It’s only cost reduction, and other Lean myths
With the U.S. economy showing only glimmers of positive movement, now could be exactly the right time to make the Lean manufacturing changes your company needs. But first you have to understand what Lean is and isn’t. That is a key message from Steve Cook, a former Dell Computer supply chain executive and newly appointed chief operating officer of MFG.
With the U.S. economy showing only glimmers of positive movement, now could be exactly the right time to make the Lean manufacturing changes your company needs. But first you have to understand what Lean is and isn’t. That is a key message from Steve Cook, a former Dell Computer supply chain executive and newly appointed chief operating officer of MFG.com, an online marketplace for the sourcing of parts and manufacturing services.
“To be successful with Lean,” said Cook, “you need a burning platform.” Cook spent 7 years as an electrical engineer and pilot in the Navy before joining Dell Computer Corp. for more than a decade of manufacturing operations management and supply chain leadership. His “burning platform” had been Dell’s least-utilized desktop computer assembly plant, which clearly had too much capacity. Cook led a successful brownfield Lean conversion of the plant, and said he learned a lot in the process, including some of the myths of Lean.
1. Lean = Job Cuts
“If done well, Lean initiatives are less a cost-cutting exercise and more a growth exercise,” said Cook. Success if dependent on the entire team, and individuals need to know they’re performing Lean activities to help the company grow, not to engineer themselves out of a job. “If there’s not a commitment to the team, the team won’t be committed to implementation,” he said.
2. Lean = Doing More with Less
Lean is about doing more to get more, knowing that reducing waste is a growth strategy, a way to help the company be more competitive, Cook said.
3. Lean = Cost Reduction
While Lean initiatives clearly involve reducing costs, “it’s a myth if it’s the only reason why you’re doing Lean,” emphasized Cook. “The underpinning of Lean must be about making the organization more successful.” Manufacturers must understand the customer value stream, and understand what customers are willing to pay for, he added.
“We had a saying at Dell,” said Cook. “You’ll get beat up for high cost, but you’ll get fired for quality/availability issues.”
Successful companies “engage the entire team, look at tasks through customers’ eyes, and use those insights to grow the business,” said Cook. Looking through the customers’ eyes means taking the point of view of internal and external customers, who often have different needs.
“Lean is about embracing change and realizing that change itself is a competitive advantage. Change is the lifeblood of an organization,” said Cook. Lean is “also about the people, [who can be resistant to change]. Let people learn about Lean, and constantly be willing to listen. Focus on the whole team, and the whole organization,” he added.
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Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.