Chain Reactions

Going Lean Is In The Bag

In my book on best practices in supply chain management, I look closely at the application of lean manufacturing principles as practiced by the automotive industry (especially Toyota), aerospace (Boeing) and high-tech companies (Dell, IBM). Lean, quite simply, is one of the most popular topics in manufacturing circles these days, though there sometimes seems to be more talk than there is action.

There are indications that lean is migrating to other industries, including one that you might think would NEVER go lean -- high-end fashion. In a Page One article in the Oct. 9, 2006, edition of the Wall Street Journal (if you have a subscription to, go to the article titled, "Louis Vuitton Tries Modern Methods On Factory Lines" by Christina Passariello).

The thinking in fashion circles had long held that running out of high-end products like purses and bags is a good thing. (By "high-end" I mean bags -- empty bags -- that cost hundreds and sometimes thousands of dollars. Personally, if I'm going to spend $700 on a Louis Vuitton bag, there had better be at least a new computer in the bag, but then again, I don't think I'm part of the demographic that they're trying to reach.) These ultra-chic bags are sewn by hand, and in some cases even signed by the craftsmen. As the article explains, "A waiting list for the Paddington bag made by French fashion brand Chloe created such an aura of desirability last year that it became a cult item -- and established Chloe as a hot brand."

However, bottom-line thinkers at these apparel companies are now having second thoughts about limiting the amount of products they can actually sell. Louis Vuitton executives liked what they'd seen of the lean manufacturing techniques used by Japanese automakers, and hired McKinsey consultants to help reorganize the factories so they could shift production to the best-selling product lines.

It took something of a cultural shift: Instead of having specialists work on just one task at a time, McKinsey helped train the craftsmen to handle multiple tasks. "Gluing, stitching and finishing the edges of a pocket flap, for example, became the job of one worker, not three." By de-specializing the workers to some extent, Louis Vuitton can now make more types of bags. A corollary benefit is that the new system makes it easier to detect quality problems and defects. The company is now rolling out its continuous improvement program to include its distribution centers and retail stores.

TAGS: Supply Chain
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