Run, Forrest, Run

Now, the company gets purchased by a larger industrial group. After the dust settles, corporate decides it's paid through the nose for the business unit, and it needs to make its money back. So, finance reevaluates amortizations, hikes up management fees, and now the unit's profit is not so good – which is a good challenge in itself, because the company will have to Lean itself further. So far, so good.

But then, the markets are slow (it's tough all around) and the quarter's numbers are not going to be good. So corporate fixes it by imposing a zero temporary workers policy across the board. No replacements, no special cases. As a result, some component cells lose capacity, parts are missing, on-time-delivery crashes back to where they were when they started, losing about 20 points.

The business unit tries to react by frantically moving people around and asking managers to take assembly jobs (yes, they do), but, to their dismay, this produces a few more parts but increases the general unraveling of the pull system: the ball is running down the hill.

The pull system makes it worse, because as some components don't get built, they don't get reordered, which stops preceding processes – who then start making their own decisions about what to build, and usually get it wrong, creating inventories in the process (without solving stock outs), and run Forrest, run.

At month end, there are clear savings from the zero temp policy, but at the cost of ten times sales lost (now in back orders) and an EBIT loss of three times the savings accrued. People are unsettled and disgruntled. They thought management's core values were safety and service, and now everyone is talking about profit saving and cost reduction. Operators feel let down, and their prejudices are reinforced: this is just another company after all.

Would this have happened without a pull system? Clearly not (but neither would the results). The pull system indeed makes the company more fragile, but not so much to external changes, but to heavy-handed management action. Seeing OTD go down and shop stocks empty is a sure sign that something is going on, and usually the opportunity to kaizen and adjust resources to better fit to market. Results are delivered by the improvement dynamics of gemba leadership where execs and operators can agree on a visible situation and work together to fix it.

Fragility Is Strength

Let me say it: if you don't have a leveled pull in place, you're not doing Lean – no arguments. I understand that in many environments some head scratching needs to happen before we understand how pull applies, but, hey, if we can do pull in IT development projects (and we do, with kanban) we can do it everywhere.

Pull is the key to service and quality. For instance, in the factory I was in yesterday, we were looking at the last delivery of the milk run, which had a few bad parts in a case of 50. We now have to explain to the supplier that we don't have parts in inventory – so two bad parts out of fifty are REALLY going to be a problem because we can't replace these bad parts from two good one from the stock.

Lean is fundamentally linked to the story of the water and the rocks – but also to the fact that by lowering the water and making rocks appear and solving problems together we build in the magic element of any endeavor: mutual support and morale.

The very fragility of the pull system is what keeps people engaged and working together. The fragility of pull is its very strength.

What's your take on Balle's view of Lean and Fragility? Let us know your thoughts at the Feedback section below.