Fordham -How effective decision-making is within the IT department - Analysis...
Melj0312r
1. 2/15/12 3:12 PM
MANUFACTURING
LEADERSHIP
people that it’s your obliga-
believe I know everything.”
tion to disagree. I still don’t
JOURNAL
D I A L O G U E “We say to our
Organization
The Adaptive
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Director of Operations,
McLaren Automotive
—Alan Foster
TW E N TY D O LLA RS
EXECUTIVE
Rockwell Automation’s Keith D. Nosbusch and John A. Bernaden explain
The University of Wisconsin’s Rajan Suri argues that reduc-
ing lead times trumps the advantages of Lean and cost-based methods.
A collaborative, flexible structure is the key to rapid change, say Jeff
Lawrence and Nadir Ahmad of Cambridge Leadership Associates.
DEVELOPING AN ADAPTIVE CULTURE
how smart manufacturing can spark industry-related employment.
IT’S ABOUT TIME—TO ADAPT
Quick Response Manufacturing:
B E T T E R F U T U RE / M A RC H 2 0 1 2 /
THE MULTIPLIER EFFECT
FO R A
B O LD I D E A S
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MARCH 2012 M A N U FA C T U R I N G E X E C U T I V E L E A D E R S H I P J O U R N A L VO LU M E 3 , N U M B E R 2
2. 2/15/12 10:17 AM
By Rajan Suri, Emeritus Professor and Founding Director, Center for
Does your manufacturing company have the collaborative organi-
zational structure, flexible technology, and system-wide empower-
British automotive company McLaren is heading for the fast lane
Members of the Manufacturing Executive Leadership Council
For makers of custom and low-volume products, Lean and tradi-
Adaptive Organization
Quick Response Manufacturing, University of Wisconsin-Madison
tional cost-based improvement methods may not be the best fit.
of the world’s luxury car market. Its new purpose-built produc-
discuss the organizational, cultural, and leadership qualities
tion facility, with Alan Foster in charge, is based on a forward-
thinking operational philosophy of simplicity and flexibility.
Th i s I s s u e ’ s Th e m e
By Jeff Lawrence, Principal, and Nadir Ahmad,
Consultant, Cambridge Leadership Associates
20 /McLaren’s Flexible Factory
ment to adapt successfully to rapid change?
Edited by Jeff Moad, Executive Editor, MELJ
8 /Developing an Adaptive
By Paul Tate, Executive Editor, MELJ
Culture: The Time Is Now
2 8 /A Passion for Agility
1 2 /It’s About Time
that enable adaptability.
r o u n dta b l e
d i a lo g u e
o pi n i o n
The
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4. MANUFACTURING
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Editor’s Letter / David R. Brousell
The Urgency of Adaptation PRESIDENT
........................................... HEATHER L. HOLST-KNUDSEN
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I
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+1 212-290-8724
hholstknudsen@thomaspublishing.com
VICE PRESIDENT &
N THINKING ABOUT THE MEANING OF ADAPTATION, CHARLES EDITORIAL DIRECTOR
Darwin, the English naturalist whose 1859 book On the Origin of Species promulgat- DAVID R. BROUSELL
+1 212-629-1510
ed the theory of natural selection, naturally comes to mind. “It is not the strongest of dbrousell@thomaspublishing.com
the species that survives, nor the most intelligent. It is the one that is most adaptable to ...........................
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change,” Darwin reportedly said. This law of nature, if you will, has been at the center of Editorial
thinking in manufacturing for many years, but it has come into sharp relief recently as market EXECUTIVE EDITOR
PAUL TATE
forces such as globalization, an aging workforce, changing customer demographics and expec- +44 (0) 7973 510-458
ptate@thomaspublishing.com
tations, and new, pervasive technologies alter
the industrial landscape. When you speak to turing at many levels. In “It’s About Time,” EXECUTIVE EDITOR
JEFF MOAD
manufacturing executives these days, there University of Wisconsin-Madison Emeritus +1 510-531-3456
is an urgency and immediacy in their voices Professor Rajan Suri discusses what the prin- jmoad@thomaspublishing.com
about change, and change from many angles. ciples of Quick Response Manufacturing can MANAGING EDITOR
JAY E. BLICKSTEIN
The language of change used by executives do to reduce lead times and trim costs. In our +1 212-629-1540
today underscores how critical finding new Dialogue interview, Executive Editor Paul jblickstein@thomaspublishing.com
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ways of doing things has become. Whether Tate talks with Alan Foster of British auto-
Columnist
they speak about “flexibility,” agility,” “resil- maker McLaren about the company’s new
PIERFRANCESCO MANENTI
iency,” or simply greater “speed,” the message “flexible” production facility for its latest lux- IDC Manufacturing Insights
is the same —manufacturing has to adapt. ury sports car. Milan, Italy
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This issue of the Journal is devoted to ex- In addition to the package of articles in
Design & Production
ploring the idea of adaptation in manufac- this issue on the theme of adaptability, we
DESIGN DIRECTOR
are publishing what we think is a ground- BEST & CO.
