Apparently the manufacturing community should be on a continuous improvement curve, but consultants and Shingo Prize executive directors are exempt. The article on Delphi in Manufacturing & Technology News, in which Shingo Prize executive director Ross Robson repeats the "Delphi was lean but legacy costs were too much to handle" mantra is disappointing, to say the least.
When asked if the Shingo Prize should take financial results into account, ala the Baldrige Award, Robson’s response was, "They’ve taken their criteria now and made it so heavy on financial results that they have lost sight of what is being evaluated. You may as well fill out your results and the [manufacturing] process doesn’t make any difference." That’s pouting, instead of the product of serious reflection. Perhaps Mr. Robson should be reminded that Eli Goldratt was right: the Goal of manufacturing is to make money. If a lean strategy does not generate significant improvement in financial results, it failed. Period.
Delphi was not lean. Their inventory turned so slowly it was almost imperceptible. Their cost did not improve. They may have achieved excellent quality levels, but they proved unable to translate that to bottom line improvement. We don’t need to go over the same old ground. They looked lean, but they weren’t lean. The legacy cost whining began after it was plain that their lean effort was not producing results. They are back to the same old, worn out automotive industry solution – blame it all on the Unions, close plants, outsource work to Asian countries, blah, blah, blah. They have a lawyer in charge who is trying to accomplish in Court and on Wall Street what they were unable to accomplish in their plants.
Mr. Robson would serve manufacturing and the Shingo Prize much better if he would focus his energy on what lessons can be learned. Clearly the bankruptcy of Delphi is evidence of a gaping hole in the Shingo Prize criteria, as well as in the lean body of knowledge. That is no big deal – just learn from it, improve the Prize criteria, and move on. It is what good manufacturers do every day – they make mistakes, they learn, they improve. To take a defensive position, however, and repeat the self-serving rationalizations coming out of Delphi management does a disservice to manufacturing and to Shingo’s legacy.