An interview with Geolean founder Ludovic Ott was published in the magazine L’Opinion. Much of the discussion references conditions for French industry, but the same issues are equally present in North America.
Original article in French, English translation below:
Lean management: “To save factories, we must stop opposing improvements to productivity and working conditions”
Global industrial competitiveness will be determined by internal organization and putting people at the heart of the system.
In October, the morale of industrialists remained stable, according to INSEE. For two years, it has stagnated at levels barely above its long-term average, indicating that French factories are not experiencing real growth. This lack of dynamism is confirmed by the capacity utilization rate, which is at its average from 1994-2007. Saving French industry will require profound reforms, according to Ludovic Ott, co-founder of the consulting firm GeoLean.
You are very critical of the position that the future of France goes through “the factory of the future”. Why?
Because we must stop saying that we will reindustrialize France only with digital tools! Obviously, in the context of globalization and development of digital tools, these elements are important to restore the competitiveness of factories. But they are far from unique. French industry will not rebound because it has installed computers to help production. For the moment, however, there is a lack of convincing results from the factory of the future because the various digital strategies remain fragmented. They are not integrated in a complete transformation plan of the company and therefore can not give results without this prerequisite. The model of French companies has changed little since the 1970s, and is still based on mass production. But at that time, growth was double-digits. Today, however, we are witnessing a complete transformation of market needs. First, the life of the products has drastically decreased. Then we see a “customization” to excess. Ten years ago, the refrigerators were the same as in the 1950s. Today they are almost customized according to customer demand. Yet manufacturing tools have remained the same. To meet this demand, we need to rethink all organizations.
Relying, for example, on the techniques of lean management. Lean is the result of Toyota’s reorganization to deal with the crisis of the 1970s. It allows productivity gains of 20% to 30% in particular because production is closer to customer demand and the organization is modified accordingly. Concretely, lean is an industrial solution to adapt production to demand by generating smaller, faster output. The crossing time of each part in the plant is also reduced in order to reduce costs. And it increases the efficiency of the employees: today only 30% of an operator’s time is devoted to added value tasks, while the remaining 70% is waiting due to poor organization.
Lean has a very bad reputation in France …
Yes, but not to our neighbors. It has always been badly explained! Lean puts people at the center of the approach because it is from the human factor that production is improved. The only way to reduce the crossing time of parts in the factory is to better bond production to customer orders. This involves establishing a dialogue between the personnel that communicate the new production objectives and the operators. Between those who think and those who do. Let us be realistic: the share of industry in the value added of Western countries tends to decline. It is a shame because we have skills, an industrial and commercial ecosystem that should make it possible to maintain national production. Take two companies that make the same product. What are the levers that allow one to become more competitive than the other? We can no longer play on the cost of energy and raw materials, the cost of manpower itself is beginning to harmonize in the Western world. The technology gap? It is actually weaker than we think and does not offer such significant benefits. The difference is organizational.
“The social blockage is linked to atavism, to the antagonistic relations between companies and employees. It is also due to managerial apathy. It is because they are afraid of this social dialogue that entrepreneurs prefer to find solutions based on digital and robots, solutions without people.”
How can we change this suspicious view of lean?
By ceasing to caricature it. Too many people in France think that productivity gains are detrimental to working conditions. It’s wrong. Lean removes everything that slows down work and makes it less interesting. But it must be acknowledged that in many factories this negative vision kills any initiative and prevents them from reaching a critical mass while the world passes them by. The social blockage is linked to atavism, to the antagonistic relations between companies and employees. It is also due to managerial apathy. It is because they are afraid of this social dialogue that entrepreneurs prefer to find solutions based on digital and robots, solutions without people, without human resources. In the end, companies are in flight, rejecting the social obstacle. We see it through the dichotomy that widens between the white collar and the blue collar employees. Management is moving away from the field: as proof, a factory executive now spends 90% of his time behind their computer. This distance creates an even deeper gap between white collar and blue collar. Lean management, by reorganizing the whole company, makes it possible to renew the dialogue.
But it is also the standardization of work …
Yes, we can define it that way. But the greatest source of pain for an employee is the disinterest for their work. When the manufacturing process is poorly organized, it generates stress, the feeling of being always under pressure to meet deadlines. If employees are allowed to participate in the complete organization, they can also find an interest, a motivation that will reduce their sense of pain. I add that lean management is a way of starting from the customer to go up the chain. One asks what are the needs of the customer, then one wonders how to best answer and deliver it in the best conditions, and it is by going up the chain that we arrive at the manufacturing process and receipt of raw materials. What employee is not motivated to serve his clients better? Lean at the core does not change the factory or product manufacture, it changes the way to tie the employee to the needs of customers.