robert@rbestdesign.com
breaking article on the manufacturing em-
ployment picture, an issue whose urgency is PRODUCTION DIRECTOR
REGGIE RIOS
second to none. In “The Multiplier Effect: +1 212-629-1520
There Are More Manufacturing-Related rrios@thomaspublishing.com
Jobs Than You Think,” Rockwell Automa- CROSS-MEDIA PRODUCTION
tion Chairman and CEO Keith D. Nosbusch SPECIALIST
PHILLIP GALLOF
and Director of Corporate Communica- +1 212-629-1503
pgallof@thomaspublishing.com
tions John A. Bernaden argue that the em-
brace of smart manufacturing techniques WEB DESIGNER
PAUL POLICARPIO
can create millions of new indirect jobs sup- +1 212-629-1511
ppolicarpio@thomaspublishing.com
porting manufacturing and, in the process,
change the image of the industry itself.
Continue the discussion about adaptabili-
ty at www.manufacturing-executive.com. M
W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M
ME Global Leadership Community
@RB03_EdLetter_v6.indd 1 2/15/12 10:23 AM
5. “It is not the strongest who survive
but those who are most adaptable.”
CHARLES DARWIN
TAKE YOUR LEADERSHIP SKILLS TO A
GAME-CHANGING LEVEL
Succeeding in our rapidly shifting manufacturing landscape requires the
ability to adapt your strategy, your organization, and your people with speed
and agility. The Manufacturing Leadership Council’s Adaptive Leadership
Program offers you the knowledge necessary to make it happen.
Open exclusively to Platinum-level Members of the Council, the program is
offered in cooperation with Cambridge Leadership Associates (CLA) – an
international leadership development practice founded in 2003 by Harvard
University faculty Ron Heifetz and Marty Linsky. CLA is known worldwide
for helping executives and top teams perform at their peak, to drive results
in constantly changing environments.
Sign up for the Council’s Adaptive Leadership Program and discover why
companies such as Microsoft, Cisco Systems, Eli Lilly, IBM, Johnson &
Johnson, Merck, Pfizer, and Shell Oil have made Adaptive Leadership part
of their competitive advantage.
To learn more, please contact a Council representative at
(212) 629-2164 or 888-280-6794, or access our
“On Demand” Adaptive Leadership Webinar at
manufacturingleadershipcouncil.com/programs
Helping to Define and Shape a Better Future for Manufacturers Worldwide
Manufacturing Leadership Council, 5 Penn Plaza, 8th Floor, New York, NY 10001• 212-629-2164 or 888-280-6794
CLA_March2012.indd 1 2/13/12 5:13 PM
6. MANUFACTURING
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The following extracts are taken from among the best blogs on the global Manufac-
turing Executive Leadership Community Website. You can join in, read more, and
respond with your own point of view at www.manufacturing-executive.com.
N E X T G E N E RAT I O N
L E A D E R S H I P A N D C U LT U R E
that understands why and how to edges of their applications. They
Manufacturing embrace change—never flinching are busy adding things like mo-
Leadership: Will from the challenges ahead and al- bility, social networking, “big
Adaptability Rule ways thinking differently. Manu- data”-capable analytics, and
The Future? facturing Executive feels that role-based user interfaces to their
Extract: Are today’s adaptive leadership approaches enterprise application suites. The
manufacturing leaders are so critical to the future of man- implication from the vendors is
as adaptable as their ufacturing that we have launched a that there’s not much need to in-
factories and supply special course for Manufacturing novate on the core business func-
chains? Not yet, per- Leadership Council Members. tionality of these applications,
Paul Tate
haps. But they need to Find out more by listening to our that customer requirements at
be. Adaptive leadership goes far free introductory Webinar, “Lead- the core are static, and that those
beyond operational issues. It en- ing Adaptive Change in Manufac- requirements have largely been
compasses broader but increasing- turing,” via the Manufacturing met. But the stories I hear from
ly essential leadership qualities for Executive Website, www.manu- manufacturers paint a different
building an open and flexible vi- facturing-executive.com. picture. Manufacturers are still
sion of the future; the personal Paul Tate is Executive Editor of Manu- keenly interested in the core func-
facturing Executive.
