Thursday, January 3, 2013

Lean is a Growth Strategy - Part 1

By Pascal Dennis

But Lean is about growth.

Too often we sub-optimize by focusing Lean (aka Toyota Business System) entirely on productivity & efficiency.

And you can't grow unless the entire value stream is engaged.

The system comprises three 'loops', in fact: Design, Make, Sell.

As it happens, one of my favorite Toyota senseis, Shin-san, was a sales & marketing executive!

Most Lean transformations focus on the Make loop, for good reasons.


Waste is most visible in Operations. But if we stop there, we'll miss the Mother Lode -- Growth.

For example, what if we fail to extend our Lean activities upstream into Sales?

A chaotic, lumpy sales profiles will force even the most splendid Lean factory out of its 'sweet spot.'

We'll have to buffer with inventory, lead time or capacity.

Engaging Sales entails uncovering invisible governance obstacles.

Incentive structures are perhaps the most common.

Why do I produce a lumpy, chaotic sales profile? Because I get a big bonus thereby!

We also have to engage other non-Operations groups -- Marketing, Design, Engineering, Planning & Scheduling...

That's what The Remedy - Bringing Lean Out of the Factory is all about.

A big challenge, but that's why we have managers.

(As Shin-san use to say, "No problem, no need for managers!")

Tip of the hat to Orrie, Art Byrne and the Wiremold leadership team, who saw all this a few decades ago!

So what's this mean for Lean practitioners?

More next time.

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