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  The Purpose and Benefits of Implementing Lean Manufacturing

Some participants to my conferences and presentations have asked me to explain: 

"What would be the main purpose or benefit for my company to Implement Lean Manufacturing?"

My answer is always one simple word: "Survival."

Indeed, each of the Lean Manufacturing Strategies provides a set of solutions to the most common traditional problems manufacturers and services providers face every day. Unfortunately there has been a terrible misunderstanding of this particular issue. 

Some pseudo-"experts" see Lean Manufacturing as a complex set of tools and disciplines that need to be implemented as a "package." This false assumption has caused some companies to embark into enormous burdensome, slow, and costly efforts with little ROI - Return On Investment. So here we would like to address the fact that nobody needs to go into "deep sea" in order to enjoy swimming. Not even Toyota has ever applied all the disciplines in all of their areas or operations. We strongly recommend that each case be treated with the uniqueness it deserves so any effort pays back big time and ASAP. Perhaps that is the best skill a good consultant must provide to the customer.

We know many companies have been healthy and wealthy for a Century or more. Good administration, nice niche in the Marketplace, people need their product, few or no competitors... though  we will find fewer of those privileged situations all the time.

The reality today is quite different. We are seeing the American Automobile Industry literally vanishing in front of our eyes. The same happened already to many other industries where American companies were in the pinnacle of Global success. 

 

So the near future will only support those who are willing to learn new tricks and open to mindset adjustments as we have analyzed in many other of our articles.

The purpose of Lean Manufacturing

Just as many spectacular innovations, the initial movement of Toyota was triggered by limitation of resources. The first resource that showed to be quite scarce in Japan is "Real Estate", so actions were taken to minimize the need for space in the work stations. They discovered for example that more than 50% of the space in the traditional manufacturing operation at most manufacturing facilities in America and all over the world is used by parts, materials, tools, boxes, pallets, and other objects that do not have any practical and immediate use in the station.

Utilization of Space

The presence of such unneeded items is definitely a barrier to efficiency and the reason for most Lean Manufacturing Implementations will begin with The Classic of Classics: 5S 

At this time we will start by creating a Culture in all the associates (including Management of course), so the old principle of assuring production by accumulating raw materials in the workplace is now gone. The remedy: JIT -  Just in Time, a timely logistics process to bring into each area only the materials and parts required for a smooth short-period of operation. JIT is the accurate supply of the right items at the right time in the amount needed in the right spot. This drastically diverts from the traditional concepts of: centralized  "warehouses", tool rooms, piles-ups or large boxes of components, operators running all over the place trying to get their tools, parts, and materials and sometimes having a hard time to find them!

Of course JIT is not always the solution. It works very well in assembly lines like the automobile, furniture, appliances, and electronics industries. Some garment factories have started to implement it as well.

It requires the coordination of efforts from the supply chain and to that purpose the relationship is transformed from the traditional "customer-supplier" to an authentic "partnership", and it is not an easy task to develop such transformation, though with time, everybody benefits from the new way of doing business.

A characteristic of this transformation is the POUS Point of Use Storage. This process germinated from the observation that the Japanese did at a Safeway supermarket in the late 70's of the past Century. It consists of the 

Inventory Reduction

An immediate reward after a good JIT process is established is the drastic reduction of inventory and its faster turn around! It is typical to bring business that had in average one or less turns of inventory per year to a several times per month turns! Of course this is tied to the sources of material. Now a days there are so many imports that it is difficult to schedule a precision delivery schedule for them.

Anyway, it is critical for every associate at all levels to understand that Inventory Is NOT Wealth, as it was the belief in the past. Inventory is a tremendous burden. We must think "supermarket" here. Our business is to utilize, assemble, transform the materials but not possessing them. Many Lean companies are getting to understand this and using consignation deals with more frequency all the time. Here is where the good relationship with the suppliers comes very handy. Toyota has reached unbelievable deals through mutual loyalty with their supply partners. Some of them have increased the level of service to the point that they perform several deliveries per day in the point of use of the parts and materials.

We are seeing now more purpose for the Lean Manufacturing implementation, right? The advantages and benefits are equally obvious.

We will keep adding to this site some new articles to explain all the other strategies, meanwhile I would recommend that you use our Google Search Boxes in most of our pages to find the subjects of your interest...

Thank you!

 

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