David Meier on the State of Lean Manufacturing and Management in China *

Show notes: https://www.leanblog.org/17

Remastered July 2021

LeanBlog Podcast #17 is a discussion with a good friend of the Lean Blog, David Meier, a former Toyota Georgetown Group Leader, founder of Lean Associates, and the co-author of the excellent book, The Toyota Way Fieldbook, and the upcoming Toyota Talent, due out in April (both co-authored with Jeff Liker, check out my Podcasts with him here and here).

In this podcast, we talk about David's recent first hand experiences with factories in China. Are there labor shortages? Is there a lot of waste in Chinese factories? Do the Chinese have good management skills at this point? What lean methods did David see in China? We'll cover all this and more.

If you enjoy this podcast, I hope you'll check out the rest of the series by visiting the LeanBlog podcast main page.

Show Notes and Approximate Time, Episode #17

• 2:00 Overall, pretty surprised, Chinese factories are in good condition, but there are some real labor shortages growing, intense cost pressures from other countries (India, Vietnam, Turkey, etc.)
• 3:00 Lots of struggles from the supply chain side and total cost, “China isn't as great a deal as they anticipated in the beginning” (inbound supply chains)
• 4:00 “One company had 160% turnover last year”
• 4:15 Local management isn't that strong, so companies bring in their own management(which is costly to bring in foreigners)
• 4:45 David was frustrated to see the same challenges and problems in China that are typical here, including the “kaizen blitz” mindset (companies aren't getting long-term satisfaction or a sustainable process)
• 5:50 Saw one company (a clothing manufacturer in China) that took “one piece flow” to such an extreme that it was costing them in other ways, companies are missing the point of what Lean really is
• 6:30 More on the single piece flow situation – are you implementing single piece flow or are you improving performance?

• 10:00 What about Chinese factories and their metrics and goals? David was surprised to hear how everyone was focused on efficiency and labor cost
• 11:00 David saw a lot of Non Value Added activity (20-30% of people's activity) because ofthe way work was structured
• 11:40 “Big shortage of Industrial Engineers in China”
• 12:45 Chinese managers learn “mass production management” or lean management methods?
• 13:45 “I didn't see any factories that would be a model of lean” and David was visiting companies who had expressed some interest in being lean
• 14:15 What lean methods did David see at Chinese factories?
• 15:20 David says there is a general lack of understanding about how to use “Value Stream Mapping”
• 17:15 David and Jeff Liker are working on a new book about systems and how to develop the system properly, how to use the system (such as Kanban) to drive continuous improvement
• 17:45 An earlier new book, “Toyota Talent” is coming out in April
• 18:30 After the Fieldbook, David and Jeff realized there were some topics they could really expand on, Toyota Talent, lean systems, and problem solving.

• 20:15 A preview of Toyota Talent... didn't see much “Standardized Work” in China, the depth of lean there isn't as great as in the U.S. The book looks at how you break down jobs and train people.

• 22:00 People look at Toyota and assume that standardized work only applies in repetitive, highly cyclical jobs (but Toyota has a lot of jobs that don't fit that mold)
• 24:30 David comparing the high turnover in China with the high turnover in fast food and how McDonald's simplifies things, uses standard work, makes it visual, etc. But why do they accept the turnover?
• 25:45 The NPR piece on In-N-Out Burger and how they value employees.
• 26:45 David points out how you have to look at total cost, not just the low hourly labor cost
• 27:30 Is everything going to inevitably move to China? We're trying to compete against that with Lean, reducing costs through Lean methods and improved/faster response.