I don’t have any idea who Katrina Arabe is – probably just a news writer who writes whatever people tell her without claiming any particular expertise in the subject of her writing. I don’t know what Industrial Trends is either or who reads it, except for the fact that it is where Katrina does some of her writing. As a result, a quote from Katrina about lean manufacturing in Industrial Trends hardly qualifies as a high impact story. But she wrote something so absurd, so outrageous, and so ridiculous that I have held onto it.
"Lean manufacturing is in while vertical integration is out. That’s why companies are outsourcing manufacturing – to stay focused and profitable," says Katrina.
There you have it. All of these plant closings and mass layoffs, shipping work off to places you can’t find on most globes – it’s all the result of lean manufacturing. The significance of the quote is not Katrina’s opinion. Rather, it is that she has described quite well the mentality of the titans of industry that are in charge of so many big companies.
I can very easily envision a room full of MBAs and CPAs at some plush corporate headquarters working with some high priced consultant on a grand Value Stream Mapping exercise; and coming to the conclusion that nobody outside their klan of wizards at headquarters really adds value, so it all has to go. Since manufacturing is work for simple minded folks, it might just as well be done by cheap, simple minded Asians as expensive simple minded Americans.
When I read the Arabe quote, I was immediately reminded of an Abraham Lincoln quote, in which he accused his opponent in the Lincoln-Douglas debates of having used "a specious and fantastic arrangement of words, by which a man can prove a horse-chestnut to be a chestnut horse."
I think it takes just such a specious and fantastic arrangement of words to determine that lean manufacturing is a strategy whereby companies can justify getting out of the manufacturing end of their business. General Electric, for example, has seen wisdom in Katrina’s words and has undergone just such a lean transformation.
Now comes Merck – the big pharmaceutical company. They have announced to the world that they are going to toss 7,000 of their employees out and close five plants. Which plants and which employees are yet to be determined, but since they are "introducing a new production system based on lean manufacturing principles", they are sure there will be no problem lining up candidates.
Some of it is going to come directly from the Katrina Arabe lean strategy, as well. According to the Merck press release, "the Company will also enhance its relationships with key external suppliers to leverage cost efficiencies while allowing it to focus internal manufacturing resources on core activities that provide competitive advantage for Merck" – for those of you who do not speak corporate gibberish fluently, that means they are going to outsource a big chunk of their manufacturing to their suppliers. You know – lean is in so vertical integration is out.
Healthcare in the United States is fraught with all sorts of problems – trial lawyers, the FDA, ethical questions and so forth. I can’t do much of anything about those matters. What I can do, however, is point out worn out irresponsible and lousy manufacturing management, even when Merck and Katrina Arabe try to disguise it as lean manufacturing. I just wish they would be honest about it instead of disguising it in a manner that can only give lean manufacturing a bad reputation.