Lean manufacturing: A prescriptive approach to achieving performance excellence

Manufacturers are constantly looking for new ways to accelerate productivity, increase output in their operations, and achieve sustainable excellence in manufacturing. While there is no “magic bullet” to achieve manufacturing excellence, innovation can pave the road to excellence and can be derived from various parts of an organization.

Introducing proven methodologies such as Lean manufacturing will help innovate change, streamline operations, reduce waste and improve costs — all of which are critical success factors when aspiring to performance excellence.

Why should manufacturing leaders consider Lean?
The first principle of Lean is identifying value as perceived by the customer. “Lean” manufacturing or Lean production strives to create more value-add for customers — without having to add resources. Lean methodology eliminates company waste through continuous improvement. A Lean organization recognizes the customer value, and focuses its key processes on continuously improving it. The ultimate business goal of Lean, is to provide “perfect value” to the customer through a flawless production and delivery process — with zero waste. If you supply top quality products and services on time — each and every time, you will achieve business success.

Additional business benefits of Lean include:
Streamlined processes: Lean allows manufacturers to streamline their business processes throughout the entire organization — from the front-office, all the way to distribution.

Increased efficiency and productivity: Manufacturers are able to make most efficient use of their resources — resulting in reduced manufacturing costs and time-to-market.

Improved bottom line by reducing waste: Lean practices improve the movement of raw materials and delivery of finished goods, lead and delivery times, transportation outputs, and production operations. This tighter control over waste leads to direct improvements in the bottom line.

Increased customer satisfaction: Lean’s key tenet strives to add value to the customer across all activities. Because a Lean organization will experience fewer defects and rework in products, customer expectations can be better met and exceeded.

Improved internal communication: Lean businesses require dedication, commitment, teamwork, and cooperation from all employees, stakeholders and executives.

In short, a Lean manufacturing organizations are better able to respond to fluctuations in customer demand and their operations—and do so more quickly.

What are some of the challenges when implementing Lean methodologies?
For all its business benefits, Lean processes can sometimes be challenging to implement on the shop floor. Key challenges that manufacturers may experience include:

Poor communication: Lean requires a proper communications strategy to demonstrate its value for all teams, across the organization. Companies that lack a strong communication plan will face challenges with staff adoption and acceptance, when it comes to introducing and promoting Lean manufacturing processes.

Resistance to cultural change: Organizations are often resistant to change due to the inherent unsettling nature of change. It can be seen as threatening to job security, work seniority or comfortable and known work routines.

Inadequate training: Lean has a rich and proven set of tools available for companies to utilize along the journey — kaizen events, root-cause analysis, value stream mapping and many more. Proper training of internal resources in the use of selected tools is crucial to the success of the lean journey.  

Lack of clear vision into customer value: Some organizations struggle with identifying the key value they deliver to customers. For some, it could be on-time delivery of the right product. For others it may be the ability to provide the goods the customer needs nine times out of 10 (a 90 per cent service level). Companies unclear on the value customers expect from them may focus on improving the wrong area and may lose their competitive edge.

Lack of support: Lean processes often lack clear upper management sponsorship when seen as an operations initiative driven from the bottom up. When initiated from management, organizations may see low buy-in at the employee level as lean initiatives are seen as management driven directives. The focus of Lean on continuous improvement can sometimes be seen as an added task on top of hectic daily duties on the shop floor — especially if employees are not effectively involved or included in operational discussions.

A 5-step approach for implementing Lean techniques:
1. Develop a clear communication strategy: Ensure that all key stakeholders know what is being done and when and empower them to communicate the message throughout the organization. Identify the correct communication tools applicable for your organization from: e-mail and poster boards in the kitchen for written communication to daily/weekly stand-up meetings on the shop floor or monthly board meetings. Most importantly, match the most appropriate communication method to the intended audience.

2. Foster cultural change: Effectively managed change can transform individuals and organizations for optimal performance. Deploying an effective communication strategy will thwart the resistance to change. In addition, providing team members with room to make mistakes and learn from them without dire consequences will encourage behaviour that will establish the roots for change.

3. Adequate education: Train employees tasked with implementing Lean in the tools available and coach them through the practical use of these tools. Once a comfort level has been achieved with the tools as designed, feel free to adapt them to your organization’s needs and circumstances.

4. Focus on delivering customer value: Identify the core value you bring to your customers. Ask them why they keep coming back to purchase from you and whittle down their answers to determine your key value. Focus on this throughout all you do in your organization. Begin by taking apart your bills-of-material/manufacturing to identify all processes that provide this value and work on removing ones you can which are of no value to your end customer. Then move on to other areas of the business and keep repeating the same question — does this provide value to our customer?

5. Executive sponsorship: Lean can be implemented from the bottom-up or top-down in any organization. Either approach can be successful but only if there is executive support for lean initiatives. Without this, Lean ventures cannot thrive and organizations cannot reap their full benefits.

A Lean manufacturing organization is better able to respond to fluctuations in customer demand — and to do so more quickly. In some circumstances, it may be necessary for a company to perform a complete Lean implementation practice that overhauls and replaces how the organization conducts existing business.

What is most important for manufacturing leaders to understand is that Lean implementation is a transformational process and needs to support organizational development alongside process improvement. Lean is not a one size fits all or an overnight fix. It requires commitment and the involvement of everyone within your organization — from the “top” floor down to the shop floor.

SYSPRO Canada recently hosted a webinar “The Shop Floor: Practical Solutions to Achieving and Sustaining Excellence in Manufacturing.” The webinar included special guest speaker George Barnes, Operations Kaizen Leader for Argus Industries, a leading custom manufacturer of rubber molded products, die cut & CNC cut gaskets, seals and more.  George a Certified Black Belt in Lean Manufacturing since 2012 and is driven to use the Lean tools he has learned to help him drive Argus Industries forward for success.

View this 45-minute on-demand webinar and learn first-hand how Argus has implemented Lean manufacturing to help transform their productivity and performance levels — and how they prepared their shop floor to top floor people, processes, and technology.

Darshnee Shah is Product Manager for SYSPRO Canada
Darshnee.Shah@ca.syspro.com

Darshnee has over 14 years of experience in Information Technology and specific experience in leveraging technology, to address the business and process needs for Canadian Manufacturers and Distributors. Darshnee holds a Bachelor of Commerce degree from the University of British Columbia with a specialization in Management Information Systems, and is CSCP Certified from APICS.