Lean and Stock Analysts


Two Picks For EMS Industry – Forbes.com

Following up on the discussion of “Shingo Investing” and the Industry Week Best Plants analysis, here is an article that touts the stock of Flextronics, a contract manufacturer. Flextronics has been mentioned here for its lean efforts.

A stock analyst quoted in the article says:

“We believe that lean manufacturing is helping to maintain inventory levels for EMS companies,” the analyst said. “We note that overall EMS inventory days declined less than normal last quarter, and is something we are keeping a close eye on.”

I guess its easy for analysts to solely relate lean to inventory, since inventory is easily measured and tracked or compared. It's harder for analysts to measure other lean concepts or management philosophies. To me, it seems like its too easy for companies to play games with inventory levels in an effort to “look lean,” but it sounds like Flextronics is trying to do lean the right way, even if Wall St. doesn't understand.

Should we try to do a better job of informing Wall St. that lean is about more than cutting heads and cutting inventory? Is that a hopeless battle? What do you think?

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