skills to inspire people to think dif- Read the full blog: http://www.manufac-
tionality of their enterprise soft-
ferently about problems and obsta- turing-executive.com/community/leader- ware. They want applications that,
ship_dialogues/next_generation_lead-
cles; and the professional ambition ership_and_culture/blog//// out of the box, support the busi-
to drive extensive cultural change manufacturing-leadership-will-adaptability- ness processes that are essential
rule-the-future
across borders, functions, and gen- and unique to their business and
erations. There is no “business as THE ADAPTIVE ORGANIZATION their vertical industry. And they
usual” anymore. That’s the last ref- Innovation at the Core want applications with core func-
uge of the unenlightened and the Extract: For several tionality that keeps up with what,
uninformed. The manufacturing years now, I’ve no- in many vertical industries, is a very
world and the manufacturing ticed a disconnect of dynamic set of requirements.
world’s customers have moved on. sorts between manu- Think about it. As pharmaceutical
Exceptional leadership in the de- facturers and the manufacturers embrace concepts
Jeff Moad
cades ahead will be characterized companies that pro- like continuous manufacturing,
by manufacturing leaders who vide the ERP and other software and as automotive OEMs attempt
have learned to adapt and thrive in suites on which most businesses to move toward mass customiza-
challenging times. People with a run. Increasingly, the software tion, the way they do everything
clarity of vision who can create a vendors like to talk about the in- from sourcing materials to plan-
mindset across their organizations novations they are bringing to the ning production is changing dra-
W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M
ME Global Leadership Community
@RB03_Blogs_v2.indd 6 2/13/12 4:11 PM
7. Best Blogs / HotTopics
matically. They need their enter- with dirt floors. In China, where small changes or disruptions at
prise software to support those whole communities are being the far end of the supply chain
changes. torn down, reconfigured, and re- (end-user, retailer) to multiply as
Jeff Moad is Executive Editor of Manu- built, I have come across facilities they move up through the chain
facturing Executive. that look like they are in a war to become major fluctuations
Read the full blog: http://www.manufac-
turing-executive.com/community/leader- zone, with neighboring walls torn for suppliers. “We have found
ship_dialogues/the_adaptive_organization/
blog/2012/01/12/innovation-at-the-core
down or streets that end and start that the more information we
randomly. When you have a focus can share with our partners, the
G lo b a l Va l u e C h a i n O p t i m i z at i o n on best price with highest quality more costs we are able to drive
The Global View: Don’t and timely delivery, you then out of the system, so we both
Judge Me by My Dirt have to decide what your priority gain,” says Scott Craig, director
Floors
is regarding the appearance of of replenishment for Hannaford
Extract: In the 1980s, plants used by suppliers and con- Brothers regional supermarkets.
on one of my first trips tractors. Although I know that There are many ways to employ
to Asia as an engineer, quality and appearance are often this strategy to improve supply
I was in Japan visiting aligned, and while I appreciate chain performance. Sharing
Everette
some of the plants the teachings and lessons of Lean your production schedule with
Phillips that make Seiko manufacturing, I want to empha- trusted suppliers, for example,
watch components. Part of my size that floor type does not al- allows them to better coordinate
job was to help transfer precision ways correlate to quality of out- their own production to meet
watch manufacturing equipment put—especially in Asia. your needs. Collaborating with
and adapt it to new markets ori- Everette Phillips is CEO and president of distributors and customers to
ented toward custom equipment Global Manufacturing Network.
