Today I ran across an article titled Black Swan Alert: Low Tech Links Devastate High Tech Supply Chains that I feel requires a response. The article cites Nassim Taleb, author of The Black Swan, as a way to take a shot at lean, just-in-time supply chain management practices that seem to be gaining favor:
A solution proposed by Dr. Taleb and others is to build a robust system (in this case supply chain) with redundancies and disaster recovery processes to properly manage extreme event risk…
This article makes two important points. First, Dr. Taleb is right–leaning out a supply chain in a way that presumes that we live in a stable, predictable environment should not be accepted as an optimal business practice. Second, many companies seem to be optimizing for “normal times” in the name of going lean.
But this is not what going lean is about.
It is important to understand that lean, just-in-time practices far more than what they seem to be on the surface. They are about far more than optimizing inventory for predictable conditions. Fortunately there are some in this business who seem to understand. I ran across an article in Outsource that points out why lean must be more than simply a means of applying what is seen on the surface at a manufacturing organization…
In his book Going Lean, author Stephen Ruffa cites standouts such as Walmart and Southwest Airlines as pioneers in adopting Lean to combat a turbulent business environment. The lesson here is that even when external forces are restless, companies can weather the storm by adhering to the stabilising forces of a Lean culture.
I must admit that I have become concerned about the direction of this lean movement as a whole. Lean was originally employed as a means for companies to overcome their unpredictable operating environments–and thus, this approach is well suited to managing within the extreme turbulence that has become the norm for businesses everywhere. Too often, however, this powerful approach is relegated to implementing a discrete set of tools and techniques, offering only modest benefits rather than the competitive advantage it has been shown to produce (see A Roadmap to Success or a Lesson in Map Reading?)
For those who wish to learn about how lean principles can be used to slash costs, promote innovation, and overcome the risks created by operating in uncertain, dynamic conditions (known as lean dynamics), I provide a history, a description, along with cases showing how it is used in my book Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits. I subsequently wrote The Going Lean Fieldbook: A Practical Guide to Lean Transformation and Sustainable Success to break this down further into a framework to support an action plan.