The Supply Chain Management Review just published a really lame article (Why China Is Not Ready for Lean Projects).
The author is Rosemary Coates, an American consultant. I gave only 2 stars out of 5 to her book about China sourcing (see my review here).
Let’s go through some excerpts from her article.
First nonsense: lean manufacturing is a set of techniques
When product quality at one of these [Chinese manufacturers] was not achieving the company’s standards, the VP of Supply Chain [of the importing company] dispatched a team of people to go to China and teach the factory problem-solving Lean Manufacturing techniques.
The importer wanted to use a few techniques from the lean manufacturing toolkit. They didn’t even do it the right way (as we’ll see soon), so it didn’t work.
Actually, “real” lean manufacturing is based on a set of principles (respect for people, continuous improvement…) that produce tools and techniques. A true lean transformation takes years, and is NOT primarily about techniques.
Second nonsense: classroom training should be enough
The team arrived in Dongguan and went to work giving an overview class on Lean techniques. The factory workers seemed attentive and interested in learning. The next day, the Silicon Valley Lean team gathered the people from the assembly line to begin the process of working on the quality problem. After 3 hours, the Lean team ended the session in utter frustration. No one participated. No one would identify problems on the line. No one knew how to approach gathering or analyzing data. No one volunteered.
In my experience, classroom training is not effective in China. Only on-the-job training and coaching can lead to a change in behaviors, and it takes time.
They expected Chinese employees to speak up and point to problems in front of customers! These Americans didn’t make the effort to understand the local culture, and they ended up feeling frustrated. So unique and so surprising…
Lean is not about quick training. As detailed at length in Toyota Kata, ongoing on-the-job coaching is necessary to reach very high productivity and quality levels.
Third nonsense: lean principles come from the West
What methodologies such as Lean, TQC, Six Sigma and others don’t take into account are the cultural differences between the Western world and China. Lean principles are based on Western ideas and methods including critical thinking and collaboration.
Didn’t lean principles come from the Toyota Production System?
Granted, they got some inspiration from the Ford production system, from American supermarkets, and from Deming’s teachings after Word War II. But the “principles” (e.g. continuous improvement, putting people and processes first…) seem to come from Japan at least as much as from the West.
This is all explained in excellent books such as Toyota Production System and Toyota Way.
Fourth nonsense: lean thinking is incompatible with Chinese culture
The teachings of Confucius, on the other hand, suggest behaviors that oppose collaborative problem solving and public criticism. The Chinese have been practicing Confucian values for nearly 3000 years. Children are taught Confucian values in elementary school and families practice them in their daily lives. For example, “saving face” is way more important than concerns for quality. If a worker were to criticize the production line processes as the cause for quality problems, the line supervisor would surely lose face. So it is very unlikely that anyone would speak up to offer criticism.
There are actually two nonsenses here.
First, criticism seems to be necessary in a lean manufacturing environment. Really?
What is necessary is removing the need for criticism. Once you work on small batches, in small and autonomous teams, and everyone follows a clear standard, it is much easier to notice quality problems. And then, instead of pointing fingers, the team leader should concentrate efforts on fixing the process and training the workers.
In a lean organization, suggestions are good, finding problems is good, and criticism is bad.
Second, Chinese culture seems to be an insurmontable obstacle to the adoption of lean principles. I don’t buy this.
In Lean Thinking, the authors recognize that certain aspects of “lean” (such as hansei) are harder to adopt outside of Japan. But they explain at length how Toyota gradually succeeded in converting their North-American operations, starting with their Georgetown facility, to their principles.
Create the right kind of atmosphere and culture in the company, and it get much easier to implement lean manufacturing.
What should that importer have done?
I think they had two options (apart from switching to another manufacturer):
- The short-term fix: aim at “kaikaku” (one-time radical improvements). For example, if one process was producing defects, some techniques from the lean handbook could have helped — as I suggested in a previous article about troubleshooting.
- The long-term fix: transform the company’s culture little by little, to the point where they can count on the staff to help out and give suggestions. It seems like they thought they could jump to this stage in a few hours. In China, this kind of things takes much, much longer.
Conclusion: is China ready for lean?
For now, and the next 10-15 years, I see traditional values winning the race.
I actually agree with the author, but for different reasons. China IS ready for lean, but it will take a long time for factory owners to wrap their heads around lean thinking.
Lean manufacturing hasn’t even won the race in the US or in Europe, and is not even close to winning it… So let’s give China some slack, all right?
++++++++++
Update: I found out that I wasn’t the first one to react to this article. See China Is Ready for Lean Projects, like the Rest of the World, written by a true lean expert.
