Here are some steps in the LM process to consider for your business if you are contemplating taking a hard, real look at how you operate, function and plan to get better using Lean tools:
Step 1: Leadership and Commitment
Buy-in, championing and supporting the effort from the top is essential. Decision-makers have to back up what is being planned and visibly support the improvement efforts and projects. Without this support, companies will often, quickly and soon revert back to old habits and sustained change will not be possible or feasible.
Vision and direction has to come from senior management as well.
Step 2: Educate and Empower: Gather Knowledge, know how and practice Lean Manufacturing
Training, fundamentals and even books, consulting and advice from other businesses that are implementing and experimenting with Lean can all help you get on your way. Both public domain courses and formal training, certification are available.
There are training programs offered by MEP’s (Manufacturing Extension Partnerships) around the US such as ‘Lean 101’
It is a priority to educate and empower, giving people the tools they need, raising awareness of lean, introducing and using a couple of the tools at a time, over a period of a couple of weeks or months, or a whole coordinated deployment or roll-out effort with resources and project plans. These are all feasible, depending on the needs of your organization and the depth you want to or feel like you have to get into.
Step 3: Making Things Visible To All and Accountability
Understanding processes, cause and effect, root-cause analysis and even being aware of waste, goes a long way to get to low-hanging fruit, win and reward right away. Any improvement for your business, ,saved dollar and lower costs are good right? Why not use lean to help you and your employees SEE and DO something about it. Try to see if you can trace the source of waste. Just walk around your operation and try to spot where ‘waste’ is occurring (recycle bins), discarded, defective product, things on the floor, cluttered areas etc. This can be A great first step. Tracing and mapping out how it got there, how severe the problem is (pages per day, waste removed or scrapped, defective unit # versus yield). Any metrics and active tracking heightens awareness of potential problems and sources, creative solutions and harnessed resources working to save money. All wonderful, without necessarily even having implemented any formal LEAN TOOLS as yet! See the promise and potential here?
This can very easily then form a quite powerful technique and general base or platform for identifying bottlenecks, excess inventory and even discontinuous flow, more advanced Lean tools to cope with and address these issues are at hand. Getting all the staff involved in these processes give you the great opportunity to motivate and mobilize your entire workforce. Imagine everyone working to saving and making money, which is why we all work and got hired in the first place … or started our own business, right?
Step 4: NOW THE TIME HAS COME! Focused Improvement Activities and Advanced Lean Tools
Map out the major processes in your business. Identify all the sources of waste, prioritize the areas you want to focus on first, where the maximum gain is with minimum effort. Always a good place to start. Take the area, process or problem apart, analyze it and see how you can make it better. Put the improvements in place and ensure that it does not happen again and stays in control should be a priority as well. Plan for the sustainability, by having a project or process champion and getting employees to take the lead and responsibility as well.
Some of the most wonderful stories, opportunities and promise lies in the fact that LM effectively brings together a motivated group of individuals/people involved in work and/or a typical process, maybe even also from other areas of an operation, combines their talents and focus on a particular issue or topic, area or problem. Next, defines and maps the current situation, cost and waste, (baseline and diagnose), set some clear objectives to change and make things better. These can be metrics or stated smart goals, measured in terms of wait or lead-time, process steps, cycle time, floor-space, inventory, and other metrics) Time-frame for improvements are set and the group celebrates the successes, outcomes and results together.
Step 4: Looking Further Ahead and Beyond
LM enables you individually, collectively and as an organization/business to get renewed momentum, continued effort and on-going improvement (what lean often refers to as Kaizen – the pursuit of continual improvement and perfection, a standard of sorts).
- Lean and speedy processes and how they affect business
Some of the lean manufacturing tools that might be able to help you in your processes are:
- 5S
- Cellular Manufacturing
- Mistake Proofing
- Set-Up Reduction
A basic, fundamental tool in Lean manufacturing that can help any business the ‘5S’ approach is an organizing, structuring technique to get rid of clutter and waste. Cleanliness and having a set place for everything is key.
The name stems from the Japanese meanings and equivalent words for…
- Sorting things (seiri)
- Setting things in a particular order (Seiton)
- Shining, daily maintenance (Seiso)
- Standardization (Seiketsu)
- Sustainability (shitsuke)
Cut costs and reduce waste by applying these simple techniques to your business today.
