In a recent post, I talked about my "value stream map conversation starting question": "Would it be worth it to cut the
cycle time of the process, even if the cost remained the same?"
In the case of the client referred to in that post, the question prompted the first insights for the team as to what lean manufacturing is really all about.
The team I was working with at that particular client said they had never worked on a project that didn't have cost reduction as its primary motivation. Ever. So when I asked about possible competitive advantage that didn't have cost reduction as its foundation, they simply didn't know how to respond. No one had ever presented such a notion, that companies could compete on something besides low cost.
Ever more often, I see the term "lean" to mean "low cost". So, lean
manufacturing becomes simply a rehash of old style, worn out
manufacturing thinking and strategy: if we reduce the cost to zero,
we'll have infinite margins. Nobody puts it quite this way, of course,
but that's really what the low cost strategy is all about.
This isn't to say, of course, that cost reduction has no place in manufacturing, or in lean manufacturing for that matter. It would be silly to even suggest that. It
is to say, though, that the reductions in cost achieved through the application of lean manufacturing concepts and practices aren't, can't be, the primary motivation for implementing them.
So back to the value stream map...it's primary purposes are two-fold: to reduce the cycle time and to reduce the variability of cycle time. Either is good. In the case discussed in the previous post, the quoted lead time for the product was six weeks but the real cycle time varied between three weeks (not very often achieved) to more than a year (not very often). If the value stream map allowed the company to hit the original six week lead time, give or take a few days,
all the time, what would it mean to the business?
But both is better. A short, consistent cycle time is the essence of agility. Agility provides sustainable competitive advantage. Low cost doesn't.