Lean Manufacturing, Industrial Engineering & HRD: No Animals Today

Leon Fok asked me a question today about the differences in Japanese and American management practices and how this affects their kaizen efforts. Leon is the Publications Coordinator at Gemba and has been with us a month. His question is relevant to this week’s blogging theme of Industrial Engineering, Human Resource Development and their role in Lean manufacturing implementation.
Leon studied art and graphic design and has experience working at a printer. He knows only the first few things about Lean manufacturing and kaizen that we have been able to teach him through the orientation and daily work at Gemba. Leon emigrated to the U.S. from Hong Kong and has traveled to several Asian countries. He knows very little about kaizen, but has learned enough about it to ask how effective and widespread it is outside of Japan.
I’ll share and expand upon what we talked about in the drive back to the office for 45 minutes in Seattle traffic.
When people in the West talk about the failure of Lean transformations due to “leadership” or “management support” I believe it comes down to a failure in one of two areas, namely strategy and execution. Management can have a poor strategy, incomplete strategy, or one that is in conflict with the fundamental principles of a Lean operating system. An example of a conflict would be trying to realize productivity improvement savings through layoffs or pursuing Lean manufacturing primarily in the hope of making an impact on the opinions of the stock analysts in the short term future. The jury’s still out but Merck appears to be in the throes of this.
The result of a poor or incomplete strategy can cause a company to do everything right from an Industrial Engineering standpoint but still go bankrupt. Some may implement only parts of Lean manufacturing that appear to suit their strategy for the moment. I attribute this to the short term planning of American business management (in contrast to the long-term policy and Hoshin-driven strategies of Japanese companies). While execution can be quicker in America, it may be execution of a strategy based on short term thinking.
Companies struggle with execution even when the strategy is good and aligned with the power of Lean. I have seen this as mostly due to a failure to link the Human Resources Development aspect of Lean transformation to the nuts and bolts Industrial Engineering, marketing, accounting and other “operating system” aspects. Execution over the long term requires properly training leaders in to their role of supporting the Lean operating system that they have installed.
Japanese companies develop generalists with firm-specific knowledge expertise while American firms value specialist managers who bring in ideas from the outside. For more on this, I’ve cited and summarized a Human Capital Institute article in this post. Most Japanese companies will start their new recruits in manufacturing, sales or other front-line roles regardless of what school or what degree they bring, while American firms hire and place people with trained-in skills to specific functional roles.
Traditionally Japanese managers tend to stay with their company for most or all of their career and progress through management by seniority rather than merit. The opposite tends to be true in America. There are negatives with having a company full of long-serving generalists, but the benefit of this combination is that the Japanese manager develops a very good understanding of the operating system of the company (Lean or not) and is able to pass it on to the next generation of managers.
By contrast, executives at American firms can come straight out of MBA schools (or via a stint at a consulting company after their MBA) with or without significant and relevant prior work experience in that company. They may know the Industrial Engineering portion of Lean manufacturing very well, but would have completely missed out on the HRD aspect making this knowledge native to the company over many years and transferring it to at least a second generation of leaders.
There are notable exceptions of American companies who have gone through the process of learning Lean manufacturing and teaching it as a business system to their people. Danaher is one. But I am talking about general differences that are true across the majority of companies in the two countries. This is a very important piece that is missing from the efforts of firms in the U.S. and other countries who are attempting to become Lean.
Executives need to go to gemba and know what to look for and how to contribute to the development of their people to support their operating system. Running the operating system and responding to problems that happen within it is the “firm specific knowledge” and very nearly the definition of Lean enterprise.