A Lean Challenge in Canada
Here’s yet another article about lean with the “Lean and mean” headline. As you know if you’re a regular reader, I hate the phrase. There’s nothing “mean” about lean methods and the lean management approach. I think it’s just lazy journalism to latch onto a phrase like that.
Anyway, here’s a case study of a Canadian furniture manufacturer, SeatPly, who is fighting the battle to become lean and they’re also fighting competition from China and Malaysia.
Pre-lean, the company suffered from some of the typical management maladies:
Afeyan, president of Seatply Products Inc., admits there was a day not so long ago when it would have been “panic time” if he walked into this tennis-court-size section of the factory and saw red lights unilluminated. The machines weren’t working! Production was being lost!
“I wanted all the machines working all the time,”
Wanting the machines running all the time is classic “mass production” thinking. As they point out later in the article, this adds a lot of cost — it’s the “waste of overproduction.” Building product that customers don’t want might make local unit costs look low from an accounting standpoint, but total cost is increased as you havwe to manage all of that inventory (paying employees to move it, track it, count it, etc.).
The company is lucky that management had the “lean lightbulb” go off. Lean wasn’t about making their people work harder, it’s about a new way of managing things.
SeatPly’s success with lean is documented in the article, some great results:
In the case of Seatply, changing the set-up of the factory made work flow more smoothly. Inventory was slashed and enough floor space was saved to allow the company to rent out 10,000 square feet it no longer needs.
Afeyan, 46, said the lean-manufacturing changes have made his factory 20 per cent more efficient and generated cost savings in the hundreds of thousands of dollars.
But, even with the lean success and improvements, SeatPly still feels pressure from customers to move production to Asia.
Last year, Seatply began pressing some of its plywood in Malaysia. It helped a Malaysian partner to purchase the right equipment and trained the firm on how to manufacture curved plywood to the Canadian company’s specifications. Now, 25 per cent of its plywood is made in Malaysia and shipped to the St. Laurent and Jeffersonville factories for machining and finishing into chair seats and backs.
I wonder how that will work them. The supply chain from Malaysia is long and slow and some delays and problems will be inevitable. I wonder how SeatPly’s customers will respond to a shipment delay that’s caused by Malaysia delays? Will they insist that SeatPly get a more responsive, more “lean” supply chain by bringing some production back to Canada, or will they give up on them entirely, insisting that ALL production be moved to Asia?
I’m guessing that SeatPly needs to not only educate their employees, but also their customers.