How to implement Lean in your Chinese Factory
China is continuously changing the last years from the extended workbench of western companies to a market for services and goods and continuous to develop with high speed.
The back draw of this development are higher wages, from 2009 to 2017 the wages increased in average by 12%, currently slowing down to 7% - 8%.
How does this impact your business?
With these wages manufacturing becomes increasingly costly in China. Therefore the factories must be made more efficient, inventories reduced and waste should be eliminated.
What would fit best to eliminate waste? Of course Lean!
In China Lean-Culture is not applied in a lot of companies, which I visited.
Why is Lean important for companies in China?
As the extended workbench of western markets, Chinese companies were in a very comfortable position - but they are now feeling the pressure of the globalized economy and competition in the domestic market. Chinese companies that learn and apply the Lean concept can compete better. The others will probably disappear from the market.
What role does lean management play so far in China?
Only a few Chinese companies already understand the idea of lean management. As long as business leaders and owner are not prepared to accept change and drive it forward, it is unlikely that employees will try new ways or innovate on their own. The most difficult challenge is to convey the principle to the senior management of large corporations and the owners of small and medium-sized companies - above all the two concepts of learning by doing and doing by leading.
What should companies focus on in lean management with regard to the Chinese manufacturing sector?
Companies should focus on training employees on problem-solving skills. Chinese workers are used to delegating tasks from management. It is a management task to raise the understanding of the problem among employees and to encourage colleagues to try out their own ideas for improvement.
To enable manager and employees for problem solving it is necessary to train them in key competencies.
In China, lean projects have to be ordered from above:
1. Change to lean production is expected by employees as a top-down initiative.
2. Clear rules and objectives are the key to success.
3. Measurability is more important than in Europe.
4. Standards must be set, demanded and permanently monitored in their compliance.
If these requirements are met, the implementation often overtakes comparable lean production projects in western countries.
Lean Best Practices is our guide for Lean Deployment.