In some respects the lean manufacturing community is like the IT community. There are software people and there are hardware people, with not much common ground between them. I am a manufacturing software person, which is to say that I was not willing to work as hard in college as the folks who got engineering degrees, so I blog away about organization, accounting, people issues and so forth, with only a passing reference to manufacturing technology from time to time, treating lean as though it is 99% software. It is just as bad when you venture into the manufacturing engineering world. They go on and on about machines and automation, paying short shrift to the soft side of manufacturing. To read many of their sites, you would conclude that lean manufacturing is purely a function of what kind of machines you buy. In fact, lean manufacturing includes both the soft side and the hard side, and machines are central to manufacturing in any scenario.
To their great credit, there are a number of manufacturing technology folks who are working very hard on lean. While they sometimes go back and forth in some of the lean forums arguing about the minutiae of the correct way to calculate OEE, or the proper role of certain types of conveyors, or the most effective cell footprint, to the point of missing the forest for the trees, there is no questioning their intent or their contribution to lean. Mike Gardner at the TPM blog is really a gem. He is leading a machine centered lean effort, but has a very well balanced overall view of lean. Guys like him who can walk on both the hardware and software sides of the street are rare and essential pieces to getting factories truly lean.
The people at Toyota, of course, have long kept manufacturing technology in sharp focus, and a pretty good case can be made that the real key to Toyota’s success is that they understand the appropriate level of technology to use and how to integrate it into the soft side – people and information – better than anyone else. For that matter, his genius at innovative integration of people and machines accurately defines Henry Ford, the originator of lean.
The mantra at Toyota and among the effective lean companies when it comes to machines is that a machine is at its worst performance the day it is purchased. Rather than depreciate, a machine should become more reliable and more efficient over time as it is maintained, modified and continually improved by the operators, engineers and maintenance people who take ownership of it. It should become more effectively and seamlessly integrated into the process flow over time.
A recent survey of senior executives in the automobile industry demonstrates just how far that sector is from really understanding lean manufacturing, or of understanding manufacturing at all for that matter. 53% of them, all with job titles of CEO, CFO, or C something O said they were four square in favor of outsourcing machine maintenance. People with the technical skills to take care of machines were just too expensive and too hard to recruit and keep. Outsourcing ownership and responsibility for machines is the antithesis of the lean principles of continually tightening the integration and improving the performance of machines in process flows.
Outsourcing is to these folks is what hammers are to carpenters. They may use a lot of tools over the course of the day, but it is the one they keep hanging from their belt, ready to pull and use with the speed of an old western gunfighter. In fact, the survey said that over 70% of the execs said that all skilled labor was a good candidate for outsourcing.
Skilled labor is problematic to the professional managers because it cannot be managed by numbers. Unskilled folks are interchangeable parts that can be hired and laid off at will – no real thinking required. Skilled people, on the other hand, require actual management. They have career choices and their lives are not in the hands of management. They have to be treated with respect or they will leave. The people who run the small and medium sized, privately owned manufacturers understand that managing people is the most important element of their jobs. The professional managers spread pages of the Wall Street Journal out on their office floors, kneel on them facing New York City and pray to their gods of finance six times a day. Messy issues like people are a distraction when there are so many numbers and ratios to calculate.
The ultimate irony in all of this is that the same executives who think the more skilled people are, the better off the company is to outsource them, are the driving force behind the Bush administration push to mold the new economy around more and better skilled people. Commerce Secretary Carlos Gutierrez repeated that philosophy, saying that China is not a threat because they are building their manufacturing economy around unskilled labor. He said "the United States needed to keep building its economy looking at value-added products, high technology and better paying jobs, and for that needed to better train its workers". I have to wonder who the skilled workers are going to work for – the executives of the auto industry don’t want them. In fact, their business vision is the same as China’s – build the whole thing around unskilled labor.
Lean does not change the central focus of manufacturing from a core of manufacturing technology. While lean does a better job of integrating a relatively unskilled production workforce with the machines they use, creating ownership and an economic synergies, there is just as great a need for people with deep knowledge of manufacturing technology and solid experience in optimizing its performance as ever before. That means skilled labor and that means bigger paychecks. In Detroit and elsewhere among the publicly held manufacturers, the old Sloan accounting and management model is so deeply ingrained in their thinking that people who command a good wage will never be seen as assets, rendering lean virtually impossible.
The results of the survey were broadcast to the world as part of a marketing effort by an outfit that is in the business of providing third party machine maintenance services – the guys the work gets outsourced to. I hope they have a backup business plan or a branch office in China because a manufacturing company that will outsource predictive and preventive maintenance of its core technology – letting someone else assume ownership of the results – will outsource anything (except accounting and senior management, of course, since they perceive those functions as the only true value adding endeavors they have). It is a matter of time before all of their manufacturing is outsourced and the third party machine maintenance providers will have to go find another inept management team to work for until there are none left.