Lean Won't Work in 2011

Lean Won't Work in 2011

The world has changed and companies must adapt.

If you apply lean to a system or process that is no longer relevant, you aren't really improving anything. So warns Greg Fields, president of Bridgewright Management Consultants.

"To those that survived 2010, congratulations -- you are here to stay," says Fields. "Manufacturers that were able to look higher up the food chain and move their value stream to the enterprise level by being more innovative and offering new products, are left standing in 2010. But what they understand is that the game has changed."

The battle is over, but the economy is still bad, explains Fields. "No amount of continuous improvement will get companies where they need to be if they are busy tweaking systems that were designed and developed for a different environment."

Greg Fields, president, Bridgewright Management Consultants
He points to the example of a company that he has worked with that was an Engineering to Order company. Everything -- processes and systems -- were created for that business model. Current economic conditions have turned the company into a production company who must adjust to a new reality. "You have to step back and examine the root cause of why the systems were created and develop completely new ones." Many need to transition from a culture of Kaizen (incremental change) to one of Kaikaku (radical transformative change), says Fields.

And once you decide you need new systems, then what? Invest, advises Fields. It might have been alright in 2010 to pry the fruit off the tree, says Fields, but now is the time to nurture that tree and use fertilizer. He cited the example of one company in the electronics market that forced value through old poor performing business systems and survived but basically "beat up" the customers with terrible service. Now with things improving the customers are leaving and going to another supplier who has figured out how to survive and grow with investments in new systems while providing good customer service.

Asked about access to capital in 2011 Fields sees improvement. "There is a lot of cash that has just been standing on the sidelines. If you have good products and a good team there is money available. Private equity is always a route.

"What hurts U.S. manufacturers is their conservative nature. They are old age, old line companies run by people that are not the ones who took the risk 20-30 years ago. This management population benefitted from that risk-taking and now is risk-averse. That must change. They must take risks."

See Also --Other 2011 Predictions

IR's Mike Lamach: Building on a Strong Hand


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