In today’s world, it certainly feels like automation and the use of digital technology can solve almost any problem. Both approaches can create great value and should be used where they make sense. And, when it comes to lean and automation or IT, I see no conflict with computer programs that can speed up and simplify work that traditionally may have been only done manually. New inventions and solutions have been at the heart of productivity gains since the industrial revolution, and I expect that not only will this trend continue but it will accelerate over time. In fact, I hope it will as it has been a key driver in raising millions of people out of poverty.
I will however caution people to be careful in how they blend lean practice with these tools. Over the years, in many industries, I have seen people frequently misuse an IT or automation solution by, to use lean speak, “automating the waste.” (Or as others have labled this, paving the cow paths.) You see this most frequently in industries with many small transactions, where keeping track of them requires the use of computers, such as banks, insurance companies, mortgage brokers, governments, universities and other similar businesses. Hospitals, with their needs for data management for both patient safety and meeting various regulations, are another good example.
In many of these businesses, when a problem arises the knee jerk reaction is to create another computer program to solve the problem. Get the IT people down here right away and tell them: “Here is what we need you to do, how fast can you get it done?” Sound familiar? In places like hospitals, this can not only be expensive but can create new problems. I have seen cases, for example, in hospitals that are organized and run by silos, where the various silos all implement new computer programs to solve their own problems, only to find that none of these programs can talk to other programs and even more money needs to be spent to get them to communicate.
Often a new, and completely unnecessary, computer program is developed to solve a problem that wouldn’t exist if other parts of the system did their work properly. I came across this in a life insurance company that I was helping with some kaizen work. At the time it took the company 48 days to underwrite (i.e. respond to a request for a quote) a new life policy. And they relied on an elaborate and costly (in money and manpower) computer program that tracked the status of all the underwriting requests in the system. They said they needed this program to answer the many requests they received from the insurance agents on the status of their policies. Of course this was only needed because it took them 48 days to get back to the agents with a quote. By using lean to shorten this lead-time, we were able to get most of the quotes turned around in less than 20 days, with a good trend to do it in 10 days. As a result, this program was no longer necessary.
The same can happen in manufacturing companies where engineers love to develop high speed (and very costly) solutions as a first choice to almost any problem. Sometimes this can delay new product introductions or cause massive over capacity when the marketing forecast turns out to be way off the mark. Conversely, if something changes in the product spec later on, the high speed automated line may turn out to be obsolete or require massive capital spending to produce to the new spec. If you ask most manufacturing engineers to cut the setup time on your equipment by 50%, they will often come back with some very expensive automated solution a long lead time. My experience with lean is that setup can be reduced by 90 percent during a one week kaizen without spending much money at all. How much can you even spend in one week?
The point here is that if you first use lean to find and remove the waste from your processes, then when you do decide to automate you will do it step by step. You will then spend a lot less money and automate only what makes sense to automate. Lean will give you a clear picture of where you are and what needs to be done. The same of course holds true for computer programs. A little value stream mapping and kaizen to get rid of the waste first will cut your costs and speed the response.
So yes, lean and automation or IT solutions are compatible, but only if you use lean first to eliminate the waste before you leap into expensive whiz-bang solutions.