CEO Business Solutions

Lean Manufacturing

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In an effort to become more profitable and improve quality and customers satisfaction, many companies are turning to a manufacturing strategy based on high production throughput, high quality, minimal inventory and a cultural focus on employee involvement. Known as Lean Manufacturing, these concepts have allowed these companies to experience profit increases of 25 percent or more while shortening lead times and improving quality and customer satisfaction.

Demand Flow Technology (DFT), Just-In Time (JIT), Theory of Constraints (TOC) and the Toyota Production Systems (TPS) are examples of Lean Manufacturing philosophies. Although there are some differences in each of these philosophies, they all share a common objective: To eliminate all waste. Waste is measured primarily in terms of excess inventory, lost time and poor quality.

Another common thread is the pull or demand-based production environment. In this environment production is triggered based upon demand or consumption versus a set production plan.

Production Controls

Most Lean Manufacturing systems use "Kanbans" to regulate production. Kanban is a Japanese word, which translates into English as a "communication signal." The Kanbans (signals) are usually a combination of cards, lights and buffer inventories. In a true Lean environment, the Kanbans (signals) are visual and are communicated in real time. When an inventory buffer reaches its preset maximum level, the upstream production operation is told to stop producing that type of part by Kanbans located between the production operations.

Kanban controls ensure that parts are not made except in response to a demand. The buffer inventory may also serve to protect a downstream production operation from any interruptions of upstream production operations, especially if the downstream operation is a constraint.

If an upstream production operation fails, the downstream operation can continue production by consuming the parts that are already in the buffer. The interruption at the upstream operation can then be corrected before the buffer is empty. This buffering technique is a key element of the Theory of Constraints (TOC).

Production Layout and Line Design

The production layout and line design are very important when adopting a Lean Manufacturing strategy. Production lines should be designed to perform to the highest required rate and the corresponding shortest required cycle time. This is done to avoid frequent and costly changes to the line design as demand increases. The production lines will not always run at maximum capacity. Instead the production lines are throttled based upon demand.

Understanding Process Flow

A thorough understanding of the process flow and work content is essential to a good line design. This includes product flow, labor and machine work content, quality checks, set-up and move times. With a thorough understanding of the process flow and work content, the production lines can be synchronized to create a continuous flow.

Work instructions and method sheets are simplified, enabling the least skilled operator to experience little difficulty interpreting the instructions and performing the task.

Employee Involvement and Training

When implementing a Lean Manufacturing philosophy, companies must not overlook the importance of employee involvement and training. Employees working in a Lean Manufacturing environment are required to be more flexible and less specialized. Formal training programs are required to ensure employees not only have the knowledge and skills to perform the many required tasks, but also the knowledge to continually assess and improve the process. Compensation programs should encourage teamwork, training and flexibility, and reward employees for process improvements.

Supplier Involvement

Suppliers also play a key role in the successful execution of Lean Manufacturing. They must be able to consistently deliver high quality material, on time. Early supplier involvement coupled with a comprehensive and effective supplier evaluation program, are significant keys to success.

Information Technology

Complex, expensive information systems are not required for Lean Manufacturing to be successful. However information technology should be deployed where there are clear productivity advantages. Some areas to consider include:

CAD/CAM tools to speed the developments of process flows, work instructions and method sheets
Warehouse and inventory management systems including bar codes and scanners to receive and relieve inventory
Supply chain management tools, either EDI or WEB based, to communicate requirements and changes in demand.

Implementation

The implementation of Lean Manufacturing is not a destination, rather a journey. Companies on this journey often find it hard to sustain because of a lack of knowledge, experience, and discipline. Consequently, Lean Manufacturing activities are often set aside because of conflicting priorities.

To avoid this pitfall, senior management must be fully committed and be able to effectively communicate their message and vision to all employees; not only through words, but actions as well. Here are a few key things to do:

Embrace Lean Manufacturing as a business strategy, not just a manufacturing strategy - Involve and achieve buy-in from all aspects of the business, including sales, marketing, finance, engineering and information technology personnel
Apply the appropriate resources - establish a core team with clearly defined roles and responsibilities, measures and accountabilities. Make sure employees are able to spend the required time on the program
Obtain and ensure early involvement of employees, suppliers and experts
Align the organization to succeed - measures, compensation, etc.
Start with a small pilot - fine tune, then rollout
Educate and then educate some more
Communicate and then communicate some more

Implementing Lean is not complicated but it's not easy either. The rewards from a successful Lean program however, make the journey worthwhile.

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