As Saint Patrick’s Day fast approaches, and Americans everywhere are gearing up to don silly hats and drink green beer by the bucketful in order to show our deep appreciation for the man that drove the snakes from Ireland, it seems fitting to offer a bit of helpful advice to the Irish lean community. It is the least I can do to repay the Hibernians for providing us with an excuse for a full day of drinking and debauchery, even though most of us in America cannot find Dublin on a map.
Angela Smith is the "Enterprise Minister" over there and, while I have no idea just what being an Enterprise Minister entails, it seem to be a pretty big government job that causes a lot of people to pay attention when she talks about enterprises. She seems to be a lovely lady – you can see her here – red hair, big smile and all. Looks like she is probably one to have a really good time this Friday. She’s smart too – held all kinds of important jobs and offices – even headed up something called the League Against Cruel Sports. (I would appreciate it if any Irish readers can let me know just what those ‘cruel sports’ are. We in the U.S. will probably want to form a professional league for them and create a huge T-Shirt market and reality TV show around them.)
Mrs. Smith spoke a few days ago in conjunction with the release of a government report on manufacturing, and most of what she had to say was good, encouraging stuff. But she fell right into the old manufacturing failure trap when she advised the manufacturing community that, "Northern Ireland must compete on quality, not price."
The good Saint Patrick, for all he did, failed to kill one very big, nasty snake in Ireland – the one that keeps people thinking that cost and quality are in opposition. Consumers – and for all her brains, education and good work, Mrs. Smith is apparently not a manufacturing expert, but a consumer – think that lobster is a higher quality meal than hot dogs; Porsches are higher quality than KIA’s; and the Hyatt is higher quality than the Red Roof Inn simply because they have better features and, as a result, cost more. A lean manufacturer knows better – or at least uses the word ‘quality’ in a different manner.
A room at the Hyatt costs more than a room at the Red Roof Inn because the design specifications for the room itself and for the services to be provided call for greater and more costly resources. To a manufacturer, the measure of quality is not how much has been designed into the product, but how well the people running things meet the specs. Red Roof Inn often meets their facilities and service specs perfectly, which means they have very good quality. The Hyatt often fails to meet its specs, which means they have poor quality. The fact that a 90% quality Hyatt room is still better than a 100% quality Red Roof Inn room has nothing to do with quality to a manufacturer.
That settled, I wonder just how Mrs. Smith thinks that Northern Ireland will compete on the basis of quality, instead of cost? The Chinese and Malaysian manufacturers competing with Ireland in the global economy are just as capable of meeting specifications as Northern Ireland – or the U.S. or anywhere else for that matter. I hope she is not suggesting that the world is willing to pay the Irish a premium for meeting specifications. It is not. I also hope she is not suggesting that Northern Ireland abandon electronics and assembly work, shifting to a focus on high priced Waterford Crystal in the interest of quality, instead. Waterford is really good stuff, but it is not likely to sustain the Irish economy.
The driving premise behind Six Sigma when Motorola first pioneered it – before GE and the consulting world hijacked it and made it a multi-colored belt club that did projects – was that the best quality producer is the shortest cycle time producer, and the shortest cycle time producer is always the best cost producer.
A lean manufacturer sees quality as a critical cost driver that, managed well, will enable them to drive costs down dramatically. An old school manufacturer sees quality as an expense. Mrs. Smith is giving our Irish friends some very old school advice that will drive them in the wrong direction in their struggles to compete. They will win only by competing on the basis of cost and quality.
Don’t throw out her speech entirely, however. Towards the end she points to a small Belfast outfit called Marlborough Engineering, and says they are an example of how to do things right. She was on the mark with that one. Those guys are fast, flexible and customer focused. I suspect, however, that the folks at Marlborough are that good because they don’t pay attention to the good Minister’s advice about quality.
Happy Saint Patrick’s Day everyone. Hoist a green one for me!