Tuesday, January 27, 2015

Lean Inside a Parts Warehouse: Different Paths to Success Or Failure
by David P. Carlisle

For decades now, I have been fascinated with the Field of Dreams “build it and they will come” metaphor. I first heard it, obviously, in the movie where it sorta made sense in the context of fantasy. Next, Carl Sloane mentioned it as a reinvigoration strategy to motivate his partners in Temple, Barker, & Sloane (now Oliver Wyman) to grow the business. He majestically said, “Build it …. and they will come.” Carl was a god-like figure and that was all the Kool-Aid I needed to do his bidding.


To me, “build it and they will come” always recalls the phrase’s roots in a fantasy movie about a baseball game. This makes it a perfect metaphor when discussing business strategies. Some strategies are based in fantasy. Others are not.


That brings us to “lean”. Lean warehousing started at Toyota, and had no ties to fantasy. It combined Toyota’s approach to manufacturing with shop floor realities – largely interpreted by Tony Gomes (who now manages Honda’s NA warehouse operations).
Tony is the real thing – he talks with passion about the three lean building-blocks: process, tools & technology, and culture. Tony stresses culture.


I have argued with Tony for more than a decade, pretty much all in my head. Tony stresses each and every bullet in the culture box. With passion. I am not a purist and tend to stress the subset of bullets that work within each culture.


OK, back to the metaphor, “build it and they will come.” It is all about “it” – just what is “it”? I think Tony and I would agree on this: “it” is a combination of methods and tools that constantly evolves as a consequence of an organization’s culture.” “It”, too, reflects the organization’s culture, and “it”, too, evolves. “It” would be markedly different from culture to culture, reflecting different goals, values, constraints, and attitudes. I suspect that Honda warehouses, under Tony, look very different from the Toyota warehouses where Tony grew up.


Case in point, GM’s lean journey focused on productivity and quality, where they trudged a two-decade path from worst to best. You can see a plot of their progress in "The Story of GM’s 19-Year Ascent to Best-in-Class Warehouse Productivity.”


Looking inside a lean GM parts warehouse is very different from the inside of a Toyota, … or Volkswagen warehouse. VW made the climb up with a much faster pace than GM – the story is told in “Digging Deeper Into Lean at Volkswagen Group of America.”


Toyota, GM, VW, and, I suspect, Honda are all slaves to CI – continuous improvement. The only thing they might have in common is a touchstone lean graphic talking about methods, tools & technology, and culture.


Another approach to that lean field of dreams is to sloganize it. This left-most path in the above graphic is a corruption that can get all of our heads nodding and saying, “yeah, yeah, yeah.”


First, set your sightline on “lean” and announce that it is your strategy – “announce it and they will build it.” It is easy to imagine this as a top-down strategy of the George Patton variety. The marketing folks participate in a staff meeting, hear the new direction, and do what they do best: merchandise it.


Billboards everywhere. Electronic displays on the shop floor. Banners. Pages and pages on their web site. Slogans on business cards. And, pamphlets to be distributed to customers. These efforts usually stop short of specially printed books of matches.


This sort of lean strategy makes me feel uncomfortable. It reminds me of visiting a house where most of the art on the wall is of big-eyed children. What can you say?


Really, nothing. It is simply too embarrassing. And, that’s why it typically does not work. It is hard to criticize a soup label if you can’t taste the soup, or if the can is empty.


Bottom Line: If you’ve been staring at big-eyed children for a while, you might not be able to see very clearly, or assess where you are in the journey to lean. Here’s what you need to do:
  1. Look at your productivity and quality metrics versus a relevant benchmark group and assess if you are in the top (best) quintile or not. If you are in one of the bottom three quintiles, you probably are not a lean shop.
  2. If your people tell you that the benchmark metrics are irrelevant, then you probably are not a lean shop.
  3. If you suspect that you are in one of those bottom three quintiles and you see a lot of “big-eyed children” posters, slogans, and web-razzle-dazzle, then you probably are not a lean shop.
At this point, you have discovered that you are either on the journey to lean, or not. If you are not, get rid of the big-eyed children poster and merchandising. Then, get your head around the idea that lean is all about the nature and boundaries of your company culture, using appropriate methods and tools. “It” will not look exactly like anybody else’s lean derivation. In time, “it” will evolve to be your own statement of culture.


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