Manufacturing Culture

What is your organizational culture? Is it entrepreneurial? Work hard, play hard? Do you value team work or innovation? If organizational culture is “the way things get done around here”, then being realistic about your culture can help you define your best manufacturing strategy. There are a lot of buzz words out there for manufacturing and management strategies: TQM, Six Sigma, JIT, cellular manufacturing, all of them touted as the next great cure for all of your woes. Frequently, a company will embrace one of the concepts and rush to implement it. Then, when they begin to encounter resistance from employees entrenched in the old ways, deadlines are missed, and costs rise, they are faced with three relatively unattractive alternatives: dig in and pray that things get better, go back to limping along in the old manner, or embrace the next big idea. Most of these ideas fall under the umbrella of “lean manufacturing”, which is a powerful concept that is generally misunderstood.

When Japan began to soar as an industrial leader in the eighties, and the U.S. began to struggle, we took a closer look at what the Japanese were doing right. Several in-depth studies were published, notably The Machine That Changed the World by Womack, Jones and Roos. Womack is credited with popularizing the term “lean manufacturing”, and his study of the Toyota Production System examined the manufacturing philosophy developed by Taiichi Ohno and Shigeo Shingo that has turned Toyota into the world’s largest auto maker. This focus on Japanese success stories led to a general perception that lean manufacturing is a Japanese invention, deeply rooted in Japanese culture, and therefore somewhat foreign to the American way of doing business.

The fascinating thing is that the Toyota Production System took its inspiration from an American statistician named W. Edwards Deming, who was sent to Japan in 1950 by the U.S. government to assist in planning for the 1951 Japanese census. Known as an expert at applying statistical methods to manufacturing processes, he was invited to speak to a group of Japanese industrial leaders and engineers. The Japanese knew that the world equated “Made in Japan” with “cheap and shoddy” and were sincerely looking for guidance in moving toward producing quality products. Deming delivered a series of lectures over the summer of 1950 that revolutionized Japanese industry. Deming’s message, in a nutshell: if you focus on quality, over time, quality will tend to increase and costs will fall; if you focus on costs, over time, quality will tend to decrease, causing costs to rise. His theory of continual improvement underscores the idea that there is never a moment when you can walk away and say, “OK, everything is running smoothly there, I’m done with that.” You must engage in a continuous cycle of feedback: plan, do, check, act. Begin again.

Deming was invited back many times over the next ten years; the Japanese so revered him that in 1960 Emperor Hirohito awarded him The Order of the Sacred Treasure, Second Class, for his contribution to Japan’s industrial rebirth. The irony is that Deming’s ideas were largely ignored here at home until after the Japanese took them and ran with them. While there can be no arguing that Taiichi Ohno is a genius, it is interesting to note that in the lobby of Toyota’s world headquarters in Tokyo there are three pictures: one of the company’s founder, one of its current chairman, and the third, and largest, of W. Edwards Deming.

So, clearly, TPS is not “rooted in Japanese culture.” It is a business philosophy that focuses on quality and continual improvement. The reason that the implementation of lean manufacturing sometime fails in American business is not because it is Japanese, but because the company trying to implement it has not taken a good hard look at its own organizational culture. Lean is not “plug and play”, nor is it a one-size-fits-all panacea; it is a guiding principle. How you implement it will depend on many factors, including how big you are, what kind of product you make, who your customers are. Are you a company that likes to works fast, let the chips fall where they may, we’ll clean that up later, let’s get the product out the door? Try to play to your strengths. Do you have some areas of your operation that resist all your efforts at efficiency and automation? It might be time to leave it alone and work around it. It’s important to be realistic about these matters. Continual improvement is just that, a constant process. Perfection is never achieved, but perfection is not a requirement for success.

ERP systems, likewise, will not solve all your problems. But a good system will offer you the adaptability and flexibility to begin to achieve your short term and long term goals. Chances are, if you have one, you are not using all of its features. In the short term it may not be important to tap into all of its functionality; however, it is important to frequently reassess your needs and your system’s capabilities so that you continue to tailor the system to your needs. While there may be some features that will never be a fit with your business processes, you may be surprised at the depth of functionality you are missing in some areas. In the same spirit of continual improvement, it is wise to continually train and retrain users of the system. This will maximize the synergy between your employees and the system. Remember that no one knows your business like you do; you have the power to define a strategy that works for you.

If you need help selecting an ERP system for your manufacturing environment, email me at solutions@ACIconsulting.com or visit us at http://www.ACIconsulting.com and I’ll put our team to work on it.