Is Centralization Anti-Lean?

The disperse facets of lean

“To effect the economies, to bring in the power, to cut out the waste, and thus to fully realize the wage motive, we must have big business – which does not, however, necessarily mean centralized business. We are decentralizing.”

--Henry Ford “Today and Tomorrow”, 1926

Is your organization truly trying to get lean? If it is, then it must be struggling with the concept of centralization. It has to. The mere concept of centralization means there will be increased travel or transportation, which is one of the seven deadly sins… oops… I mean one of the seven process wastes.

Centralization also implies big and powerful, at a central location. If one must go to a central location for stuff (e.g., paper, information, processing, materials, parts, prints, meetings, policies, permission, approvals), doesn’t this mean the stuff is not at “point of use?” Point of use storage (POUS) is a common lean practice. If stuff is not at the point of use, it means there will be wasted effort in getting the stuff.

How about an example—at home?

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Comments

Centralization vs. Standardization

Hi Mike,

I think you hit the nail on the head in terms of needing to standardize vs centralize.

What companies need is a QMS software system that the "Main Office" can set up the way they want in terms of standardization, companywide procedures, terms, etc that can then be duplicated to lower levels so that they get both the control and efficiency of standardization, the speed of electronic approvals, but individual business units can then run with the system in terms of the continuous improvement process that needs to be driven and managed as close to the process as possible. At least that's how Toyota came up with all those great lean techniques, rigtht? Getting managers to "go see" the process and drive change by tapping into the ideas of the people close to the process?

Ideally the Quality Manager at the corporate level could easily log in and run reports on individual subsidiary systems over the Internet, and work with the software vendor to add reports and features as improvement opportunities are uncovered since local managers will be contributing to the continuous improvement process now that they have their own system to work with, and the main office has a consistent tool and methodology to teach to everyone.

Of course make the system affordable and you've got a real dream scenario that makes everybody happy.

Now if only someone would build a system like that.....:-)

David Smithstein, Founder and CEO

Maybe, Maybe not

Hi Mike-

I too have the heating and air-conditioning problem you speak of always hot upstairs and cold in the basement during the summer and opposite the winter. I had a counter-intuitive moment working with some HVAC companies. Two assumptions I had were dispelled. One, that those micro-filters that keep the dirt out of the air actually inhibit airflow and make your furnace dirtier. The second that the duct system can be so poorly designed in homes that airflow is restricted. I was engaged in both untl I saw the evidence.

Many duct systems follow a standard design so we have many homes with the same problem. They have standardized to a poor design and replicated it over and over. It is the danger of standardization when we don't have purpose defined.

Centralization doesn't always have to end in waste, but the functional thinking makes it so.