Lean Manufacturing Implementation - The Facts

"Lean Manufacturing or Lean Six Sigma Success depends on much more than just Lean or Six Sigma Tools"

A lean transformation can enable operations to drive the overall business strategy, through the creation of many tangible business benefits. Quality may increase through improved process yields and reduce scrap and rectification costs. Cost improves through reduced conversion costs, improved cash flow, and higher return on assets. Delivery can improve through shortened production lead times which more flexible operations that can respond quickly to changes in customer demand. Despite attempts, most businesses have not been able to capture or sustain the benefits of a lean transformation. Lean manufacturing represents a fundamental change and most businesses have pursued change in tactical, rather than a strategic manner. Most failed lean transformations can be attributed to lack of true senior management commitment and understanding of the change process. Moreover, the methodology of many companies is to rely on a series of quick-hit approaches that deliver short term benefits, but aren’t sustainable in the longer term. Add to this the reluctance of many companies to consider the business as a whole rather than just concentrating on operations or manufacturing and you have a recipe for failure. PRECONDITIONS FOR A SUCCESSFUL LEAN TRANSFORMATION There are a number of preconditions for an organisation to succeed in a lean transformation. Your organisation must possess each of the following attributes before successfully embarking on a lean transformation. Will the top management on site: 1. Actively participate in lean production activity on a regular basis? 2. Commit to no redundancies as a result of lean production activity? 3. Modify shop floor payment methods, if necessary? 4. Modify roles and responsibilities of personnel? 5. Spend money on justifiable changes to the production system? 6. Allow production personnel involvement in lean activity during normal production time? 7. Systematically review project activity on the shop floor? 8. Offer focused maintenance support in the pursuit of a model value stream creation? 9. Enforce company policy? 10. Provide appropriate resource for the programme? 11. Be willing to make sure company measures are compatible with lean? 12. Communicate the compelling need? 13. Encourage a cross-functional approach to designing systems rather than processes? 14. Commit to a long term programme of lean manufacturing? 15. Be prepared if necessary to make fundamental changes to organisational structure? 16. Fundamentally, will the managing director or most senior person on site be willing to change the way he operates, becoming a champion of change and drive in the transformation through active involvement in ‘Go, Look, See’ & Process Confirmation activities. Will he set up and chair a ‘Steering Committee’ to ensure best practice is transferred across all functions?

Key concepts The key concepts of “lean thinking” can be applied across any industry, and are described below. Integrated approach Lean manufacturing aims to align all function with the common goal of reducing overall cost for the business, rather than each function attempting to reduce its own costs in isolation. Thus, the manufacturing system is inherently stronger than a traditional system where different departments pursue their own objectives independently of one another. A true lean transformation necessitates that all functions understand the application of tools and techniques within the manufacturing system. Elimination of waste During the lean transformation, all functions aim to eliminate waste in a manufacturing environment. Waste can be defined as anything above the minimum resources required to complete an activity. Wasteful activities only add cost to a product; they do not add value. Hidden becomes obvious As wasteful activities are eliminated from a manufacturing system, the true root causes of problems become visible. Previously, the waste hid these causes. As an example, a large amount of inventory after a process may have concealed the true problem of the process – long changeover times. These long change over times would have necessitated producing in large batches. Order out of chaos As problems become visible, the root causes must be solved to fully eliminate the problems. As problems are solved, then the manufacturing system becomes more consistent and predictable. Yet, many traditional organisations are often engaged in a “fire-fighting” mode because company systems fail in the face of variability. To react to this variability, such as a change in customer requirements, additional resources are often brought into processes to “keep the show on the road”. However, a lean system will adjust efficiently to this variability, helping to bring order out of the chaos. Standardisation and continuous improvement As a manufacturing system becomes more consistent, then standards can be developed to ensure that the improvements are maintained. Once standards are in place, they must be continuously challenged in a bid to make further improvements. Striving for continuous improvement is referred to as the Japanese word, kaizen. Ownership As standards are created, then ownership of particular processes can be transferred to those closest to the process itself. Experience has shown that a lean manufacturing system can only be successful if its ownership is devolved to the people who actually operate it.

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