In the Next ATJ Blog – Gary Stewart ‘Goes Deep’ on the Lessons from Australia’s Carmageddon – Building Innovation Pipelines in a post-lean world
Over the 54-year lifetime of Australia’s automobile industry which ended October 3rd of this year, the close interbreeding among suppliers, customers, and highly competitive companies enabled each to evolve valuable and unique Innovation Pipelines to compete in a world always demanding more continuous improvement.
However, with the total collapse of the Australian car industry this year, the Innovation Pipelines suppliers had refined over five decades were shattered. Seeing this, brings a sense of urgency to learn & harvest everything one can from such an experience, to protect the future Innovation Pipelines we will need to better cope with such calamities to come? Gary Stewart will share his perspective from his front-row seat as a leader/practitioner in one of the key entities.
Are You Beginning to Think Beyond Lean Yet?
…and about the Innovation Pipelines required to compete?
“Lean Thinking is best understood as a means to build businesses as strategic learning systems that provide companies with sustainable competitive advantage through industry disruption. – enables any business to thrive by thoroughly disrupting the industry in which it competes.” John Shook
The Gathering Storm
With uncertainty regarding NAFTA, CETA, and the TPP trade agreements – plus the challenges awaiting us in 2018 – with and without NAFTA – our ability to compete and win in the global marketplace will require a survival mentality, and the strength and commitment to achieve it – no matter the size of your business. Nothing has brought that reality home more quickly than the transition from the 2008 recession to now. Many of today’s winners became leaders through the Lean explosion of the last decade. They also know the danger of letting one’s thinking become frozen.
For many in 2018, survival will mean accelerating continuous innovation in each of the three key elements we all have to work with – in our People, our Processes, and in our Technology deployment. Lean’s early contribution to competitiveness has been through ‘Efficiency Innovation’ since 1990 when Dan Jones & Jim Womack drove it viral through Lean Thinking (http://ocapt.com). Both Dan and Jim, over the last 30 years have shown our future success will lie through our commitments to PEOPLE, respect, and learning-by-doing with the customer always first in our Visions. Dan Jones emphasizes Lean as – ‘THE people-centric management system for the future!’
Hold that thought -because after 30 years of driving Lean across North America, ATJ believes it! If you are early in your journey – a top recommendation would be to get Dan’s newest book – The Lean Strategy (http://ocapt.com) onto your bookshelf now. Or, as a Christmas gift, put it in the hands of those around you who are your potential leaders and most valuable colleagues and staff.
Where Are We? – A Quick Check
Lean has brought a winning competitive advantage to many through Efficiency Innovation. But most know there will come a time when one feels ‘Leaned out’ because everyone else has been doing similar things. We become frustrated when little competitive advantage is available from Efficiency alone. At this point, those with more abilities to innovate will dominate, disrupt, and take the customers.
When competitive disruption & discomfort become hurtful enough – the best will go beyond what they did after 2008 by focusing more on learning and innovation to fight back. Many leader/practitioners – like Gary Stewart, whom you will meet in the next issue hypothesize that while Lean incorporates more competitive processes & thinking into people systems and choices of the right technology – the winners see more innovative thinking is needed to enrich each of these three elements of People, Processes and Technology to cope and succeed in the emerging innovation-driven marketplace ahead.
Insights from a Carmageddon Survivor
Our next ATJ Blog, will be guest edited by Lean expert, Gary Stewart, a Senior Toyota leader who has seen first-hand the economic supply-chain disruption that occurs when long-developed Innovation pipelines are suddenly shattered. It’s not pretty – especially when there is little time to recover. We are indebted to Gary for sharing his experience & insights which have been forged over his past three decades with Denso and through his leadership as General Manager at the respected Toyota Aisin parts plant in Melbourne Australia.
On October 3rd of this year, the last Camry was built and the doors were closed forever. It marked the end of 54 years of all production in Australia as Ford and GM closed as well.
Ironically, it was this Toyota plant that was chosen to be the first Toyota plant in the world to produce its cars outside of Japan.
The Innovation Pipelines Cometh & Goeth
When the Melbourne Toyota plant opened over fifty years ago, there was a joyous explosion of excitement and hope as internal and external suppliers and their customers began building the processes – and the pipelines – to supply the plant.
