Lean Manufacturing: Is it Really Worth It? 16 Big Benefits Say, “Yes.”

10/13/2017 15:270 commentsViews: 153

lean manufacturing

Customer expectations of reliable quality and rapid delivery forces today’s manufacturers to either shorten cycle times or lose business. Customers simply switch suppliers when others are more capable of delivering within their preferred timeframes. Lean systems have provided a formidable operating strategy for leaders determined to achieve and maintain optimal operational systems and customer satisfaction levels. There are multiple good models for lean manufacturing operations. ISO publishes guidelines for conformance to its standards. “5S” programs are taught in some business college courses, and the SCOR model is also utilized. There are programs that emphasize rapid, or low-cost implementation. And, most models are applicable to any business size or integrated corporate structure.

Who Needs Lean Manufacturing?

A company in need of lean manufacturing practices tends to be easy to identify, typically displaying multiple of the following symptoms of operational deficiency:

  • Inventory amasses in buffer stocks.
  • Work-in-progress (WIPs) queues are jammed.
  • Information quality and flow is poor.
  • Production goals are rarely met.
  • Production schedules are unbalanced.
  • Overhead costs are excessive (due to systemic disorder).
  • Customer service performance is poor.
  • Sales forecasting information is insufficient.
  • Inventory records, product specs, shipping documents contain errors.
  • Delinquent and/or low quality suppliers remain in the supply chain.
  • There are excess inventories of some materials and shortages of needed.
  • Cycle times are unnecessarily long.
  • Operating procedures are overly-complex and confusing.
  • Unnecessary steps are common in processes.
  • Lead times are too long.
  • Backorders are the norm.
  • Product is unnecessarily moved.
  • Holding areas are maintained for excess inventory.
  • Shipping containers permit excessive empty space or product damage.
  • Employees conduct superfluous, value-subtracted activities.

Lean Manufacturing Planning and Implementation

Lean manufacturing implementation should not be undertaken until top management firmly supports the initiative and is clear that many processes will be changed. After careful planning, test implementation on one product line to demonstrate proof of concept regarding your design for implementation prior to broad-scale execution.

  1. Identify an executive who will champion the lean program, and engage in planning.
  2. Educate all employees fully on new systems to be implemented.
  3. Lay out the comprehensive designs for the new/modified processes.
  4. Develop a plan for a lean manufacturing test run in a single operational area.
  5. Set quantified goals for amounts of improvement in various facets of performance.
  6. Design your plan to be implemented in phases.
  7. Establish time-tables.
  8. Obtain full commitment from management prior to starting phase 1.

The now outmoded MRP scheduling approach too often moves inventory into stock that doesn’t reflect customer needs and cannot efficiently make frequent adjustments to accommodate variations in those needs. Consequently, unnecessarily prolonged lead times and excess inventory are used to compensate for the poor system, and compromised customer service is the outcome. Employ a system that replenishes inventories by gauging actual rates of depletion.

Migrate to lean manufacturing-friendly software, integrating departments and suppliers as appropriate to capacitate optimal flow of information and coordination of diverse activities. This is often the most challenging and expensive step in conversion to lean manufacturing operating, but the payoffs in operational efficiency, quality, and customer satisfactionmake it well worth the investment. Advanced Planning and Scheduling (APS) software can be an ideal tool for managing customer services, inventory allocations, scheduling, and other functions—eliminating countless routine hand-to-hand transfers of information that prolong the fulfillment process.

Measuring Lean Manufacturing Performance

Insufficient metrics employed by many business leaders often reflect only on areas like production labor efficiency and equipment usages—focusing inordinate amounts of emphasis on improvement in these isolated areas and failing to identify performance issues throughout the company. In addition, establishing a well-rounded set of metrics, set up self-monitoring metrics that hold individuals accountable for tracking their own levels of participation in the lean program. Conduct routine assessments. Most employees soon come to appreciate the advantages of working in a lean facility:

  • Workflow processes are smoothed as information transmission delays are eliminated.
  • Physical reorganization cuts useless steps.
  • Paper and electronic files are reordered to reduce frustrations.
  • Schedules are balanced.
  • Like-kind tasks, and those along a single route, are grouped appropriately.
  • Time no longer wasted can be applied to increasing productivity.

Supply Chain Lean Manufacturing Integration

Close coordination with suppliers is necessary to optimize your lean manufacturing program. Some suppliers may need to upgrade their own systems or processes to match your company’s new capabilities. Sharing visibility of your customers’ consumption rates transforms the supply chain companies into a unified group with a singular goal with respect to your company’s needs. Such integration affords your business exciting benefits:

  • reduced dependency on forecasting
  • enhanced flexibility to accommodate variables in customers’ purchasing patterns
  • reduced waste due to “overproduction”
  • new sense of collaborative relations with suppliers
  • and more pro-active problem solving
  • significantly reduced waste at all points in your system

Costs of Lean Manufacturing Implementation

Some capital expenditures may be necessary, but most substantial improvements from lean manufacturing are achievable with existing equipment. Decisions to invest in lean come much more easily when management views it as a strategy for increasing competitiveness, revenues, market share, profit margin and reducing labor and inventory costs. Considering that if competitors gain too much ground in these areas, it may become less clear that your company can continue to compete. The question may be whether or not your company can afford not to invest in lean operations.

Financial Benefits of Going Lean

Customer satisfaction is your money-maker. Unifying the entire organization, and linking in your entire supply chain, dramatically improves both management and staff productivity, eliminating redundancy. Excess layers of paperwork are stripped away from queues throughout the fulfillment process, and priorities are clarified automatically.

  • reduces cycle times
  • reduces needed manufacturing floor space
  • cuts percentage of reworks
  • cuts purchasing costs
  • frees up capital, strengthens the company
  • reduces production costs
  • cuts necessary lead times
  • cuts inventory costs
  • reduces costs of quality
  • increases on-time delivery rates

Being Lean vs. Claiming to be Lean

Some manufacturing facilities merely pretend to have a lean manufacturing program in order to impress customers, incurring what they view as a superfluous cost to maintain the lean façade. They have no intention to actually improve operational efficiency. They see lean as an encumbrance instead of as a true model of what they could accomplish in quality, efficiency, cost savings, and more meaningful customer satisfaction. But, symptoms of “fake lean” are often readily apparent to customers who tour, or even who deal remotely with, manufacturing facilities.

Ready, Set, Go Lean!

Lean manufacturing principles are highly valued by businesses worldwide. Today’s competitive global environment demands lean operation. Lean principles are understood to eliminate wastefulness and direct focus only on practices that honor customers and increase value in the products offered them. Lean ultimately cultivates business cultures concentrated on mutual problem solving. Such cultures empower and encourage all team members to contribute to quality operations. Facilitating communications throughout the organization and its supply chain develops a harmonious way of doing business that is very attractive to quality personnel, the pivotal resource for sustainability of the high quality production and customer service requisite for competitive advantage in the modern marketplace

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