develop better forecasts is an-
Read the full blog: http://www.manufacturing-
for making calculators, electron- executive.com/community/leadership_dia- other example. This all sounds
ic auto parts, and medical equip- logues/global_value_chain_optimization/
good in theory, but many com-
blog/2012/01/18/the-global-view-dont-judge-
ment. When we later went to visit me-by-my-dirt-floors panies have been reluctant to
the machine shop in Tokyo, I was take steps in this direction be-
expecting a surgically clean facili- G lo b a l Va l u e C h a i n O p t i m i z at i o n cause they don’t have the kind of
ty not unlike some of the Seiko Data Sharing: working relationship with sup-
Instruments facilities where I had It’s All About Trust
pliers that allows them to feel
been working. As we entered the Extract: It’s a basic te- comfortable sharing this de-
building, I saw that the floors net of faith in supply tailed information about their
were dirt. There were many CNC chain circles that data business. Until a sufficient level
machines operating, each sitting can substitute for in- of trust and partnership is estab-
on its own concrete pedestal. I ventory, and that the lished between a company and
Mark
had seen concrete floors, and Symonds best way to improve its suppliers, the benefits of data
wooden floors in GM’s massive supply chain velocity, efficiency, sharing will remain out of reach.
transmission plant in Michigan and performance is by sharing Mark Symonds is President and CEO
as well as in New England manu- data throughout the supply of Plex Systems and a member of the
Manufacturing Leadership Council.
facturing centers built in convert- chain. As an example, providing Read the full blog: http://www.manufacturing-
ed multistory mills. But this was suppliers with access to point- executive.com/community/leadership_dia-
logues/global_value_chain_optimization/
the first facility where I had seen of-sale data is seen as the defini- blog/2011/12/16/data-sharing-it-s-all-about-
dirt floors. Today, as I travel in tive cure for the so-called “bull- trust
Asia, I still come across facilities whip effect”—the tendency for
www. manu factu r ing - e x ecuti v e . c o m
ME Global Leadership Community
@RB03_Blogs_v2.indd 7 2/14/12 9:29 AM
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Opinion / Jeff Lawrence / Nadir Ahmad
Developing an Adaptive Culture:
The Time Is Now
Does your manufacturing company have the
collaborative organizational structure, flexible
technology, and system-wide empowerment to
adapt successfully to rapid change?
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W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M
ME Global Leadership Community
@RB03_CLA_v6.indd 8 2/16/12 9:23 AM
9. T
HE URGENT NEED FOR MANUFACTURERS TO BECOME
more adaptive in their organizations has been thrust front-and-cen-
ter onto the world stage in recent months. There’s a lot at stake. At ....................
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the World Economic Forum in Davos, Switzerland, earlier this year, ....................
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the Boston Consulting Group Strategy Institute released the results
of a special study that found adaptive organizations significantly
o utperform industry peers in terms of
economic and financial gains.
In January, Fast Company magazine ran an The Challenge of Adaptation
article, “This Is Generation Flux,” stressing For a manufacturing enterprise, the chal-
the importance of individual adaptability to lenge of adaptation is particularly acute. Jeff Lawrence is
thrive in today’s challenging job market. Manufacturing has traditionally been a principal at
Even President Obama, in his latest State capital-intensive, making it more difficult Cambridge Lead-
of the Union address, spoke about the im- for companies to alter course quickly than ership Associates
(CLA), an interna-
portance of adaptation and the trajectory organizations in, for example, the finan-
tional leadership
the U.S. auto industry has followed over the cial-services sector. However, the qualities development
last three years. that are necessary for adaptive capacity are practice based in
During the recent recession, some ob- more cultural than material. Therefore, in New York.
servers advocated that certain automakers theory, any manufacturing organization
should be left to whatever fate the market can prepare itself and its people with the
dictated. Such a course of action would skills that are necessary.
have put a million jobs at stake. Since then, Adaptation is often difficult because it re-
not only has the U.S. retained those million quires organizations to constantly assess
jobs, but 160,000 more jobs have been creat- what, of all the things they are doing, is con-
ed. Meanwhile, Chrysler has grown faster in tributing most to their success. What values Nadir Ahmad is a
the U.S. than any other major car company, and practices are so core to who they are, and consultant at Cam-
and General Motors is the world’s number- are so much of their essence, that they must be bridge Leadership
one automaker. How did workers and auto- brought forward for the future? Correspond- Associates.
makers in a seemingly intractable stalemate ingly, what values and practices that have
adapt in such a way to settle their differenc- helped them achieve past success, but are no
es? And what enabled the entire U.S. auto .....................................
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such a drastic turnaround?