Cellular manufacturing has to do with organizing not the workplace only but the work as well. Work-cells and designated work- areas, certain spaces for certain activities, minimizes movement of people and things, therefore costing less. In an operational sense this means no batching, no waiting, no delays, no queuing, just smooth operation and easy flow.
Mistake-proofing (Poka-Yoke)
Built-in safeguards, reducing defects to zero is at the center of this approach. Highlighting problems as they occur, not letting mistakes, oversights and errors slip through is key. Processes are designed around this principle to be more efficient and will help you business cut down on cost, scrap and waste.
(SMED or single minute exchange of dies ) Quick and speedy change-over in business processes, manufacturing and operations are essential. Remember time and quality matters, means money! Process thinking is the key here. Getting rid of unnecessary steps, actions or movement are key. Reducing time on any line, saves money.
There is more to lean manufacturing that just these couple of tools. They just serve as an introduction to some of the major business enablers that LM can bring to your business and organization.
Improving quality and speedy delivery rates are any company’s priority. Making and keeping customers happy is what it is all about. LM offer you the tools to do that practically, quickly, easily and consistently.
You can not change what you do not acknowledge or know about. Lean Manufacturing brings with the appeal and awareness to ‘take note’ and notice things around you (cost, waste, movement, clutter, scrap etc.) and then DO something real, meaningful and constructive about it!
What improvements should and could be made are both important questions to ask, prioritize and act upon. Customer priorities, things that affect your incoming revenue should get attention quickly and first. Things like quality, lead and waiting, cycle time, cost, inventory and other internal processes that affect the customer and are ‘internal’ and controllable, should be dealt with expediently.
In order to get you started asking the right type of questions could provide you with hints as to a strategy and starting point/priority:
- Which process or step should get the bulk of our immediate attention –where is the biggest WIN-WIN for both the customer and the company?
- What are all the priorities that we need to pay attention to in this organization/business and operation, map the processes and make the list. Then ask in what order you should tackle the priorities?
- How do we get the BEST improvements the quickest way? How do/can we tap into the benefits of LM right away?
If reducing overhead, quality costs and inventory to save money, reduce weight and be a smooth operating, streamlined and cost-efficient provider are keys to your business success, LM can help your business in all aspects and areas.
Taking the theory of LM to the practical implementation will take planning, patience and persistence. Determination, detail orientation and discipline. We often refer to these as the THREE p’s and the THREE d’s to make them easy to remember. Gradual, planned, focused effort is what it is all about. Step-by-step instructions and actions to get to improvements over time, that can be sustained, stable and predictable are essential.
If any of the following scenarios are important to your business, LM can help you reach targets and goals in this area that you set for you, your team and your business:
- Increasing operating margin and revenue
- Reduce manufacturing lead, wait and cycle times
- Lessen WIP or work-in-progress inventory (half-completed product), time and space costs money! Reduce costs
- Reducing manufacturing overhead and quality costs
- Increase gross profit margin
- Get customers what they want, when they want it, anytime, every time and all the time, quickly and correctly, affordably and on-demand.
- Achieve consistent quality and low defect rate (scrap/waste)
Make the most of your shareholder value and you can not go wrong. Achieve high levels of improvement rates and customer satisfaction, quality products, low costs and do so quickly and you remain competitive and profitable.
Get and keep your processes under control and improve getting better all the time, setting and positioning yourself head-and-shoulders above the masses and mediocrity. Help define and execute your competitive edge with a well-thought out, supported, gradual deployment, throughout or LM in your business and you are set for desired outcomes, success and results!
Having a very real measurable impact and resulting dramatic improvements in your business listening to your customer complaints can give you great hints as to where some of the problems might lie. DO NOT hesitate to ASK them! They will tell you. It is a wonderful opportunity and channel to let your customers know that what they want, say and need, REALLY MATTERS. If you provide this level of responsive personalized business, you will have success, not only now, but also, in the future.
Slow and inefficient processes, finished goods just sitting around or waiting for things to happen all cost money. Finding ways to cut down on these is the challenge and opportunity that LM brings to your business. This is oftentimes referred to as the so-called ‘hidden factory’ or unseen cost of ‘doing business’. Once you put a number on it and are aware of it, you will benefit from ways to reducing it or eliminating it, adding to your bottom line and cutting down on cost and waste. That is the heart and purpose of LM.
