Comparing the Major Manufacturing Improvement Methods — Part 1

EDITOR'S NOTE: The past decade has seen the development of a number of manufacturing management concepts. Chief among them are: lean manufacturing, six sigma, supply chain management, total productive maintenance (TPM), and reliability centered maintenance (RCM). While these names are well known, they are not well understood.

09/01/2001


In recent years, lean manufacturing has come to the forefront as a model for manufacturing excellence. Unfortunately, the model was not, at least until recently, documented as to the details of the methodology.

The book, The Machine that Changed the World , by James Womac et al, was an interesting discussion of the history of what came to be known as lean manufacturing, but it was scant on the details of the methods for achieving it. More recently, in Running Today's Factory , Charles Standard and Dale Davis have provided a clear methodology that integrates lean manufacturing concepts and factory physics in a very practical way. Their points of emphasis are: reducing process variability; reducing system cycle times; and above all, eliminating waste in the manufacturing process and supply chain, from receipt of order to delivery of product and payment.

Unfortunately, the behavior of many managers, and the performance of many manufacturing plants, suggest that Standard and Davis' book has not been widely read or practiced. The same could also be said for many other good books on manufacturing, management, and leadership. These books include works by Deming, Nakajima, Pande, Belasco, Senge, Wheatley, Hamel, Stewart, Moore, and others. And they cover a range of topics and methods, including six sigma, supply chain management, reliability centered maintenance, total productive maintenance, leadership, systems thinking, intellectual capital, complex adaptive systems, reliability, and so on.

Head count confusion

One of the major issues that needs to be addressed is the understanding (or lack thereof) that lean manufacturing is not about head count reduction. Lower head count per unit of output is a consequence of applying lean principles. Yet it seems that many managers — even at very high levels — still believe that reducing head count will result in a lean company. But there is a huge body of evidence that indicates the contrary is true.

A full understanding of lean principles is essential. An analogy that may help is to recognize that "lean" and "fit" are two very different concepts. Olympic athletes are "fit," which typically gives them a "lean" appearance. Anorexic people are "lean," but hardly "fit." And we certainly don't want an anorexic company. So, lean manufacturing is about the concept of being lean through being fit, not the other way around.

Finally, recall W. Edward Deming's famous observation: "Your system is perfectly designed to give you the results that you get." A corollary to Deming's statement would be: If you reduce the resources available to your system without changing its basic design, then system performance will decline.

The data from studies of companies that have engaged in head count reduction support this corollary. For example, in a front-page article of The Wall Street Journal (7/5/95), it was reported that for several hundred companies that engaged in cost cutting through layoffs or downsizing over a period of about five years: