Lean and Outsourcing

By Mark Edmondson

Bill Waddell’s post on Evolving Excellence makes a humorous yet tragic point about how lean is too often confused with outsourcing. Prepare to laugh out loud and cry.

Real story: This year our team visited an $800 million mid-west manufacturer who told us they had “already implemented lean on the plant floor.” When we walked their plant they showed us the receiving dock loaded with inventory. From there, fork lifts pushed inventory to “final assembly”. They called the pallets “kanbans” yet no pull system existed. It turns out that their “lean initiative” boiled down to outsourcing their sub-assembly operations, leaving only final assembly and packaging in-house- and resulting in a major layoff.

If you stepped back and looked at the whole value stream, no muda was eliminated. Jobs were merely shifted from their plant (union) to the supplier (non-union) resulting in added complexity with transportation, longer cycle times, and worsened labor relations.

My Affiliate finally asked the question: “When you say ‘lean’, does this mean the same thing as ‘outsourcing’ to you? Sadly, the answer was yes.

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Mark Edmondson

Mark Edmondson is passionate about achieving rapid, breakthrough results during a company’s lean transformation. With 30 years of front-line experience while working with over 80 companies, Mr. Edmondson developed a philosophy of helping companies create a culture that sustains operational excellence through low cost yet transformative changes.

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