Getting rid of things (even internal process steps, time and inventory) that add NO VALUE TO YOUR CUSTOMERS is a TOP PRIORITY TOO! The costs of poor quality products, services and waste add up over time and could cause you the loss of loyalty and potential repeat/new business. Really taking issues with these aspects can save you money, time, ensure quality and customer retention, satisfaction and more business!
Customer want to do MORE business with a provider that is reliable, quick and affordable, stable and predictable.
If you set certain targets in certain areas of your business and work diligently towards them, the results will be evident quickly and these changes will ‘stick’ and be sustainable over time, which is what you are really after.
Ask yourself how long it takes you to get your product and service out the door and in the customer’s hand. Seconds, minutes, hours, days, weeks. Asking the question is important, raising awareness. Putting a number to it, makes it visible, measurable and enables you to do something about it! For example cutting it down or in half!
Any and all processes within your business are fair game! No exceptions. It does not only have to be manufacturing processes. Other examples could easily include: product development, order entries, design, customer service, HR and financial processes as well.
By taking this ‘overall’ holistic approach to improving your business in all areas and aspects, means you are in effect adding value to your business, growing your profits and bottom line, while streamlining and becoming a smooth, low-cost, predictable partner and provider of choice!
Taking an analytical approach to business in this fashion opens your eyes to new channels and ways to grow and expand, strengthen and position your business for success and results.
Ask the following questions to ascertain if LM is right and holds potential for you and your business:
- Where is the real ‘time’ in our business spent? How much of this adds value to our customers? Is it worth it? Where can we make some changes?
- Is there any benefit in our business trying to establish a competitive edge getting goods and services to customers quicker?
- What kind of payback can we expect from these LM efforts? What are the financial gains and potential here?
- If we cut operating expenses, manufacturing cost, overhead, inventory, lead, wait and cycle times, how would it affect the bottom line? What would the $$ impact be weekly, monthly, quarterly, annually? Again these metrics will help you gage your progress, raise awareness and give you a whole new outlook on what your business is doing well and where the areas for improvement would/could be!
- If we reduce our goods in waiting (WIP) and finished goods inventory what will that mean in $$ and cents to our business? What would be able to do with the cash at hand (investment, debt reduction, new machinery, marketing etc.) How can these changes and dollars save BEST benefit and grow the business?
In any LM deployment and change management, improvement initiative in your organization/business, there are enabling aspects to pay attention to:
Some of the operational and economic benefits or metrics to look out for to help you answer some/any of the above are:
- Operating margin
- ROIC (return on investment capital)
- EBITDA
- Capital Turnover
- WIP
- On-time delivery rates and ratios
- Cost of poor quality
- Quality performance, customer satisfaction data
If you have your eyes set on the top-spot in your industry, expanding your markets and horizons and increasing your market share, this is the way to go about it quickly, reliably and with sustainable gains.
There is a simple rule of thumb here, central to all LM as well – any improvements made within your business should benefit the customer and add value.
LM succeeds in making the time, quality and cost issues within and between processes, start to finish, steps etc. visible and tangible. It gives eyes and ears to these processes, outcomes and allows you to do something meaningful and intervene to make things better, to the benefit for company and customer! It provides, ,purpose, direction, baseline and practical means to get your results and effect changes for good.
Seamless operation ,less bureaucratic, ’lean’ , streamlines and effective processes make business successful. This overall business methodology and thinking will help you re-make, energize and shape your business better. You are now pro-active and hands-on in your operation, NOT LEAVING SUCCESS UP TO RANDOM CHANCE, BUT RATHER PLANNING AND EXECUTING FOR IT.
Agility, adaptability, low cost and responsiveness are all qualities that business should have and desperately need almost as prerequisites and entry-requirements for doing business in the new economy.
One of the great contribution that LM can/does make to your business is what we will call ‘shared purpose, direction and goals’. This individual and mutual ‘orientation’ and ‘coordinated effort, gives common direction to all, fosters commitment and camaraderie. It strengthens and builds the organization, links the leaders to the shop-floor employees and engages everyone at all levels to achieve better performance consistently. It is a unifying and motivational principle that will underpin and build your efforts, getting you results quicker and maintaining it over time. Making success stick, so to speak.
