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Lean manufacturing: The new impact on MIS
by Chris Christensen
We are beginning to see a change in how we are implementing our newer systems. For years we have been implementing lean concepts in all areas of our operations except one major area. We have never implemented the concepts of the lean organization in our information systems group. We have been downsizing, rightsizing, implementing SMED, reducing staff and installing the theory of 5-S in all areas of our business except one. Here is the question:
When was the last time your company downsized your IT or MIS department or department costs? Note that I added the word costs in the question because downsizing doesn’t mean that you outsource the function. Costs are costs now matter how you spend the money, internally or externally. Go back to the question and again ask yourself: “When has your organization ever downsized the MIS group or function?”
Remember these folks who tell you to downsize are the ones that have been buying new systems, hardware and software to help you downsize your group and reduce your costs. But who ever thought about implementing the concepts of lean on the MIS function. We are beginning to understand this, and if you are not now considering downsizing your MIS function, it will be a part of your future.
We have been spending millions of dollars on our operating systems and some have been successful but others have not. We spent mega bucks fixing something that in all probability wasn’t a useable tool in the first place. We spend thousands of dollars controlling bolts and washers in production. In maintenance, we spend an immeasurable amount of money tracking the maintenance history on $200 motors because we want to optimize the use of that piece of equipment. We do this because we can. Did anyone ever think of running that $200 motor until it breaks and then replace it with a new one and throw the old one away? No, because we have systems that were able to track this, so we did, and in the process lost sight of the costs involved in tracking the item.
Our problem is that we only measured one side of the equation: the cost-saving side on managing our equipment. We forgot to track the side of the equation that calculated the cost of tracking. While we were tracking the cost side of the business we misunderstood the critical part of the equation. We tried to apply computer power to the one part of the whole equation that we cannot measure. We tried to digitally overpower one unmanageable part of our business to establish control. And we just couldn’t do it.
That part that cannot be controlled, you ask? It’s variation. And it is unpredictable and you can’t plan for it. No matter how hard you try, you just cannot forecast variation and no matter how much money and computer power you throw at variation, you just can’t master variation.
Therein lies the problem. Computers work in only known environments. It is a binary system. Ones or zeros. Black or white. Yes or no. Positive or negative. You give a system variation and it cannot manage it.
We tried to solve the problem. We looked at the worst case situation and did maintenance long before the part could fail; we carried more inventories that needed to guard against a machine failure or part shortage. We did this in all instances where we had so much stuff available that no matter what happened, we had enough stuff to get the job done. And we had our systems set to work at the maximum because they can’t handle variability.
But here is where we are at now. We are beginning to realize that there is no reason to have bigger, better, faster, more detailed computer systems because we just can’t predict variability.
We are now beginning to realize the costs and futility of trying to solve the problem with money and computer power. We are now looking at visual management systems. We are thinking about what it is we are trying to do and using simple prompts and visual cues to manage the business. In maintenance, we are beginning to understand that it might be cheaper to consider items as expendable and treating them as throwaways. We are beginning to find that through noise, infrared, vibration, oil analysis, we can in fact predict our maintenance needs and failure time without the computer system and can buy the parts when the telltales are triggered and just through the worn stuff away.
Consultants in the field are beginning to walk away from the high costs of maintaining the computer system. You just might want to do the same. The bottom line is what is the cheapest way of getting the job done. If the answer doesn’t include the MIS department in the solution, just maybe they too need to be downsized to be more cost effective.
R.T. "Chris" Christensen is the director of the University of Wisconsin School of Business' operations management program. If you have an inventory management question, contact Coach Christensen by phone at or e-mail .
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