Lean IT - what comes first, technology or waste reduction?

Is your organization broken?  Is waste high, quality low, cost high, productivity low?  Are you missing key customer delivery promises?  Is cycle time too high?

Put in new Information Technology. That'll fix it.

Right?

Not according to most folks who study manufacturing excellence.  In fact, if you automate a high-waste, high-cost process you are likely to simply waste more money faster.

Jim Collins and his team studied 11 companies that had gone from sustained average performance to sustained superior performance (as reported in Good to Great: Why Some Companies Make the Leap... and Others Don't, Collins, 2001, 320 pages).  In no case did technology drive the change.  Collins found that these companies took a strategic approach to technology.  If a particular technology was required in order for a company to excel in its chosen niche, the Good-to-Great company would lead the way.  On the other hand, if a particular technology was not a requirement for success, that company would wait - letting others work out the bugs - and implement only when they had to.

Toyota uses a similar approach.  According to Jeffrey K. Liker and David Meier (in The Toyota Way Fieldbook, McGraw-Hill, 2005, 476 pages), Toyota begins with a focus on eliminating waste.  It works first to improve the human process as much as it can.  Toyota installs IT only when two conditions exist:  the human process has been improved as much as it can without the technology, and the technology is proven and reliable.  And rather than pushing technology on people and processes (the traditional top-down approach), Toyota looks to the people and processes to pull the technology they need to support their decision making.

Mike Schaffner, a senior IT executive who sees technology with shop-floor eyes, said it nicely a few days ago:

"...we need to shift our focus from the tools, e.g. faster computers, upgraded software, new input devices, to the transformational impact."

In other words, what counts is how IT will help drive customer value - not how cool the technology is.

Over on the "The LEAN Executive," Mark Edmondson and Bill Waddell have written several posts on this theme. 

After visiting the Assembly Technology Expo, Mark wondered:

"What if American industry spent just a fraction less on material handling equipment, and just a fraction more on improving their process flow?

What if American industry spent just a fraction less on “Machine Vision Systems” (it looked really cool), and just a fraction more on teaching their people with how to see waste?

What if American industry spent just a fraction less on automated storage and retrieval systems, and just a fraction more on creating level pull and reducing inventories?

I like cool new technology just as much as the next engineer, but I sense that most companies could make much more progress by shelving their next automation project and spending that next dollar on processes, management systems, and developing people.

And Bill suggested that...

"The primary customers of IT should be the people adding value in the core processes.  The ongoing questions driving IT priorities should be ’what information do they need to do their jobs and to create greater value for customers’.  Most of the answers will result in small projects with immediate, measurable returns."

Mark calls for first training people on lean thinking, empower them to see and eliminate waste from the process manually, and then see if technology can help them eliminate even more waste.

So, how should you handle requests for funding for IT projects?  Should you just say, "No!" and force folks back out to the shop floor.  That probably isn't a bad idea the first few times you get asked to fund the latest IT proposal.  Eventually, though, you'll need to ask more specific questions.  Here's a great list from The Toyota Way Fieldbook, page 216:

1. How have they [the project team] involved the users of the technology in the design of the technology?
2. Have the proposers practiced "genchi genbutsu" (go and see the actual process) and studied the way the current process is being conducted today?
3. Have all attempts been made to take waste out of the current process before proposing new technology?
4. Has a close relationship been developed with the IT provider so they will work to customize the technology to the people and process?
5. Has a pilot been planned to prove the technology prior to full-scale implementation?