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Lean systems are great. Until they’re not.

Everything I read about the the meltdown Southwest is having this week reinforces my general sense that we have learned almost nothing from the pandemic.

By most accounts, Southwest became successful by virtue of running extremely efficiently. At any given time, they have most of their planes in the air, and most of those planes are full. That’s great if your goal is to run lean and ensure that you have very little waste in your system. It’s not so great if you want a system that is resilient, that can continue to function under load and not fall apart.

That seems to be what is happening to Southwest. It is also what happened to a bunch of systems during the first year of the pandemic. We had toilet paper shortages because highly optimized manufacturing could not adjust to the sudden switch from everyone needing the big industrial toilet paper rolls at the office to the smaller home-market rolls. We had meat shortages because highly optimized meat packing plants suddenly had half of their workforce out sick with COVID. The list goes on.

And yet we still keep building these systems that prize efficiency over everything else. Decades’ worth of MBAs and management books have held up companies like Southwest because they maximize shareholder value, but now we are shocked that the whole thing falls apart under stress and demand the government look into it.

The system is functioning as designed. The problem is that the design is bad. another weblog