Extreme Lean: The Next 3 Frontiers

There is a lot of talk these days about where things are going to be made next. That is a fair question as we have seen operations move globally for a variety of reasons: labor, logistics, proximity to markets, etc. There are many incentives enticing companies to set up operations in their region. All of these have moving parts and will continue in the future.

I have been with Milliken and Company for 40 years. Milliken is a textile, floorcovering and specialty chemical company that has weathered some of the strong economic forces mentioned above.

In the early 1980s, the Japanese Automotive industry took the world by storm when they introduced reliable, fuel-efficient cars. The tag “Made in Japan” had a reputation for being cheap and sub-standard. We all know the story because most of us lived it. Then it spread to other industries like electronics, appliances, etc. Milliken saw this emerging manufacturing revolution in 1979 when a group of Milliken leaders went to Japan for a machinery show. While in Japan, they visited a Japanese textile plant that was 25 years older than any operation in Milliken. They reported the plant was operating at higher productivity, better quality, lower cost and best safety results than we were.

Our management could not believe it, so we commissioned a second team to visit the same plant to confirm this report. They returned saying the plant was even better. This motivated our organization to embrace Quality as a competitive weapon. I was asked to lead several Study Missions to Japan in the 1990’s to continue learning about world-class manufacturing. We benchmarked, changed, and we believe Milliken’s current success today is built on this foundation.

Low-Cost Labor caused many industries to migrate where their cost structure was driven by labor costs. This was not only disruptive to the industry itself, suppliers that were not labor intense (capital intense instead) had to make the tough call whether to follow the low cost customer base. Milliken also lived this. Two decades ago, we had 8 competitors in the U.S. in the textile industry doing a billion dollars a year in sales. Today, we have none.

A few years ago, I was asked to go back to Japan to understand what the next evolution in manufacturing was going to be. What I observed was the fundamental foundation of world-class manufacturing was still very much in place, but what had evolved gave insight into the next major trends or revolutions coming at all manufacturers.

Just about all manufacturers have now embraced Lean or some of its components. Many companies today refer to being on their “Lean Journey,” but what I witnessed was an extreme version of Lean, what I call “Extreme Lean.” The sheer velocity through the extended supply chain was unbelievable, but to get there, a couple of other “Revolutions” are enabling this high bar in manufacturing. Of course, there are others, but these are what we think are the big three frontiers.

I think it is important for all manufacturers to understand them and their implications.

  1. Robotics/Automation. There was a much higher degree of automation everywhere. We were greeted by robots at Toyota and Honda. One played a trumpet and the other served us something to drink. In the plants it was clear that the repetitive, mundane tasks were being automated first. In one automotive plant 1500 robots were now doing all welding. This trend will clearly continue into more skilled tasks.Robot AutomationImplication: While robotics replace manual labor, the requirements for robotic design and maintenance are taken to a new level. The reliability of these automated tasks are now mission-critical to the overall operation.
  2. The Knowledge Worker. This was a surprising finding with the excitement around robotics. On past study missions, we saw employees encouraged to submit hundreds of improvement ideas each year. We did the same at Milliken. The change we saw was this is now flipped. It is now more the employee engagement (which seems to be the buzz words today). Employees are now required to submit two to three ideas each month that are implemented.Implication: Employees are now expected to “Think.” It is now a part of their job. The knowledge worker is coming and will co-exist alongside of sophisticated automated equipment. Employees will need more sophisticated problem-solving skills.
  3. Extreme Lean. We saw lean organizations a couple of decades ago, but what we witnessed in Japan was “Extreme Lean.” In the automotive industry, we saw plants with 10 hours of work in process inventory a couple of decades ago. It’s now at three hours! One plant was receiving 3000 truck deliveries that day!Implication: Lean requires a very high degree of stability and reliability. Just look at the foundation of the Toyota Production System…stability. This enables them to not only run their operations leaner, but also run the extended supply chain leaner as well. When you run this lean, a small blip can be catastrophic so the foundation is critical.

I did not expect that these three revolutions would be what I would report back. You could say they are more evolutions than revolutions, but they are happening now and changing the landscape of manufacturing. I find most are not surprised about Automation or Lean. The thing that is most eye opening is around people and how their role will be elevated and much more critical in the coming years. The best organizations will address all three.

This article was originally published on LinkedIn by Craig Long. Craig Long has spent his 40-year career with Milliken & Company in a variety of executive leadership roles. In 2007, Craig helped launch the Performance Solutions by Milliken business to assist other organizations with the same challenges that Milliken has overcome. Craig’s experience includes business management, quality, continuous improvement, corporate education, industrial engineering, product development, and complexity reduction. For the past two decades Craig has led successful MPS implementations within Milliken and with 350 client operations in 23 countries to date. To learn more, visit www.performancesolutionsbymilliken.com.