Lean and the Duct Tape Conundrum: Forming an Organization that Sticks

Lean and the Duct Tape Conundrum: Forming an Organization that Sticks

Operations | Posted by YouInc.com - April 11, 2013 at 8:24 pm
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Red Green wouldn't be thrilled. The duct tape I had just picked up was fraying as I peeled it off the roll, separating from one sturdy strip into several skinny strips with threads hanging off the edges, making it far less effective. The 'handyman's secret weapon' no longer.

Duct tape is just one of the many products out there that has been de-valued through the "Wal-Mart effect" of constant cost pressures on suppliers. Bill Marquard does a very good job documenting the price reduction of duct tape in his book, Wal-Smart (McGraw-Hill, 2007), from prices above $5 per roll to where it currently sits between $2 and $3. Some of those reductions were a result of productivity increases on the production line – shorter cycle times, less waste, etc. - but some is also the result of removing material cost – cheaper adhesive, less or thinner structural fabric. As a result, this less expensive product is also less effective.

Duct tape isn't alone. Krazy Glue seems less crazy – the last several repairs I have tried didn't stick as advertised. Internet forums suggest there is a lower concentration of cyanoacrylate (the functional ingredient in super glue) now compared to historical levels. Light bulbs don't last as long, or have different colour temperatures (the 'colour' or whiteness of the light) in the same box. Whether it is the Wal-Mart effect or the effect of years of offshoring these products, I think as consumers we are losing in this continual battle to reduce cost. Some refer to this as leaning out the supply chain, but this isn't a Lean approach to manufacturing - it is just cheap.

People mistake Lean for cost reduction all the time. Tell your people you are launching a lean initiative next week, and people will start dusting off their resume, fearing layoffs and the whole 'do more with less' approach. Lean will involve some cost reductions, but they are what I call 'good cost reductions' (like the difference between good and bad cholesterol). Good cost reductions are those that reduce complexity or waste within your system; bad cost reductions affect performance, morale or services that your customers have come to rely on. Good cost reductions eliminate customer anxiety and bad decision risk from having too many products to choose from, or reducing complexity in a process so an employee can carry it out with less risk of mistakes. Bad cost reductions are arbitrary and destroy employee enthusiasm and the culture around the shop you worked so hard to create.

Lean is a necessary skill in any company, and when understood and applied properly, it can be very powerful. I call lean the 'enabler', giving a firm the resources it needs to pursue an innovative strategy or execute a key project. When we apply lean, we focus on value – what does the customer really want? We eliminate complexity, waste and redundancy, shutting down processes, products or services that no longer add value or confuse customers.

Two years ago Maple Leaf announced it would be eliminating a number of their recipes for wieners from their portfolio – they had 78 at the time! What is more, they had 50 different sizes of hot dogs. 5-0! How many different sizes of hot dogs do you really need? The worst part was their production line was often shut down for over an hour while they switched between recipes. There is the waste. Kudos to Maple Leaf leadership for doing something about it. General Motors was forced to go through some similar efforts 5 years ago as part of their funding package from the U.S. government. They had 11 different car and truck brands at the time, with distinct tooling, engineering, sales, distribution, etc. Put a Chevy pick-up next to a GMC pick-up and most of us can't tell the difference, yet they have distinct tooling, distribution, and other costs running into the millions of dollars.

How do you get started with lean? Start by looking at the processes your employees are engaged in. What reports do they issue that no one reads? How many meetings are people scheduled to attend every week? More than 10? Yikes! What processes are necessary but are not really done well? Look also at your product and service offerings. Like Maple Leaf or GM, do you have many very similar products on the menu that confuse customers and consume resources, or are they all distinct? Ask: Where are we wasting our time? My friend Darren tells his team to ask, "Would the customer be willing to pay for that?"

Lean is about focusing on reducing the costs, waste and complexity in our system that takes away from our ability to properly serve the customer. Do that well, and we create an agile, value-focused organization. Do it poorly, and we just have duct tape that doesn't stick.

Barry Cross is a professor of Operations Management and Technology at Queen's School of Business in Kingston, and best-selling author of Lean Innovation: Understanding What's Next in Today's Economy.

Tags: operations, process, consumer, conundrum, demand, duct, innovation, lean, productivity, quality, supply, tape, team, agile

Comments
Holly Simmons
April 24, 2013 at 6:17 pm

Great article on Lean.  You touch on a very real problem in the industry - people assuming Lean means job cuts.  One of the corner stones of lean thinking is respect for people.  One of my mentors says, "Hard on the problems, easy on the people".  Usually the problem is in the process not in the person doing the job.


One thing I would like to add is the importance of leaders going to see for themselves. Reports don't always paint the whole picture.  Going to where the process happens, watching and asking questions about why things are done a certain way provides leaders with deep insight into what is actually happening verses what should be happening.


Adopting a lean culture starts at the top and needs to be embraced and practiced by senior leadership in an organization for it to be sustainable.

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