Supply Chain View

The Lean approach is so well established in manufacturing that it’s easy to forget how novel its ideas are in the service sector. So novel are they, and so popular, that in the U.S. there is currently a powerful brain drain of Lean practitioners away from manufacturing and into services, according to a recent article on the website of Reliable Plant magazine.

Here’s the article quoting Jake Stiles who leads a head-hunting firm specialising in Lean experts:

Those willing to jump from manufacturing companies to hospitals or banks are getting pay raises of 30 percent to 40 percent, compared with 20 percent raises moving from one manufacturing company to another, says Jake Stiles, president of an executive search firm that has concentrated exclusively for 15 years on finding lean-regime experts.

This is good news for services: with support from their senior management, I have no doubt these practitioners will improve quality and productivity (note that caveat). But it is bad news for manufacturing: in all advanced economies, this is still a shrinking sector.

I have a personal take on this phenomenon as well, as I recently decided to leave my current employer to work for a company in the service sector. My new employer was looking specifically for Lean experience, and although initially I’ll be concentrating on more traditional supply chain processes I am expecting involvement in securing productivity improvements in white-collar transactional services too.

As an aside, one quote from the article stood out. A Bain survey suggests that

just 19 percent of companies that have tried [Lean] are happy with the results

Now Mark Gottfredson, head of performance improvement at Bain, may have his own axe to grind, but let’s take those figures at face value for now. What do they say to you? If you’re a “Lean believer” you probably think it indicates a lot of poor implementations. If you’re not, you probably take the view that this Lean stuff is all a bit of a fad and doesn’t really work. Interesting how the same data can be interpreted in such different ways, isn’t it? A topic for more investigation another time, I think.

Links

http://www.reliableplant.com/article.asp?pagetitle=Toyota%E2%80%99s%20vault%20to%20No.%201%20puts%20focus%20(good%20and%20bad)%20on%20lean&articleid=6551 – the article from Reliable Plant