make sure there was always enough water to make problems appear to be invisible.

Lean theory is that kanban should effectively continuously drop the water level until another rock is exposed, making is easier to identify and solve the problem, then drop the water level again until another rock is exposed.  This is the essence - the meat - of continuous improvement.  Don't lengthen lead times - keep shortening them.

Seems as though the airlines have their own water and rocks:

Instead of artificially lengthening flight times - increasing the amount of flights in process - to make the impact of all of the reasons flights are late invisible, the airlines should have been pursuing the lean continuous improvement approach.  Shorten the scheduled time until something bites their on time performance - then kaizen that problem - fix the process - make that rock go away for good - then shorten flight times again until they get bit by the next biggest driver of missed on time flights.

In fact, burying problems with inventory happens everywhere ...

... patients are scheduled in such a manner as to make sure there are always far more patients in the clinic than doctors to treat them - drive up the medical work in process levels to compensate for all of the reasons things don't happen on time.

... schedule kids to be in school for seven hours in order to give them four hours of instruction to compensate for all of the wasted time in the education process.

The result is always the same - excess cost that does not create a lick of value for customers - delays and inability to deliver - lousy quality.

And the solution is always the same - shorten times - solve the problem - reduce the cost - improve the quality.

Original: http://idatix.com/manufacturing-leadership/begging-for-lean-thinking/

Comments

[Brian]

Excellent. This really summarizes the essence - highlights the daily struggle of thinking and acting lean in tough cultures that thrive on the high water.

Thanks

[David Hallsted]

I am still laughing about the "MRP = water covering rocks" statment. I will start to use the comparison here at work. Thanks for humor and your insight.

[Keerthi]

Great example of benchmarking across industries.

[mark greenhouse]

Great post Bill and very simply put across. I can't add in the examples I'm working on from the legal world just yet.

I do have one from the marketing world where it took an average of 12 days for the call centre to get back to new customer enquiries. To compensate the marketing team needed more and more responses to adverts and mailings to keep the "lead bank" full. The marketing costs were rising as the response rate was starting to decline.

In reality 90% of these enquiries could be dealt with in under 10 mins and at half the cost.

I always take the inventory costs to the next stage now as well; higher WIP = increased cost to run the business. Reducing finance requirements is large business pressure over here in UK/Europe.

[Steve Brenneman]

Best explanation of lean i have ever seen. Period!

[Bill Waddell]

Thank you Steve - coming from you that is very high praise indeed.

[Daniel Markovitz]

Bill -- I've long maintained that you can take the same approach to individual work. When people stay at the office till 6, 7, 8, 9pm, they're essentially increasing the inventory (or resource) of time available to do their work. As a result, they're not pushed to identify and solve the underlying problems in their own (and their department's) work flow. If people committed to leaving earlier -- or better yet, if the company turned out the lights 15 minutes earlier each week, it would enforce the need for kaizen of their processes.

[S.M.Junaid]

Water level analogy is good and easy understand able the disadvantages of inventory, but the question is what can we do when less resources are available with high production volumes.