All the indicators point to the need
Organizations, as well as groups
for companies working in the increas- of people, are more resilient and
ingly dynamic manufacturing industry to responsive when they can access
Illustration: Veer/Pedro
learn how to quickly sense and respond to the entire breadth of collective
change, and to develop a greater ability to
anticipate the changes now required for fu- capacity.
ture success.
W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M
ME Global Leadership Community
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10. MANUFACTURING
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ing about the strengths and resources that
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and responsive when they can access the entire
longer viable, must now be left behind? breadth of collective capacity. In less adaptive
The U.S. auto industry is a vivid example. organizations, the awareness and connections
For years, the industry ignored the warning are nonexistent or unknown. So, the question
signals that the world was looking for a dif- to reflect on for your organization is whether
ferent value proposition than big, gas-guz- people can or cannot make these connections.
zling cars. The market has now returned af- At the individual level, to what extent are
ter the recession, but has been transformed people rewarded for collaboration versus indi-
by more fuel-efficient technologies and en- vidual distinction? At the organization level,
vironmentally aware global consumers. to what extent do people act from the perspec-
Similarly, many of the big pharmaceuticals tive, and for the betterment, of the whole orga-
nization, as opposed to worrying about pro-
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tecting their individual silos?
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.............................................. 2. Elephants on the Table: There’s an age-
The qualities necessary for adaptive old cliché about unresolved family issues:
capacity are more cultural than the family gets together, Uncle Charlie
gets drunk, but nobody talks about Uncle
material. In theory, any manufacturing Charlie’s drinking because it’s too difficult
group can prepare itself and its and painful. That’s what’s called an “el-
ephant in the room.” Imagine that those
people with the necessary skills. elephants are standing on your conference
or meeting-room table, and ask yourself, do
companies could not wean themselves from the important, difficult conversations ever
their tried-and-trusted formula for block- get from inside people’s heads or around
buster success. Advances in the production the coffee machine to the meeting room it-
of generic drugs began to cut deeply into self ? Are there structures, incentives, and/
their profits, and the world began to ques- or support for people to speak the “un-
tion whether it was morally tolerable to have speakable”? Does your team take those
products that could make people healthy but on in meetings, or is there a “meeting after
not make them readily available at prices that the meeting” syndrome where the real stuff
were closer to the cost of making them, rather only gets discussed and decided afterward?
than the cost of inventing them. 3. Institutional Reflection and Continu-
So, after helping hundreds of organi- ous Learning: As the world changes around
zations like these adapt, we believe that an us, what we do, and how we do it, has to
adaptive organization requires the presence change, too. Change is hard, so it is impor-
of five core qualities to succeed. As you read tant to understand what needs to change
this, rate your own company culture on the and why, and to ensure that we have cho-
presence—or absence —of each element. sen the right changes. This is particularly
1. Shared Responsibility: Adaptive cultures important where an organization is trying
are able to respond to changes in complex to make some significant changes—even if
ways. Doing this requires a deep understand- they seem minor at the time—in how they
W W W. M A N U FA C T U R I N G - E X E C U T I V E . C O M
ME Global Leadership Community
@RB03_CLA_v6.indd 10 2/15/12 10:29 AM
11. operate, how they come together, how they
take on problems, or how they deal with
their key constituents. Does the organiza-
tion dedicate its support, and individual
and collective time, for reflecting on experi-
ence and learning from others? To what ex-
tent does the organization commit time and
space and skill to getting a true perspective What has worked up to now won’t
on its own work? necessarily take the company forward
4. Sensitivity to Authority: Organizations
with a high sensitivity to authority depend in the future. The world changes, and
entirely on that authority for direction, pro- in order to thrive, individuals have to
tection, and order. In a way, that describes evaluate what is working and what isn’t.
all organizations. Adaptive organizations ..........................................................
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also rely on individuals within the company ..........................................................
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to interrupt unproductive patterns, name
elephants, and create new ways of work- there to learn and grow, or do they assume
ing. But the authority figure rarely has all they should put their head down and do ex-
the answers, nor always understands the actly what they did in their last assignment?
competing commitments or the view from As you reflect on the rating you gave your
the trenches necessary to solve the prob- organization, what are the stories that came
lem. Creating an environment where both to your mind? What is your assessment saying
authority and leadership co-exist in the about your organization or team? Do individ-
service of progress is what makes organi- uals and teams in your organization succeed
zations more adaptable. To what extent are because of the culture—or in spite of it? What
people in the organization valued for their would it take to move the adaptability ratings
own judgment, rather than their capac- of the organization to a higher level?
ity for divining the preference of the boss? Make no mistake, the rate of change in
That is, which question do people tend to the manufacturing world will only get faster.
ask when they are uncertain: “What would The key to thriving in that ever-changing
my boss do now?” or “What’s best for the world will be to build adaptive organizations
organization now?” that can learn their way toward a more pro-
5. Customized Professional Development: ductive future. M
What has worked for the organization and ..........................................
