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Lean is a Rumor, in China?
August 16, 2008

IndustryWeek : Eye On China:

Interesting story here in IndustryWeek, generally talking about the state of manufacturing in China, but turning its eye to Lean:

When it comes to the current state of Chinese manufacturing efficiency, David Hemmings, president and CEO of consulting firm Pacific Rim Alliance, says, 'Chinese companies, when compared to Western productivity numbers, are still very inefficient despite a great workforce ethic. It doesn't matter if wages are only $1.25 an hour if there are 2,000 extra people working to make up for their inefficiencies.'

That's the typical argument about why China "doesn't need" Lean. But labor savings is only ONE PART of the Lean story. It's frustrating when companies obsess over labor cost instead of thinking about how to increase value or how to unleash the creativity in their workforce. Of course, conventional wisdom says Chinese workers are compliant... so can you achieve Lean employee engagement in China? I'd assume that you could, but who has experience with this first hand?

From Hemmings' perspective, lean manufacturing is mostly a rumor in China. 'Chinese-run companies don't have lean manufacturing, and workers won't stop production lines if they see something's wrong because the social and education system is based on Confucianism -- which emphasizes loyalty, harmony and obedience, not questioning.'

Ah, obedience. That's exactly what many top-down command-and-control managers and executives want. I wrote about that three years ago, when an article appeared in the WSJ saying that many companies are "Soviet" in nature. Lean leaders DO want employees who question things, coming up with ideas, and innovating.

As he sees it, the Chinese government does not encourage lean manufacturing because 'it wants to spread the wealth and create more jobs, not less. Additionally, it wants companies to take on cost and the burden of social responsibility.' The lack of lean manufacturing, he adds, is one of the reasons why only three out of the top 10 Chinese car companies are local domestic producers.

This seems backwards. If you want the company to create more jobs, the way to be successful and sustainable is to be Lean. Look at the huge market there -- use Lean, get more efficient, and then GROW. That is a possible strategy for Lean, right? Lean and productivity improvement create wealth. Having a Chinese economy that's a "jobs bank" won't be good for them in a long run. What do you think?

Posted by Mark Graban on August 16, 2008 | Comments (0)