It was a new paradigm. Everyone understood they were being thrust into a new world of Continuous Improvement with Toyota. It began with the initiation of simple ‘Innovation Pipelines’ built from supplier relationships that carried new thinking, solutions, ideas, and changing technology, along with what ever they were initially contracted to deliver.
Updates flowed freely. As time passed, these relationships that forged these innovation pipelines of knowledge became even more innovative. They had to be since all had to march to the ‘always improve’ drumbeat. It made good suppliers better; better suppliers great; and transformed great suppliers into thriving entities and leaders.
On October 3rd, 2017, these crafted pipelines were shattered. We know there will be more to come as everyone continues to evolve. Hence, learning the lessons from this experience has high value in crafting the ne innovative pipelines in the future. That is what Gary’s article will discuss in the next issue where he will share his big-picture experience. It will remind us once again that as paradigms change so must the infrastructures and the pipelines that support them. Keeping an open, and unfrozen, mind helps us to prepare for whatever is to follow.
To many Aussies, this year’s collapse of all auto making was a shock that caused some to dub it their ’Carmageddon’. This meant this nation of 23 million people would make no more cars. The result was the loss of jobs for 2,700 skilled workers at Toyota; 1,200 at Ford with their closure this year; and, with 3,000 more men and women to be laid off from GM’s Holden plant.
But that’s only part of the story. Research from the University of Adelaide points to a much higher job-loss figure with all infrastructure job losses were considered for a total of some 200,000 jobs. In addition, $22.6 billion Australian dollars will be lost from the Australian economy annually. All this has occurred over the last decade from 2007, when Toyota’s Melbourne plant was at its annual peak, producing just under 150,000 cars. [Note: In Canada, it’s been reported that Canadian retailers may get a similar hit if the US ends NAFTA].
When such unforeseen economic waves occur – they are usually met with a quick situational ‘survival analysis’ reaction. One that includes a re-assessment of one’s reason to exist; one’s Vision/True North; one’s Capabilities; and especially, one’s world of Customers – with the latter demanding total objective honesty about how to innovate solutions that will serve them like never before.
Some Closing Reflections
In North America, the 2006 indicators of storm clouds began to appear to the organizers preparing for the 2008 AME Annual International Lean Conference in Toronto. A it got darker, organizers knew they must mount the right practical program to draw the 2000 practitioners expected. The evidence gathered included known project deferrals & cancellations noted by AME and Lean Consortia practitioners across North America. This, coupled with the frustrating slowness of Lean Thinking’s adoption, were challenges for the 2008 AME International Conference to be delivered during the worst recession in history. The inspirational theme of “Good to Great” was chosen, with the enthusiastic support of Jim Collins.
The solution: – Wrap the program in real-word issues, and make the Leaders Night the right vehicle to deliver a hard-hitting briefing of corporate leaders by a top Leader-Practitioner with the tag line reading “Beyond Lean – A Journey into the Possibilities”. Gary Stewart, a seasoned GM of Toyota’s Aisin Plant in Australia that was running at near-record production in Melbourne at the time agreed to keynote. His session had such impact that the Ontario Government that they brought Gary back in 2009 to speak with struggling industry leaders around the topic of Manufacturing’s Black Swan: Staying Alive in the 21st Century – The Toyota Leadership Way.”
Fast forward to 2017 – Winning means Competing via Invention – vs – Competing by Efficiency (Although we do need both)
As 2008’s ugly recession began to ease, a tsunami of ‘Efficiency Innovation’ (alias Lean Thinking) began boosting the competitiveness of SMEs though their consortia or consultant-led Lean transformations. While many prospered, more began to see that focusing on Efficiency Innovation had limitations, and appeared to project companies toward becoming ‘commodity suppliers/providers’ producing similar products. What became increasingly clear was that global success in the global marketplace would require more original innovation and product design to compete and win in the global market place – and central to that success would be the evolution of effective Innovation Pipelines.
There is very much discussion to follow. Gary Stewart will lead you through in this space in the ATJ Hogg-Blogg next month.