Respondents Short-Sighted in Lean Survey

Oct. 24, 2007
Managers might be expecting the wrong near-term results when it comes to the benefits of lean manufacturing, resulting in apathy. A recent lean production survey conducted by Lean Enterprise Institute (LEI) found that cutting costs was rated as the top benefit to the process by managers and executives.

Since 2003, LEI, a nonprofit research, publishing and training organization located in Cambridge, Mass. has conducted an annual survey of manufacturers to learn about the major obstacles and trends in moving companies from traditional manufacturing systems to Lean. LEI also asked customers, “In your experience, what have been Lean’s biggest benefits over the years?”

Nearly 2,500 people were surveyed, 46.1% of whom rated “reduced cost” as the biggest benefit of implementing Lean management concepts. Respondents rated the other top benefits as increased customer satisfaction (16.3%), reduced inventory (7.5%) and increased product quality (6.4%).

“Lean is being sold as a cost-cutting program by middle management. When senior management doesn’t see the expected cost reduction immediately, they cut their costs and abandon it,” says Chet Marchwinski, a director at LEI. “Although cost savings is a side benefit of using Lean, it’s really a growth strategy for business.”

Marchwinski sees Lean’s primary benefit as being the way in which it helps employees build quality and capacity into the process, resulting in a more competitive company. “Higher quality products with shorter lead times are the results of a proficient Lean system. It also frees up resources.”

While Lean practices have been slow to catch on in the pharmaceutical industry, Marchwinski says he thinks Lean’s visual techniques can provide advantages for regulated industries such as pharma. He points out that the use of graphs, pictures and diagrams could help with mandated GMPs and training procedures. In addition, he notes that Lean facilitates quick changeovers and continuous improvement.

There are obstacles to implementing Lean. In the LEI survey, middle management’s resistance to change (36.1%) was cited by respondents as the primary barrier. Lack of implementation know-how (31%) and employee resistance (27.7%) were next on the list. Last year, backsliding to the old ways of working was listed as the primary obstacle. Backsliding slid to sixth place in this year’s survey.

“Lean management principles expose problems that can be threatening to middle managers,” says Marchwinski. “In order to get middle managers on board with Lean, sometimes you have to change the way they are judged.”

This might mean using different metrics. For example, traditional financial metrics often need to be removed from everyday management decisions about key processes. Instead, measures such as cutting defects and machine up-time might become more important. However, when it comes to being judged on their job performance this might be harder and why middle managers are reluctant to adopt Lean methods, according to Marchwinski. When implementing Lean, managers need to help employees look for waste and remove it.

Besides being “not easy to implement,” Lean is often tried when a company is having a crisis or is in trouble. Marchwinski says this is the wrong time. “Lean is not a practice to reduce head count. It is a productivity improvement tool and strategy.”

About the Author

Bill Swichtenberg | Senior Editor