So, ask yourself first and foremost how you think LM can help you in your business, consider your options, pros and cons or doing/not doing it and then make your decision.
Enable and strengthen your business by using LM tools to drive improvements, cost reduction and implement it across the levels and aspects of your business that matters most and reaps the highest rewards quickly.
Other aspects of lean to consider for LM deployment in your business are as follows:
- Leadership
Initiative and leading by example from the top is key. The main flag-bearer and champion of this LM process and initiative starts with the business leader (CEO/President) and the senior management team. Buy-in and support can make or break the efforts of LM.
Personal, hands-on, practical engagement, commitment, practice and even reward for full participation in these initiatives, being the drivers of performance per se is critical to and for LM success. Inspire and mobilize others.
Corporate, business culture and infrastructure, support and championing of the LM efforts contribute to the momentum and success of it throughout the organization.
Include and engage EVERYONE! LM provides you the opportunity to harness and leverage the talents of the entire workforce and collective, not merely a hand-full of individuals or some employees. MAKE EVERYONE COUNT AND CONTRIBUTE!
If lasting results and sustained top performance matters to you and your business here are the means
to that end in the LM toolkit!
Metrics and goals make things easier to achieve and practically act upon, effect, change, impact, reshape etc. MAKE EVERY ASPECT OF YOUR BUSINESS COUNT!
- Infrastructure, support and deployment
Share the commitment, discipline and persistent toil to get to where you need to be. It starts with everyone, not just some! Have you customers front-of-mind at every step, process and corner of what you are doing, planning, improving, know what they value, why and how to get it to them quickly, effectively, consistently and affordably, anytime, every time! SHIFT YOUR FOCUS.
Shareholder value and $$ impact is a good guidelines for priorities and activity within LM. IMPROVEMENTS CAN/SHOULD BE MEASURABLE AND ACTAULLY TRACKED!
Engage everyone in the process, assign roles and responsibilities and tap into the full potential everyone has to bring to the table. Committed resources, time and training (initial investment) will pay off quickly. Mobilize your workforce and enable, empower and energize them.
- Vision
Making it all about our customers is another key. They are your incoming revenue streams, what keeps the wheels of your business churning. For once, make it count! Quality, time, what they want, when they want it can make you fail or success. Reducing variability is essential. Be consistent, predictable and reliable as a provider and/or supplier, business partner and make what they want a priority. Never merely focus on reducing defects, also know why you are doing it and how it adds value to your customer(s).
Everyone has to understand this mutual undertaking, its value and potential and the role, contribution and recognition of their efforts and input.
- Right resources and projects
Having dedicated resources working tirelessly and exclusively on LM type processes and work, improvements and projects will have desired outcomes and effects. For meaningful performance improvement you need the right people and the right projects, working on the right value-added things within your business. Focused, deliberately targeted WORK is essential for results and success.
- Teamwork
IT IS ABOUT EVERYONE’s ROLE AND RESPONSBILITIES. ALL MATTER. Leaders, shop-floor, administrative, all staff can contribute and make a difference. Leaders often mount the charge and get the ball rolling, providing support and encouragement along the way. Direction and results matter here. Full-time sponsors, champions and process leaders encourages accountability and gets results quicker. Problem-solving leadership, training and coaching might be required to, grunt-work, data collection and analysis and support. Investment in time and resources is well worth the effort and cost. It will reap you rewards you can only imagine when starting out. It will exceed your expectation in as little as 1 year! YOU WILL START SEEING RESULTS EVEN QUICKER THAN THAT!
- Process and Tools
Tools and culture go hand in hand. You need both. So jumping right in and just focusing on implementing some key LM tools, might not be the most appropriate and/or effective way of unleashing the power of lean on your organization. Getting the support and infrastructure in place up front, planning for success, resources etc. might save you lots of time, money and headaches down the line, when it comes to actually doing the work and making the improvements!
PUTTING LM IDEAS INTO ACTION TAKES TIME, DISCIPLINE AND PLANNING.
Planning for success in any LM deployment is essential. Having metrics to measure certain things (the right ones too!) have to be paid close attention to. Infrastructure and support put in place and everyone prepared, trained in what the LM paradigm is, what the tools to use are and how to use the tools exactly have to be considered as well as part of your overall plan of action, if you do choose LM for your business.
