The Cost of a Lean Failure

I sometimes call this short term gain, long term pain. In common with other posts to protect the guilty I will use an anonymised case study to make the point.

My example is an FMCG company that sells to the end consumer through distributors. 

The business has grown steadily over the past few years and the leadership who have always been very sales focused have a reputation for being somewhat remote and dictatorial. JDI (Just Do It) is the normal response by the management to any push back from the team leaders.  The workforce is mostly unskilled and considered disposable. Minimum wage is the norm and the factory facilities (toilets, canteen etc) are run down and rather unpleasant. 

This business decided to “do lean” so of course started with 5S. Team leaders were tasked with “doing it”. Things improved for a few weeks but the process did not really get past 3S. 

Process improvement was next and rework was identified as a problem. One team leader who had previously worked in automotive did a good root cause analysis of the issues and identified that many of the problems were caused by worn tooling on the line. The budget holder was the buyer and he had been told to reduce the cost of maintenance. Predictable outcome of course. The suggested improvement was ignored.

The production manager led a process mapping exercise and identified a lot of waste in the warehouse. The warehouse team worked hard to reduce search time and there was an improvement. So they made a warehouse worker redundant.

Strangely the next process mapping exercise could not get any suggestions from the workers. So the management imposed changes and of course they got it wrong. The changes did not improve the flow or the rework levels.

So management decided “lean” did not work for them.

The costs of this failure are mostly human in the short term. There were short term gains – but the long term pain was that there was no more improvement. It would also mean that if there was another attempt to introduce lean it would take a massive amount of patience and support to get past the cynicism and suspicion.

I suppose in the end the market will ensure that the business fails so that will be the ultimate long term pain, for the workers and the owners.