My best Chinese supplier has made dramatic progress in his operations in the last 2 years. They have upgraded equipment, made a great start on 5S, taken a lot of inventory and inspection out of the plant, and have implemented many “visual factory” tools. While they still have room for improvement, you wouldn’t recognize them from a few years ago.
I would like to take credit for this but probably the biggest influence was finding a good role model – the factory moved some production to a subsupplier who had a fine lean operation. Once the owner saw this, I am convinced he wanted his factory to look the same (or better!).
So yes, the human element is the key here, not the toolbox.
Thanks Brad. A role model + pressure from a customer are great factors in pushing a factory owner to undertake a lean transformation.
Dear Mr. Renaud,
Great. Your analysis is the the kind of a right response from a QM person, factual and impartial.
Otherwise we see that China bashing has become a fashion and all criticism on China is taken for granted.
Of course no one should be prevented to comment upon a thing, if it is wrong.
In fact I feel the other way. China may not have all the theory and jargon of Lean Management,
but China leads in practising LM in reality.There is no fuss, frills in its production techniques.
LM is a natural habit of Chinese Industry.
And, may be, thats why it is possible for China to operate at lowest prices.
Thanks.
BNY
BNY, I guess China is a leader in low costs, but for the simple fact they have low labor costs. Their labor productivity is among the lowest in the world, unfortunately.
Excellent post ! I indeed think that lean manufacturing is an exception today in China, but not for the reasons mentioned by Rosemary Coates. I have been in contact with her in the past and she seems to be a good consultant, I guess she misses first hand experience in China.
Most suppliers are operating for 5 to 10 years only, and they are still in the process of sorting out their processes and prioritizing challenges. But a significant percentage of suppliers is improving dramatically.
Interestingly enough, I recently heard a quality management consultant saying that he starts having private Chinese factories hiring him because they see that quality improvement is not only good for clients but also reduces their costs !
So for those Western companies who may want to feel secure because Chinese suppliers are not ready for Lean Mgf or other operational best practices, I will say: think again.
Thanks Etienne. You are right, most factories are young in China and they are prioritizing challenges.
Renaud this is one of the most interesting posts I have seen over the short time that I have been reading your newsletter. I have previously commented on Labor productivity in China. And while I think there is much more room for productivity, I don’t think I would have ventured out to say that China is not ready for lean. I interact predominately with small to mid size factories in China. I have noticed that the factories in China that were established by Taiwanese-Chinese seem to be more efficient and use lots of lean techniques. I told one of of the Taiwanese suppliers that I would like his factory manager to come over to the US to help me with the improvements I was implementing. So I say hogwash to China not being ready for Lean. In your experience have you noticed a difference between Taiwense – Chinese Factories and homegrown factories? I have also seen several mainland Chinese companies excel in productivity. I have not read the article, but I found it hard to believe that the author did not have examples of Chinese companies demonstrating the use of lean. They must not have been looking very hard.
Rindge Leaphart
Good points. Yes, Taiwanese- and Japanese-owned factories in China tend to be much better run. And a few 100% Chinese manufacturers are also very efficient, especially in sectors where their customers placed a lot of pressure for improvement (the car industry, for example).
However, this is not the case of 99% of factories here…
I had commented on your subsequent post, but this one deserves comment as well.
I find that taking my managers to actually see how a lean plant is run (we’ve traveled up to Suzhou area visit US and Japanese factories) helps. If you’ve never actually *seen* lean operation, it’s hard to imagine it.
Once you’ve shown it, you can implement on a small scale and show the numbers. Production and warehouse leaders are usually the first to “get it”. Accountants are usually the last.
You mentioned Kaikaku (GaiGe, I think, in Chinese) . This is not mentioned as much as it should be, and I’ve practiced it twice in turning around wasteful factories.
Once again: there is NO REASON Chinese manufacturing leaders can’t lean their operations. Neither history nor culture gets in their way. Show it to them (as someone once showed it to us) and lead the effort. It will come.
Thanks for sharing your experience.
I also think well-targeted kaikaku projects can have huge results within a few weeks… It is probably a good way to convince a factory owner to get deeper into lean principles.
A healthy discussion I must say. I’m associated with apparel sourcing for some time. The quality is some thing that comes with time. Experience and practice polishes it. We should all be receptive in +ve sense and try to achieve it as a team. It’s all the concept ” Try to do the things right in the first go”.
I’m sure we cannot restirct this lean theory only to China, it happens every where, it’s b’coz it’s an integral fact of any complexed production activity. It’s only how the people take it on their part.