- Making it the way you do business
LM is NOT only about PROJECTS! It is about so much more than that. It goes deeper and beyond. It is and will become the way that you do business. Everything we undertake in our businesses have to start with the customer, who they are, ,what they want and how we can get it to them quickly, correctly, in working order, what they asked for exactly and to specification, ,on demand, at an affordable price, delivered and guaranteed. Sound like a tall order? Well, increasingly research shows informed, empowered customers know and get what they want and to stay viable, let alone be profitable and thrive, we need to have our businesses in line with delivering to all of the above in a cost-effective and streamlined, efficient way. A good plan of action, the right culture and voila you are all set to start your deployment of LM and unleash its power and reward on your business, profits and customers!
Now that we have determined that LM can actually help you eliminate waste, time, effort and material, is customer oriented and just-in-time delivery of what they want, reducing costs while improving quality, we can briefly switch gear and look at areas of the business where LM can help you and your customers.
Areas where Lean can help:
Making the most of quality and time, speeding up processes actually matter. It does make a difference. Wait times, cycle times from start to finish all impact business success. LM is not just for manufacturing processes. It is for ALL PROCESSES.
Knowing where to focus your efforts are also important. The 80/20 rule of thumb in LM is a handy tool to help you prioritize and focus on what needs to get done right away, first, eventually, over time. 80% of the problems/potential is in 20% of the process, area or dynamic. It is up to us to find it and do something about it!
BOTH manufacturing and transactional processes can benefit here
- Supply chain acceleration and management
- Logistics
- Manufacturing
- Design Processes
- Transactional
- Other
So far, we have discovered that LM is:
A business management philosophy and paradigm that asks for a shift in the way that we think about and do business
It clearly stems from a proud history and grounding in the quality movement (of more specifically Japanese automakers, before spreading to Europe and the west). TQM or total quality management initiatives and Toyota’s early Production System put quality, time and cost, waste in the spotlight and clearer focus.
Getting rid of the main sources of waste in business, means paying attention to things like:
- Over-production
- Wait, lead or cycle times (start-to-finish)
- Transportation
- Processing
- Inventory
- Motion
- Scrap
There are some great tools in the LM toolkit of which we mentioned FOUR initially to get you off to a good start.
The logic and rationale behind the premise and argument for LM states clearly by reducing the waste, you are improving quality. As production time is lowered, costs are lowered.
Kaizen – a Japanese term,(constant process focus on getting better) is at the very heart of LM.
LM can be helpful in many processes throughout your business, including BOTH manufacturing and transactional processes. Some, any or all of the processes involved in your business can be included in your LM deployment and initiatives.
The key lean manufacturing principles can be identified as:
- GETTING IT RIGHT THE FIRST TIME WITH NO DEFECTS identifying and solving problems from the source, quickly and as they happen
- NON-VALUE ADDED ELIMINATION and OPTIMIZING ALL RESOURCES AT YOUR DISPOSAL
- KAIZEN or ON-GOING CI or Continuous improvement as it is also known, keeping on raising the bar of performance and excellence in your business. This can be done through LM focusing in on reducing costs, improving quality, increasing productivity and better information sharing, streamlined operations and great teamwork, focused, targeted process improvement.
- CUSTOMER-demand drives activity in a pull NOT push system and inventory, wait times etc., effectively trimmed and cut down (even eliminated where possible).
- Adaptability, agility and flexibility efficient, quick without giving up on quality.
- Extending these efficiencies and efforts to your supply chain and other business partnerships in a collaborative effort, building relationships that fit, work and last.
It is like having a recipe for success to succees in the new global, fast-paced, technology enabled and driven, highly competitive marketplace and economy. Using the LM way and tools better enables and empowers you and your business to not only succeed in this environment, but flourish and thrive!
Its history and future is built on the premise that wasted, time, space, energy, effort, money and poor quality all cost money and should be made visible, dealt with and eliminated. Working quicker with less effort and waste, being efficient, consistent and with the minimum amount of waste, unnessary movement, cost and time, LM quickly sets you up for success and business improvement. It is about more than merely focusing on manufacturing processes. There is more to the philosophy and methodoly than meets the eye.
