The Afterguard

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"Lean" is not a survival strategy

Let's talk about "lean" manufacturing, or rather the re-branding of "new" technology which was itself a re-branding of "good" management. It should be compared to the highly profitable diet industry. There is the South Beach diet, the Atkins diet, Weight Watchers, and on. But the fundamental fact of losing weight is "don't eat more calories than you expend." But these fads sell books and programs making a few folks rich.

Those involved in "new" technology should see through "lean" as a jargon-laced fashion in management consulting. How many other fads were there? John Micklethwait and Adrian Wooldridge in their 1996 book The Witch Doctors debunked and exposed earlier management fads like "lean." (Is it time for another debunking and exposé?)

"Lean" shipbuilding (or any other manufacturing) is not a new silver bullet for improved profitability. It is an old silver bullet called market driven competition. How do you successfully survive in competitive markets? You compete by giving your customer the best perceived value for his dollar. How do you do that? You manage your business well.

Look at the Koreans again. They are responding to their customer's demands by building ships using an inefficient process. But they needed the capacity. This is hardly "lean" as described by the gurus of lean.

Now I'm not saying that shipbuilding management is gullible or stupid. On the contrary, I think that, in general they are pretty smart and incredibly clever. I believe in the evolutionary nature of business: competition results in species suited for survival in a particular environment.

Look at NG and GD: they are well adapted to the protected market created and maintained by their customers. The Navy, Congress, NG and GD stockholders, and other political entities have a strong desire to build ships in the US. This does not create a competitive market, rather a controlled economy. The resulting products have a perceived value to all of the stakeholders. The products are not just the ships delivered, but the jobs, votes, and profits.

Now if I were the customer and truly believed in free market concepts, I'd be looking to an open market. I'd be thinking about buying ships from anybody that could build them, not just from domestic sources. If this were the case, then I'd have changed the environment and shipbuilding management would either adapt to survive or become extinct.

But then, sometimes, like when food is scarce, being lean is not a survival strategy.

Posted at 12:48:31 on 01/25/05 by Tom Swift

Comments

anton wrote:

Correct as usual my lad. How about a more basic fad like listening to the skeptics and cynics within an organization? Now there's a fresh thought! There is real value in this resource that is often overlooked, ostracized and devalued. Jerome Alexander points this out in his book "160 Degrees of Deviation: The Case for the Corporate Cynic". This should be required reading.
posted at 09:55:29 on 12/10/06

Tom wrote:

Anton, your comment is much appreciated. I have found that some of the best ideas come from those that are not happy with the status quo, see other possibilities, or missed opportunities. A lot of this goes to corporate cultures that either benefit or hinder a business' performance. I recently had the opportunity to work with a small foreign shipyard filled with enthusiastic, creative, and energetic people. When the subject of "lean practices" came up, I pointed to all the work that had been done over the last 30 years under the National Shipbuilding Research Program (NSRP) in the US. Much of this work is consistent with the tenants of "lean", but has, in many cases, gone un-used or ignored, then re-labeled as "lean" and recreated.
posted at 07:25:09 on 12/11/06

Jerome Alexander wrote:

I couldn't agree more with these comments and in started a website to help bring some sanity and humor back into the corproate world. Check http://Http://thecorporatec...
I'll think you'll get a kick out of it.
posted at 19:40:27 on 03/27/07

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