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the individual up to now won’t necessar- ..........................................
ily take the company forward in the future. Leading Adaptive Change in Manufacturing
The world changes, and in order to thrive, Learn how to adapt and thrive in challenging times
individuals and organizations have to › Find out more about Manufacturing Executive’s special Leading Adaptive Change
in Manufacturing program, exclusively designed for Manufacturing Leadership
evaluate what is working and what isn’t. If Council Members.
something isn’t working, how do the peo- › Listen to the introductory Webinar with Cambridge Leadership Associates at
http://www.manufacturing-executive.com/community/webinar_adaptive_leadership.
ple in your organization become aware of
› Book your place on the 2012 Leading Adaptive Change in Manufacturing program.
it, and prepare to do something different? › Call 888-280-6794 or send e-mail to executiveteam@manufacturingleadership-
When someone is given a new assignment, council.com.
can they be assured they have been placed
www. ma n u fact u r i n g - e x e c u ti v e . com
ME Global Leadership Community
@RB03_CLA_v6.indd 11 2/16/12 9:24 AM
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By Rajan Suri
@RB03_Suri_v4.indd 1 2/16/12 9:48 AM
13. For makers of custom and low-volume products, Lean and traditional cost-based
improvement methods may not be the best fit. Instead, an approach that optimizes
agility and dramatically reduces lead times across the enterprise is the way to go.
@RB03_Suri_v4.indd 2 2/16/12 9:48 AM
14. MANUFACTURING
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rue or false: U.S. manufacturing jobs will continue to be lost to China
and other lower-cost countries because we simply can’t compete with
their labor costs. False. Typically, only 7% of the final price of your
made-in-the-USA product is due to direct labor. So, what accounts for
the remaining 93%? Your organization. Or more precisely, the organi-
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.................... terprise and your supply chain. For certain ume or custom manufacturing.
types of companies and markets, an agile The Center for Quick Response Manu-
organization that responds quickly to or- facturing, along with more than 200 part-
ders, changes, and other events will not only ner companies, has developed during the
satisfy customers with short lead times but past 15 years an alternative strategy for
also take a huge chunk out of the remaining reducing lead times and costs, particularly
93% of costs. The result is both quick re- for manufacturers of low-volume and cus-
Rajan Suri is sponse to customer demand and the ability tom products. Using the principles of what
Emeritus Professor to compete with any factory, making prod- we call Quick Response Manufacturing
and Founding Di- ucts anywhere in the world. (QRM), our partner companies have re-
rector of the Center
for Quick Response
For low-volume or custom-engineered duced lead times by more than 80%. At the
Manufacturing at products, neither traditional management same time, they have realized cost reduc-
the University of methods nor the newer Lean approaches tions of 15%-25%, outweighing the labor-
Wisconsin-Madi- provide the best cost-reduction strategy. Tra- cost advantages of low-wage countries.
son. His latest book
on QRM is It’s About
ditional, cost-based methods optimize for
Time (Productivity economies of scale. But these methods also Thinking Beyond
Lean and Six Sigma
Press, ). result in long lead times in the supply chain
T
and factory. These lead times result in added he core tools in Lean such as takt
costs of planning, forecasting, expediting, time and level scheduling are de-
work-in-process, and finished-goods inven- signed to eliminate variability in
Previous spread, Veer/ Orly
tories; lost sales; obsolescence; and more. operations. Six Sigma also targets reduction
Similarly, because Lean methods were of variability. While this sounds good, the
designed for high-volume, repetitive trouble with these approaches—and why we
manufacturing environments, many Lean need to think beyond them—is that manage-
tools break down when applied to low-vol- ment literature has not clarified the issue of
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Traditional, cost-based methods
optimize for economies of scale. But
these methods also result in long lead
times in the supply chain and factory.
@RB03_Suri_v4.indd 3 2/9/12 1:57 PM
