Chain Reactions

Are Lean Manufacturers Trying to Starve Themselves?

In the never-ending push to be clever, pundits are constantly dreaming up new buzzwords to describe something that everybody is already familiar with, and sometimes they'll come up with something that nobody has ever heard of, mainly because it doesn't actually exist. Today's example of an unnecessary buzzword is anorexic manufacturing, which doesn't actually have a definition yet so I guess it's up to me to define it before I deride it.

Anorexic manufacturing (if it existed) is the practice of reducing so much waste out of a plant's daily operations that the plant is no longer able to make products due to the complete lack of raw materials and production components. In other words, the plant is literally starving itself right out of business.

Anorexia itself, of course, is a serious health issue, especially among young women, and its application as an adjective to connote "leaner than lean" strikes me as a very poor choice of words. Fortunately, its usage isn't nearly as ubiquitous as the expression "it's like on steroids," another wrong-headed attempt to associate abusive health behavior with business practices.

A quick Google search indicates that the coining of "anorexic manufacturing" dates back at least to 2006, and it's probably even older than that, but it appears again in today's Wall Street Journal article, "For Lean Factories, No Buffer," in a quote from consultant Paul Martyn, who says:

"Prior to the recessionand now in the recoverywe aren't just lean, we've become anorexic."

When you read the article, though, you discover that it's mostly just another variation on the same basic article we've seen at least since the terrorist attacks on 9/11: What should manufacturers do when their suppliersat least temporarilycan't supply them with parts? Today, the article is about Japan, but we've seen the same article over the years about suppliers going bankrupt, suppliers going on strike, suppliers being caught in natural disasters of all kinds, suppliers in war zones, etc. The premise of the article is always: Gotta stock more inventory because lean doesn't work during times of crisis.

You would think, then, that there's evidence that companies are indeed suffering from a lack of inventory, that they're literally running on empty. And yet, the article admits that inventories are up 9.1% from a year ago, with the total value of inventories among U.S. manufacturers and traders well over $1 trillion.

There's a curious disconnect in this article, which tells us in one paragraph that during the recession, "companies got stuck holding unsold goods," and in the next paragraph claims that the recovery has been sluggish because "there hasn't necessarily been product on the shelf to meet that demand." Maybe the ever-climbing price of oil, continuing unease about unemployment, wars and unrest in virtually every corner of the globe, the weakness of the U.S. dollar, and just plain rotten weather throughout the United States so far in 2011 might be contributing factors as to why the recovery hasn't been faster.

Maybe we here at IW take a longer view of lean manufacturing than the WSJ does, but to associate "lean manufacturing" with an epidemic of stockouts (which the article doesn't offer any actual evidence of) requires a mindset that ignores the whole philosophy of continuous improvement. If anything, lean manufacturers are in better shape to react to crises because they have a much better idea of how to react, and by virtue of such concepts as cross-training they're better able to deploy the labor and material resources to increase production as needed.

So please, all you pundits out there, please find another adjective than "anorexic" to describe a business practice. The thought that lean manufacturers are trying to starve themselves by refusing to hold more inventory is not only a poor metaphor but it's also insulting to the entire idea of continuous improvement.

TAGS: Supply Chain
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