Category: APQP

REFLECTION: FOR STUDENTS: Study Deming’s philosophy, and and observe how critical Culture is to how Toyota dominates long term.

FOR ACADEMICS: Teach how interconnected organizations are more resilient than silo shaped organizations

FOR PROFESSIONALS/PRACTITIONERS: If Top Management is using Lean incorrectly for short term financial savings, demonstrate using COPQ how the Hidden Factory is damaging the company under the disguise of “Lean”. If they still will not react strategically, search for other employment, as the more valuable you are to the company, the more easily you are converted into short term savings. Cutting the experienced and hiring those fresh out of school with little to no experience is a quick way to claim “savings”. Replacing the years of lost experience by training the new employees and paying for all their errors is a massive expense.

The Goal of Lean Management

Some (especially top management and supply chain) misinterpret lean as the ability to do more with less by eliminating waste and decreasing costs.
This idea of Lean often leads to two critical issues-

1. Companies cutting labor that is no longer “needed” to “reduce waste” so they can “do more with less.” It is a fancy way of telling the rest of the company employees to work harder to take up the slack for all the people I just fired and is very damaging to buy-in. Companies lose tribal knowledge that the company was unable to capture, and new learning costs are incurred when the costliest employees are cut to save money (and it is a frequent occurrence when Lean is used for cost-cutting).

2. Supply Chain chooses suppliers based upon financials, and OTD, not supplier quality. Lots of promises and preliminary approvals that drag on and on. You get what you pay for. Low cost frequently equates to low quality. If a competitor knows their product is better, they will raise the price because others will want to buy it. Cheap suppliers look good for the first quarter, but when the hidden costs of rework and recalls hit, somebody has to be held accountable.

Was it Quality’s fault? Supply Chain’s fault? No. It was the Administration was accountable for allowing the hidden factory back into the culture. Supply Chain especially should be able to understand when the QM tells the board that we need to invest in better suppliers. The goal of Lean management is to maximize customer value while minimizing waste. Allowing rework into the factory through the supplier is a total waste of resources, and it can cost a lot of money, time, and, frequently, loss of reputation in the eyes of potential customers. Investment in your company brings long term gains, not slashing people and resources.

It is also essential to set up an APQP/PPAP process that matches the needs of all the stakeholders. Two main factors to consider are the expected Volume of orders for the product or service and the Variety of products / and services. With products of high levels of variety (such as frequent custom orders) with relatively low product volume, Agile Project-type planning control is most effective. Low variability (not much change customer to customer), but substantial orders, would bring about a need for lean planning.

Conclusion

Lean is not a tool to be used like a Machete to “cut the fat” quarter to quarter. Eventually, while you are hacking at the perceived “weeds and vines” you will cut your company’s foot off and some of your foundation will be lost. Add value and eliminate waste carefully by categorizing value and waste as a team.

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