Does Lean Help the Smaller Companies?

I came across this article over on the Bloomberg.com site that details the struggles of Saab (the Swedish carmaker) during the past year to remain in business after its sale to Spyker Cars from General Motors. The situation is quite grim with suppliers halting shipments because of unpaid debts.

A quote from Garel Rhys, president of the automotive industry research center at Cardiff University in Wales, stood out. He states that: "There was a period about 25, 30 years ago when people mistakenly thought that things like lean production would allow the smaller carmakers to survive easily against the bigger companies. Nothing of the sort has happened."

What do you think of this statement? Is this the promise of Lean production? Can successful Lean initiatives alone guarantee survival? I look forward to your comments.

Is IT Overfed Yet Undernourished?

Steve Bell and Mike Orzen -- whose book, Lean IT: Enabling and Sustaining Your Lean Transformation, just won a 2011 Shingo Prize for Operational Excellence, Research and Professional Publication Award -- recently authored a short article for the online magazine IT Today.

Because 80% of most firms' IT (information technology) budgets are spent on "maintaining," while only 20% goes to "improving," Steve and Mike contend that this situation, like the disturbing trend in the eating habits of the US population, has created "overfed yet undernourished" IT operations and infrastructure. These costly efforts are not focused on creating value.

The authors feel that many organizations forget that "Lean is not free, it requires investment" and must remember to "create sufficient slack time in the schedule to allow workers to perform continuous improvement activities."

Are any readers of this blog involved in a Lean initiative focused on the IT function? Do you agree with Steve and Mike's assessment?

Lean Office? Really?

Last week at the Annual Shingo Prize Conference, I had a chance to talk with Drew Locher, who just recently published a book titled Lean Office and Service Simplified: The Definitive How-To Guide and has previously won a Shingo award for a book he co-authored titled The Complete Lean Enterprise: Value Stream Mapping for Administrative and Office Processes. During our conversation, I asked Drew: "Can lean really be applied in an office and service environment where so much variation exists?" Here is Drew's complete response: Much of the variation found in an office and service environment is "self created." Lean concepts such as standard work, batch reduction, and leveling are just a few that directly address much of the variation that is encountered. For example, the lack of standard work usually means that people perform similar activities in different ways. This creates variation. An individual "batching" a particular activity creates variation in the amount of work that moves from person to person or department to department. For example, if a person performs an activity once a week, then a week’s worth of work will arrive at the next step all at once. Further, if the person performs this weekly activity at different times it creates still more variation for the recipient. From the recipient’s viewpoint, the demand for this work will appear to be very unpredictable. It is due to the manner in which it is processed by the previous person, however, and this can be changed and improved. Now, not all variation can be eliminated. We can, however, often accommodate still more of the variation that remains. Believe it or not, unplanned work can be planned for. We can put aside time for "drop-in" work so that it can be processed in a way that minimizes disruption. Experience has shown that up to 90% of the variation that people struggle with can be addressed by the application of lean concepts. The result is a much more predictable work environment that is more productive and less stressful. Has any reader of this blog tried apply Lean to an office, service, or transactional environment? Do you agree with Drew's comments?