8th March 2021
The future of manufacturing is Lean. Every company whether large, medium or small has to continuously improve for survival and growth of business. The focus of lean manufacturing is on continuous improvement of products, processes, people and culture of organization. In this blog, I will try and address a few basic questions on why you should consider going Lean.
I keep hearing so much about Lean Manufacturing but what is it exactly?
Lean manufacturing is a systematic, continuous improvement approach that concentrates on creating value for customers and wealth for the organization. The core concept of Lean is to maximize customer value while minimizing waste. To accomplish this, it requires “lean thinking” that changes focus of management from optimizing technology, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.
Lean for Production and Service : A popular misconception is that lean is suited only for manufacturing. Not true. To “think lean” is to switch from quantitative to qualitative approach. After becoming accepted in the manufacturing industry, lean is increasingly being applied across other sectors from healthcare, retail stores, and banks to offices, call centers, hospitals, and government departments. Lean applies in every business and every process; manufacturing, services, software, healthcare, education, government service etc. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization. Lean applies in every business and every process; manufacturing, services, software, healthcare, education, government service etc. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.
What is the Goal of Lean Manufacturing?
Lean manufacturing is described as a systematic approach for identifying and eliminating waste in operations through continuous improvement. The goal of Lean manufacturing is; reduction or elimination of waste generated in every process of value stream; right from customer order placement-production-delivery to cash collection. One simple metric used to make company Lean is ‘Shorten the Lead Time’.
What is Waste?
Waste is defined as any business activity that absorbs resources but adds no value. There are eight kinds of waste; Defects, Inventory, Waiting, Transportation, Processing, Motion, Overproduction and Untapped Human potential. The cost of waste in manufacturing process is estimated to be in the range of 15- 30% of annual sales turnover of your company. Can you guess how much money is lost by your company in for of waste?
How Lean Manufacturing is different to my current way of manufacturing?
Manufacturing methods can be broadly classified into two generic categories; Mass Production (batch & queue concept) and Lean Production. Majority of the companies are producing with mass production paradigm based on ‘economy of scale’, whereas lean production paradigm is based on ‘economy of flow’. Mass production was relevant in 20th century when it was ‘supplier’s market’: demand was more than supply. As on today, in 21st century market scenario is totally changed to ‘customer’s market’: supply is more than demand, in order to have more profits, the production should be based on “economy of flow”.
My company is not a mass producer; it is not making a high volume of end products. Is Lean still applicable to us?
In fact almost all Indian companies (with few exceptions) are working on mass production paradigm, irrespective of whether they are small, medium or large-scale enterprises. All business processes have value added and non-value-added components. This holds true whether the process is located at a mass-producing manufacturer, within a job shop, or at a service-oriented company such as a health care organization. The lean practitioner’s challenge is to appropriately apply the tools and philosophies of the Toyota Production System (TPS) in order to identify and eliminate these non-values added activities (waste) so that overall lead-time is reduced.
What is a Lean Promotions Office (LPO)?
In order to systematically implement lean principles within company, it is very helpful for a single individual be tasked with leading the lean implementation program on a full-time basis. This experienced manager heads a so-called Lean Promotions Officer or Lean Champion and is tasked with responsibilities such as:
• Function as leader for the company's lean implementation
• Act as a liaison between Consultant and the client to ensure efficient knowledge-transfer.
• The first person trained to manage Kaizen events and is expected to lead their own Kaizen events
• Set the implementation plan and ensure its execution.
• Is responsible for developing and executing a company-wide Lean training plan
• Acts as liaison between the shop floor and management. Ensures that Lean goals align with the company's strategic direction and objectives
• Measures savings from accomplished from each Kaizen workshop and communicates these with accounting
What will be focus of Lean Implementation in an SME ?
The Lean Consultant will focus on improving the following five areas of every participating unit:
• People Development through Education & Training,
• Workplace Improvement through training & implementation of Five S & Visual Management Techniques,
• Waste Reduction through process improvement using Value Stream Mapping, Kaizen & other Lean Tools,
• Improvement in equipment health and;
• Introduction of Lean Management System to plan, implement, monitor and continuously improve the processes, people and culture of organization.
What are the benefits of Lean Implementation to me (every employee)?
In fact, future of Manufacturing is going to be Lean.
Those companies that will not be able to eliminate waste, cannot remain globally competitive. Either companies eliminate waste, or are eliminated from the market. Waste elimination can be made possible only by those employees with knowledge, skill, and experience of learning, implementing and practicing Lean Tools & Techniques. There is (and will be) great demand of competent professionals with Lean Implementation skills. Lean Implementation in your company is providing a unique opportunity to you (and to every employee) to add value to their personality, professionalism and managerial competence which will certainly help them to boost their career within the company and industry. Lean
competency will definitely make you unique professional with special skill.
Why should my company go for Lean?
Every company needs to survive and grow in the competitive environment. If you want to survive and grow today and in future the “lean manufacturing” is essential for your company. However survival is not compulsory for every organization. Choice is yours: whether you want to grow in the global market or want to disappear from the business!
About the author
Akhilesh N. Singh is a lean management consultant, trained in Toyota Motors Japan and Lean Enterprise Academy UK. Author of 15 books on Lean & TQM. Associated with Tata Steel for for education of Lean Manufacturing, TQM and Global Best Practices to ECA and SME customers through a series of webinars, training programs and workshops.
Author: Akhilesh N. Singh, Lean Management Consultant
Date: Tue, 9 Mar 2021