Page 128 - Operations Strategy

lEAn oPERATionS 103
of ‘the inhumanity and the unquestioning adherence’ of working under such a system.
Similar criticisms have been supported in some studies that point out some of the nega-
tive effects of the flexibility principles within the lean approach.
Lean principles can also be taken to an extreme. When lean ideas first started to have
an impact on operations practice in the West, some authorities advocated the reduc-
tion of between-process inventories to zero. While in the long term this provides the
ultimate in motivation for operations managers to ensure the efficiency and reliability
of each process stage, it does not admit the possibility of some processes always being
intrinsically less than totally reliable. An alternative view is to allow inventories around
process stages with higher-than-average uncertainty. This at least allows some protec-
tion for the rest of the system. The same ideas apply to just-in-time delivery between
factories. The Toyota Motor Corp., often seen as the epitome of lean, has suffered from
its low inter-plant inventory policies. Both the Kobe earthquake and fires in supplier
plants have caused production at Toyota’s main factories to close down for several days
because of a shortage of key parts. Even in the best-regulated manufacturing networks,
one cannot always account for such events.
Arguably, the major weakness of lean principles is that they can break down when fluc-
tuations in supply or demand become extreme, especially when they are also unpredict-
able. The pull control of hamburgers in a fast-food restaurant works perfectly well when
demand stays within predictable limits. However, when subjected to an unexpected, large
influx of customers, it leaves most of those customers waiting for their meal. Similarly, in
very complex and interrelated processes, lean principles are sometimes difficult to apply.

lessons from lean

Looking back to when the lean approach was first introduced into Western manufac-
turing, it is easy to forget just how radical and, more importantly, counter-intuitive
it seemed. Although ideas of continuous improvement were starting to be accepted,
the idea that inventories were generally a bad thing, and that throughput time was
more important than capacity utilisation, seemed to border on the insane to the more
traditionally minded. So, as lean ideas have been gradually accepted, we have likewise
come to be far more tolerant of ideas that are radical and/or counter-intuitive. This is
an important legacy because it opened up the debate on operations practice and broad-
ened the scope of what are regarded as acceptable approaches.
Similarly, the idea that protecting parts of the operation (by buffering them with
inventory) is not sensible in the long term has also had profound effects. Opening up
an operation’s resources to its external customers is now seen as promoting the same
behavioural change as reducing inventory between the stages of a process. It exposes
the operation to the realities of the market and forces it to adapt to what the market
really wants, often by increasing the flexibility of its resources.
A further legacy that the absorption of lean ideas has brought operations in gen-
eral concerns the interdependence of a number of important ideas. Before the lean
approach there was relatively little understanding of how inventory, throughput time,
value-added and waste elimination, utilisation and flexibility all related to each other.
Although the way in which lean philosophy integrated these ideas was novel, it was at
least coherent. In fact, it legitimised the whole idea of a philosophy of operations. Prior
to lean, operations was a relatively loose collection of ideas from the scientific manage-
ment era of the early twentieth century, some elegant but relatively naïve mathematical
modelling and simple practical ideas based on pragmatic operations practice.

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