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Posted on 5/15/2019

An Over-Fixation on Lean Manufacturing is Detrimental to Business Success

Gordon Stannis

Ask most manufacturers if they want to be efficient or effective and they will likely answer: Yes. It’s not an obtuse or vague answer. They want to be both. And the well-worn path to success (effectiveness) as they know it comes by being efficient.

Who can blame them? After decades of applying a lean manufacturing methodology, there’s little if any margin to pause and think differently. Eliminating waste, keeping things moving, just-in-time delivery, killing wait times – these are the preached and beloved tenets of lean. And for a long time it has worked – as long as manufacturing could be about processes and not new, innovative products. 

Today, process efficiency is not enough. It can no longer rule at the expense of forgoing the development of innovative products that will delight customers – in essence, effectiveness. Customer feedback and design are no longer luxuries or line items, they are essential if companies intend to compete and rapidly changing landscape. And they are at the heart of human-centered design (HCD), a process that regularly ushers in groundbreaking innovations.  

A “both-and” mindset is needed

Why are financial advisors so headstrong about creating balanced portfolios? Simple: to mitigate their clients’ risk and to avoid their wrath when segments of the financial market plummet. Yet what we see time and time again is financial wagering among large and mid-sized companies that does just the opposite by forgoing balance. Ironically, this decision-making comes from leadership, many of whom have finance backgrounds and are steeped in the ongoing financial analysis of the company. 

Too many manufacturers, including many here in our Midwest region, are hedging nearly all their bets on lean manufacturing. They over-fixated on lean to help them win and grow market share (imagine a 95/5 split of lean to innovation). That leaves little room for innovation and developing new products that people want and, with confirmed research, will gladly pay for. This is a grave lack of balance with an unhealthy risk load of one dimensional thinking. Present this distribution strategy to your financial advisor and he or she will likely drop you for sake of their own reputation.    

But what if those same companies took the pressure out of winning with lean and applied a more balanced approach – 50/50 with product innovation? Think both lean principles and innovation principles through human-centered design – a proven process that isn’t new, just foreign to many in manufacturing because of an allegiance to lean’s efficiency. With HCD, customers are at the center of a creative, solutions-based approach giving insight on where to go with future products. It is the opposite of a cost-based, functional-driven product development. But can manufacturers actually retain processes for efficiency while still creating products that will be more desired by customers and profitable for manufacturers? 

Prove it: turning skeptics into believers

When an Original Equipment Manufacturer (OEM) approached us for help with a new staking tool for welding plastic products, it wasn’t because they were bought in on human-centered design. Rather, just like many others we’ve worked with over the years, they couldn’t afford to waste money and miss the mark – again. 

By engineering standards, their product was raw but functional. Perfectly workable. But people don’t seek out or pay a premium for functional products. Engineers and designers have fundamentally different approaches to product development, the former being conditioned by lean principles to remove anything that looks like cost or waste for the sake of efficiency. While the reluctance to push beyond product functionality to get to a level of desirability is extremely high, those that do, get rewarded.  

Our human-centered design approach here, and with any client, is to take the raw and functional product and show the many different ways to design the original idea with the needed characteristics and different looks. The job of the design team is to reimagine the product in ways the engineer cannot imagine – and then work collaboratively to select the best version for customer feedback. 

Using a Visual Research Tool (VRT) we engaged the OEM’s direct customers one-on-one where they could comfortably share with a third party what they thought of the product. Unlike focus groups or the need to get a representative sample of all customers to glean statistically valid results, we learn more about how a product can delight actual customers in as few as 10 interviews. 

When the OEM heard their customers’ feedback and experienced the design process, innovation became real and transformation had begun. By way of design they saw a blind spot, in essence a huge risk, got reduced.  Now the idea of having a design-minded approach is as important as having a financial-minded approach. You might even call it a 50/50 approach. 

The quest to awaken the Midwest’s sleeping giants 

The Midwest is populated with manufacturers just like this OEM. Chances are many of them will need to feel the pain of imbalance or fail to evolve a new product to the level of desirability before finding solid footing between lean and innovation. Industry 4.0 has such potential for these “sleeping giants” in the Midwest who are yet to shake up their thinking and take action. 

Investing the time to explore a range of solutions can seem futile to manufacturers that believe their first product version is the best version. Experience tells us everything benefits from revision and iteration to make better products. Further, the counterpoints are hard to ignore even when efficiency is the primary motivation:

  • Time and accuracy is money. When product development takes four to five years and manufacturers claim they don’t have time to invest in a different approach, we counter with HCD processes that cut that timetable in half while knowing the product will be successful. 
  • A brilliant solution to the wrong problems is demoralizing. When that happens, nothing goes into production, no profits are realized, and a year or two of time is wasted. Knowing the real problem is at the heart of the VRT, which yields a customized solution through a human-centered design approach. . 
  • Add costs that make strategic sense. The manufacturer’s natural reaction is to strip out specialness for the purpose of cost containment. We often advocate for adding costs. When .50 cents of cost can add $10 of profit because of desirability, creating a product that isn’t unique suddenly becomes inefficient and ineffective. 

The most innovative companies, the ones we all read about and admire, don’t have a special playbook. They have a balanced approach to being innovative and efficient. It’s what makes them successful – and it’s the same approach that can fuel growth for companies right here in our region, right now.

About the Author

Gordon Stannis | Twisthink

Gordon Stannis is the Director of Design and Strategy at Twisthink where he grows existing client relationships, leads a talented internal team of Industrial Designers and plans and leads collaborative Design and Strategy projects. One of Gordon’s greatest accomplishments is Co-Creating Twisthink itself based on an ongoing belief that there was a better way to create and deliver value to corporate clients battling against the relentless wave action of commoditization. Previously, Gordon held lead design positions at Herman Miller, BMW Group and Prince / Johnson Controls.

 
 

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Molly E. Green

Marsh & McLennan Agency

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