The featured article on Superfactory in January is a piece by one of the heavyweights of the lean movement, Richard Schonberger, titled The Skinny on Lean Management. His primary point deals with how lean affects sales and marketing, and he decidedly takes traditional accounting to task as well.
Lean management doesn’t resonate in marketing and sales. Nor does it
among boards, senior executives and investors. Reasons relate to where
lean tends to do most of its work – in operations – and its usual
presentation as an attack on waste. Obscured are its much greater
potential in the distribution pipelines and its strong customer focus.
What lean does, above all else, is provide quick, flexible response to
customer demand. But muddling that message are perverse accounting
practices that discourage quick delivery well matched to customer
It was one of his final statements that really surprised me.
advanced IT gets most of the credit, collaboration is the foundation.
Wal-Mart’s 2,000-odd suppliers near the retailer’s Bentonville, Ark.,
headquarters maintain multifunctional teams on site. Daily, along with
their Wal-Mart counterparts, they work out pricing, packaging,
logistics, promotions, product options, product coding, weights and
measures, sharing of actual and forecast demand data, and so forth.
Wal-Mart a "grand champion" of lean supply chains? That raised my eyebrows more than a bit. We've taken the company to task several times for pounding on suppliers and creating incredibly long supply chains by outsourcing to China.
year, and so they and other George-brand basics will remain in short
supply in most of its 3,443 U.S. stores until 2007's second half,
depriving the retailer of tens of millions of dollars a week it sorely
needs. "The issue with apparel is long lead times," says the quietly
intense [Chief Merchandising Officer John] Fleming.
Long lead times caused by long supply chains. Compare that to one of my comments on my visit to American Apparel a couple months ago:
some dyeing that is done a few miles away. Design is done, often (and
sometimes infamously) tested by Dov Charney himself, and sent to the
factory floor. Time from raw concept to when a finished product is in
the over 200 stores worldwide? Eight (8) days. Compare that to the
weeks and months it can take to send a container across the ocean.
The outsourcing and long supply chains are definitely not "lean" in my mind. After talking with Richard on these issues, he did make one good point: "pounding on suppliers" is sometimes more beneficial than being "nice" as Wal-Mart's suppliers, the ones that survive, also tend to become extremely strong competitors in other markets. They have to in order to make a buck off of Wal-Mart.
I personally don't shop at Wal-Mart, not out of any protest but simply because I find their stores very claustrophobic. Just too much stuff. I don't need any more stuff, and my clothes shopping is limited to about three times a year, 90% of which is at one store. That's all I can handle. Quality over quantity.
Wal-Mart does deserve some credit. They've been very successful… millions of people can now afford
products they previously could not, and hundreds of thousands of people
have jobs that previously would not have. Some may not like the quality of job or how the products are made, but those two facts are still real.
I've never been afraid of Wal-Mart, unlike those that said they have become just too big. We said the same about Montgomery Wards, Sears, Microsoft and others. Perhaps in a decade we'll say the same about Wal-Mart. The top of the heap have a tendency to be displaced by game-changing methods and technologies. A company called Tesco, which we've talked about previously in terms of their lean prowess, may soon put Wal-Mart on the run.
long outpaced the Wal-Mart-owned discount chain Asda. The British giant
currently has 34% market share, nearly double that of Asda.
Analysts say that Tesco's big advantage over major international rivals, which also include Germany's AldiLidl,
is its unrivaled ability to manage vast reams of data and translate
that knowledge into sales. While data crunching may sound dull, it has
given Tesco two major advantages: an unmatched ability to operate
multiple retail formats—ranging in size from convenience stores to
hypermarkets—and the market knowledge to offer what many analysts say
is the best and broadest range of house brands from any retailer.
Two monster retailers duking it out using high tech tools to get consumers what they want, when they want it, at the lowest possible price. Sounds pretty good to me. And fun to watch to boot.