The Corona crisis is a social tragedy. It is not limited to a virus that poses a major threat to public health and paralyzes our social and civic life; it unexpectedly exposes many other problems as well.
One of those problems that has been exposed is Lean. After all, Lean and Just-in-Time preach inventory reduction, and that has led to the current glaring shortage of mouthguards and other materials needed in healthcare. Right? Jan Kluytmans, physician-microbiologist at the Amphia Ziekenhuis in Breda stated on 27 March in EenVandaag:
And Ewald Engelen, professor of financial (!) geography at the University of Amsterdam, suggests in the Groene Amsterdammer that the 'buffer hatred' of Lean and Toyota has contributed to the shortage of hospital beds, mouth masks, ventilators and test kits.
Ouch. That hurts. Only... what these gentlemen are describing has nothing to do with Lean. In fact, it's quite the opposite.
Where do Kluytmans and Engelen miss the mark? The beginning of the explanation is given by Mathieu Segers, professor of European history at Maastricht University, in the programme Medialogica Kort of April 2:
Segers talks about an iron stock. According to Wikipedia, the purpose of an iron stock is to match the pace of production with the pace of consumption. This clearly went wrong with the mouth caps. And let that exactly be the goal of Just-in-Time: Producing what is needed, when it is needed, in the quantity required' - no more and no less. Not as a static solution to an optimization problem, but by adapting to changing circumstances, as China apparently did as a result of the SARS and MERS epidemics.
Lean does not want to get inventories to zero irresponsibly. Stabilization invites you to bring your inventories in order with cycle-, buffer- and safety inventories (regularly we advise organizations to first increase their inventories to improve the delivery reliability); Just-in-Time does not tell you to reduce your inventories, but shows you what you have to improve in order to reduce your inventories without endangering the delivery reliability. Value stream mapping is a technique for senior managers to organize the integral production system in such a way that the customer can be served optimally - reliable delivery without the (healthcare) costs becoming unmanageable. For this a very thorough understanding of both the (ever changing) 'demand' and the own 'production' is necessary.
It seems that large batches of Dutch mouthguards were sold to China just before the virus showed up here in the Netherlands (I haven't been able to find a source but Segers seems to suggest this as well), and that extra respiratory equipment was only re-ordered when Philips' stocks had already been sold to other countries. In a Lean Netherlands, the value stream manager of healthcare could have seen coming as early as December 2019 that an epidemic might be heading our way. Such a value stream manager should have anticipated this by increasing inventories and creating extra production capacity for masks. Selling mouthguards and not ordering respirators on time seems focused on short-term financial gain and therefore the opposite of Lean. See for example this fragment from a video by John Shook:
If you want to know more about this, then chapter 7 of The Toyota Way by Jeffrey Liker is interesting. In it, Liker describes what it means in practice that Lean is not about making money, but about doing the right thing (making money turns out to be a pleasant side effect, by the way). On page 71 Liker writes:
'Can a modern business thrive in a capitalist world and make a profit by doing the right thing, even if it means that short-term goals are not always the first goal? [...] Toyota's greatest contribution to business [is] that it is living proof that this is possible.'
If, on the other hand, we were to follow the bubbly talk of Kluytmans and Engelen, we would arrive at remarkable conclusions. For example:
- The practices of Jomanda, for example, clearly show that health care is extremely harmful. Unfortunately, many people still naively believe in health care. The Faculty of Medicine cannot even cope with the influx of new students, so they have to make selections! It is time we said goodbye to this.
- "We have never seen an ape evolve into a human being. Yet people continue to believe in that theory of evolution. It's time we banished that theory from education.'
- Time and again the maths tests children take at school show that arithmetic leads to wrong answers. Nevertheless, people continue to believe in it. It is time to leave our naive faith in mathematics and science behind.
- Sieneke's 'Sjalalie sjalala' has shown conclusively how bad music is. Unfortunately, people keep coming to performances of the Concertgebouw Orchestra in spite of this. It is time to abolish the conservatory training!
Hopefully it is clear what goes wrong in this reasoning: the theory of evolution does not claim at all that apes evolve into humans, Jomanda did not practice medicine at all, so her actions cannot possibly be blamed on medicine. Wrong answers in sums are precisely because the rules of calculation were applied wrongly, so you cannot blame mathematics. And you can't blame the Concertgebouw Orchestra for the existence of Shalalie Shalala.
In the same way, you can't possibly blame Lean for irresponsibly reducing inventories and not having a systemic vision of the organization!
Where the gentlemen clearly have a point, is that many stocks have actually been reduced to an irresponsible degree in order to save costs in the short term. What is also true is that this has very often been done in the name of 'Lean'. Incorrect and unjustified, but it did happen - and we cannot blame these gentlemen. The term 'Lean' has never been registered as a protected brand, so that everyone can call themselves Lean trainer or consultant. And that is what happens. In the best case, you have an incredibly nice workshop but without real or lasting results; in the worst case, we are without mouthguards and breathing apparatus during a pandemic. And every MBA can preach about Lean all they want. Too bad, because this way we remain stuck in the wasteful mass production thinking of a hundred years ago.
This is doing untold damage, far more than just mouthpiece shortages (how bad that is in itself):
- Economic and ecological damage, because we all work unimaginably more inefficiently than is possible (for example, we keep swinging back and forth between irresponsible stock reduction out of financial self-interest on the one hand, and colossal wastefulness by continually holding far too much stock of everything on the other);
- Social damage, because we undervalueor overvaluepeople because of their position in the hierarchy (in Lean, we abolish authority based on hierarchy and have to learn to observe together what actually works and what doesn't);
- Intellectual damage, because we do not sufficiently develop people, including ourselves, in the practice of observation, analysis and experimentation (in Lean we learn to develop hypotheses and test them in practical experiments - it is the only known operationalisation of 'the learning organisation').
The extent of this damage is incalculable.
We cannot blame people for knowing little about Lean. Neither can professors. But it is a pity that people with enormous expertise in one area (microbiology or geography) are given a platform and credibility in a totally different area (Lean management), especially when they make blatant misstatements in that other area and especially when they themselves cause the damage they accuse others of. It is precisely those scientifically educated people who seek out the media who have a responsibility not to perpetuate these patterns by making uninformed statements.
This contribution was written by our colleague, Marcel Aartsen.
Photo by Mika Baumeister.