I received an email newsletter from APICS the other day, an email I question the central premise of. The email headline says:
“A Lean GM?”
At least they put that in quotes. Maybe sometimes an editor does that to not take as strong of a stand as they might like (e.g., “Is Jack Welch a Turkey?“).
The author, Douglas R. Kelly, editor of APICS Magazine, says:
GM announced October 24 that it had posted a third-quarter operating profit nearly double what Wall Street had expected, prompting most analysts to echo Wagoner's claim that the company's turnaround efforts are beginning to bear fruit. “Our third quarter results again reflect significant progress in our fast-paced initiatives to turn around our business and create a company that is leaner, faster, and positioned for long-term sustainable growth,” Wagoner said in a statement.
The word “leaner” caught my attention when I read of the earnings news, because it's descriptive of an organization that is on the road to greater efficiencies and faster time to market. GM has been a leader in developing and implementing lean methodologies for more than 15 years.
The word “leaner” caught my attention because it makes me think, “Huh? GM is lean?” It really caught my eye that Kelly then went on to write that GM is a “leader” in implementing lean. What?
One issue I have with Kelly's analysis is that he appears to take Wagoner's use of the word “leaner” to mean “we are a more lean company, in the sense of lean manufacturing and the Toyota Production System.” I'd argue that Wagoner, as a finance guy, most likely meant “lean” as in “we are now a smaller company.” That's usually what finance guys and Wall Street types mean when they say “lean” — they're hardly ever referring to Lean Thinking or the elimination of waste. They usually mean they've eliminated jobs.
One of the problems with the word “lean” is the negative connotations — “lean and mean” being one, and the idea of “lean” meaning that you take things away (such as inventory, etc.). Lean is more than that, which is one reason why the Gemba Blog is avoiding the word “lean” altogether this month.
Since the newsletter isn't online (or I can't find it), I will post the full text in the comments area. I think it's telling that Kelly's examples of GM using lean are the NUMMI plant (a factory that GM hasn't really learned from and used to transform other plants) and a story from Saturn eliminating waste TEN years ago.
GM has adapted the Toyota Production System, creating what GM personnel call the Global Manufacturing System (GMS). The Cadillac division, in particular, has achieved good results using GMS methodologies in the quality and design areas.
I've been away from GM too long to know — is the “GMS” anything at all like TPS? Is it at all helpful or something that sounds good??
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