By August 14, 2008 5 Comments Read More →

Lean is a Rumor, in China?

IndustryWeek : Eye On China:

Interesting story here in IndustryWeek, generally talking about the state of manufacturing in China, but turning its eye to Lean:

When it comes to the current state of Chinese manufacturing efficiency, David Hemmings, president and CEO of consulting firm Pacific Rim Alliance, says, ‘Chinese companies, when compared to Western productivity numbers, are still very inefficient despite a great workforce ethic. It doesn’t matter if wages are only $1.25 an hour if there are 2,000 extra people working to make up for their inefficiencies.’

That’s the typical argument about why China “doesn’t need” Lean. But labor savings is only ONE PART of the Lean story. It’s frustrating when companies obsess over labor cost instead of thinking about how to increase value or how to unleash the creativity in their workforce. Of course, conventional wisdom says Chinese workers are compliant… so can you achieve Lean employee engagement in China? I’d assume that you could, but who has experience with this first hand?

From Hemmings’ perspective, lean manufacturing is mostly a rumor in China. ‘Chinese-run companies don’t have lean manufacturing, and workers won’t stop production lines if they see something’s wrong because the social and education system is based on Confucianism — which emphasizes loyalty, harmony and obedience, not questioning.’

Ah, obedience. That’s exactly what many top-down command-and-control managers and executives want. I wrote about that three years ago, when an article appeared in the WSJ saying that many companies are “Soviet” in nature. Lean leaders DO want employees who question things, coming up with ideas, and innovating.

As he sees it, the Chinese government does not encourage lean manufacturing because ‘it wants to spread the wealth and create more jobs, not less. Additionally, it wants companies to take on cost and the burden of social responsibility.’ The lack of lean manufacturing, he adds, is one of the reasons why only three out of the top 10 Chinese car companies are local domestic producers.

This seems backwards. If you want the company to create more jobs, the way to be successful and sustainable is to be Lean. Look at the huge market there — use Lean, get more efficient, and then GROW. That is a possible strategy for Lean, right? Lean and productivity improvement create wealth. Having a Chinese economy that’s a “jobs bank” won’t be good for them in a long run. What do you think?


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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5 Comments on "Lean is a Rumor, in China?"

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  1. Jens says:

    I’ve never been to China, but I will soon go there, to teach Lean actually. We have affiliates in China doing Lean production successfully and I will go there to teach them about Lean in business processes.

    But I’ve been to India where I observed a similar phenomena as you describe. One example (of many) was when we arrived at the office building there were 4 elevators leading up to the offices. In each elevator a young Indian guy was standing all day long pushing the buttons for you. Completely unthinkable were I come from and not very Lean, but it’s clearly the company taking a social responsibility. The alternative would be to send them back to misery.

    Where you and I come from the social security nets look different, either it is financed through governmental taxes or through donations from people with excesses.

    I think that is what the Chinese government is doing, encouraging companies to take a social responsibility and spreading the wealth to uneducated masses in order to lift the lower layers of society so they too can be an active part of the potentially huge market.

    And since both India and China are outgrowing western countries, someone is doing something right.

    I think we can combine a Lean mindset with social responsibility. Actually I think it’s necessary.

  2. Anonymous says:

    This is another example of the need to consider culture when talking about Lean. Being ideological about Lean can often lead to frustration, and fails to consider other important business and political conditions. To expect Lean to be effectively transferrabble to all businesses in all corners of the earth is foolhardy. I’d be interested in hearing some opinions of the business conditions, political conditions, and industrial maturity required to enable Lean to be the preferred operations strategy.

  3. Industrial Guru says:

    Interesting article. The obedience and culture within the workplace are huge hurdles for lean and not something that can be changed with the simple declaration of a new policy by management.

  4. Jon Miller says:

    Lean is not a rumor in China.

    Quality, lead time, inventory, operating expenses and even productivity are areas of interest and concern by the Chinese government and private firms.

    Chinese people have epic and boisterous disagreements and discussions. However, open challenge to authority in a way that makes authority lose face is rare. That is not necessarily incompatible with lean culture.

    The interesting thing about rumors is that you can hear them with your ears but you not see them with your eyes.

  5. Chad Chad
    Twitter:
    says:

    I’m gonna semi-sorta hijack this comment thread for a similar line of thinking in a different industry. I’ll also share these thoughts on the most recent Lean Blog entry about China.

    There is a parallel between the sports industry and operations in China. The mindset of cheap labor and “lean = cost cutting” exists in sports as well. I’ve worked seven straight days in a homestand for a minor league team, from 8 a.m. to 11 p.m. each day. If proper labor and safety practices are not adhered to, operators won’t jump up to create a fuss because a) “sports” is a sexy industry and you’re lucky to be in it at all, and b) if you create a fuss you’ll be labeled a pariah and will have an even BIGGER hill to climb to get back into the industry. For the front line workers in concession stands, obedience is key if you want to last.

    (The worker strife in sports is nothing compared to what occurs in China, and it is certainly a societal and economic problem that will require many generations to fully overcome. I merely wanted to point out the parallel.)

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