Think of innovative ways to cut costs in your business and operation without risk to quality and customer. Eliminate trim and unnecessary process steps, cheaper alternatives or costly extras that are not really deemed necessary. Shared utility or tools are a great way to minimize expenses, set-up and overall costs. Make the most the resources that you do have available.
Take a closer look at the materials and processes you and your team use everyday and try to spot the as is process. Do a reality check. See the costs and waste, put metrics to things, raise awareness of what could be done differently, more effectively and cheaper.
Sometimes process steps can be eliminated or combined to get to a result quicker and use resources, time, quality better. Standardization goes a long way to cut down on waste. Tweaking and adjusting machines for no apparent reason other than routine and habit should be stopped and taken a close look at. Reuse, reduce, recycle comes into play. More effective materials and process steps that take less time will often help your business out too. How technology, automation, outsourcing etc. can save you and your customers some time and money.
Taking actions to correct certain aspects within your business, rid it of waste, expense and streamline processes for optimal function and ultimate success is what LM is all about.
Learning by doing and hands-on involvement is a great by-product and enabler of these processes and initiatives. It engages and energizes. It sparks interest and builds involvement and action. Make changes, review the results and adapt if nececssary, celebrating your success, looking for new opportunity summarizes this ongoing cycle well.
Here is an easy way to remember some of the fundamental practical things you can do right away in your business, applying LM tools:
By effectively focusing on improving the efficiency of any underlying processes, improving performance, you will reap the financial rewards. It is like having measure and ‘proof’ of your success.
Bringing science, intuitive and creative problem-solving, analysis and scrutiny to business processes you increase the handle you have on the unfolding events, steps and outcome. It drives the performance excellence of your business to new heights. LM will get you there. Combining this approach with the discipline and rigor of process management and business process improvement tools like Six Sigma, increases the impact and effectiveness.
Three pillars of strength for both these business approaches are: (i) customer focus, -centric and directed activity, value-add process and outcome (ii) Effectiveness (iii) Efficiency.
Giving customers EXACTLY and MORE than they wanted, exceeding expectations are important. What is your niche and specialty that makes you stand out from the crowd?
Again some self-diagnostics from the LM toolkit to help you out here regarding assessing your own business and readiness:
- How can LM help you establish, identify and communicate that competitive edge to your business employees, partners and customers?
- How successful are your products and services in securing ‘clients for life’ and repeat business? How strong is your brand?
- How do you currently minimize costs, cut expenses and deal with waste?
Another important concept in LM to grasp, understand and utilize is KANBAN (another Japanese-inspired term). LM or just-in-time manufacturing, on-demand production, meaning sign or card. Signals or visual cues are used, when products, parts or services are required by customers. The system is reactive and takes advantage of the ‘flow’ conceept. On-demand solutions for operations, production lines and manufacturing facilities are suggested and preferred, due to the fact that having inventory pile up costs money, time and quality, better spent elsewhere. (Retrieved from “http://en.wikipedia.org/wiki/Kanban“)
Yet another eseential LM tool and utility to consider is something referred to as Total Productive Maintenance. This is different from routine or occasional maintenance that has to be performed. Having no downtime and scheduled maintenance, pro-active planning for and working with it, as opposed to a more passive-responsive approach is recommended in the LM philosophy and practical application. It is often depicted as “deterioration prevention”It is NOT FIXING MACHINES WHEN/IF THEY BREAK DOWN. There is more here than meets the eye.
Equipment must be ready at any and all time for operation. The equipment should be able to provide us with efficiency on demand while running and provide quality service and output that can be relied upon.
Overall Equipment Effectiveness or OEE Uptime and and throughput are the three key metrics we use to track and gage how the maintenance tasks are going and what should be done, when and next to keep them all humming and working effortlessly, seamlessly indivudally and together. Mistake-proofing is important too, reducing the variability and increasing the process capability, the ‘baseline’ and means to and end (namely the machines and operation overall) have to be well taken care of.
So, we have provided numerous examples and reasoning for why LM will be good for your business, regardsless of size, developmental phase, partners, customers, size or current level of performance. There tools can help you move your business forward.
(source: www.beyondlean.com)
An underestimated factor in all LM deployments is the underutilized talents of our collective and collaborative potential. We oftentimes get so busy with what each of us are doing individually, that we lose sight of how much more powerful we could be, if we combined our efforts!
In our opinion, here-in lies the secret of LM …
