February 2008

A lean, mean, continuous improvement machine

By Charlie Gifford

Trends come and go in manufacturing, but most manufacturers under competitive pressure to continuously improve are sticking with one trend-lean manufacturing.

Lean manufacturing methodologies are a major part of a continuous improvement business model. North American and European industries are applying it to compete with low-cost labor. Lean has to do with reducing waste in order to improve all key measures of manufacturing performance: quality, asset utilization, safety, materials management, cost, and delivery. In lean manufacturing, every person in the plant and business is a decision-maker. Each person learns to see the forming of workflow bottlenecks and waste and then knows the process to correct the condition quickly. 

Lean is not just inventory or cost reduction as quite a few American companies mistakenly perceive it. Lean is all about creating a flexible combination of organization and systems to adapt work flows of manufacturing and supply chains to the instantaneous demand requirement of the market. This means a company must be able to identify the demand state of the supply chains and the individual plant, and reconfigure their resources to address bottlenecks and waste to optimize each work order path for the highest profit across the entire value stream.

The industry has documented and demonstrated business benefits of a well-implemented lean manufacturing program. All are challenged to continuously improve based on market demand. Otherwise, the gains from an initial implementation erode over time because they no longer align with the demand state or coordinate the plant's role in the supply chain.

Another huge American challenge is consistency with management turnover. Consumers expect consistent quality across the product line. A failure to perform and deliver quality from one plant to another for one product usually results in the customer leaving the brand entirely and switching to a different provider. It is not good enough for one plant to be world class, they all have to be.

The best manufacturers apply lean on the shop floor and extend it elsewhere in the company, to practice lean warehousing, lean logistics, and the like. You can apply some lean manufacturing techniques, such as value stream mapping, throughout the enterprise. Lean manufacturing never becomes business as usual with manufacturers who are serious about the process. They continue to improve. Process improvement is continuous because it is dictated by market demand, technology change, and scaling of new product introductions. There is always room for improvement.

Lean IT in plants

Driven by the globalization and distribution of manufacturing, a more recent trend over the past 10 to 15 years is the computer integrated plants. With powerful servers and a variety of software packages becoming lower cost to acquire and deploy, manufacturers have implemented more applications than in the early 1990s. Some plants now use hundreds of different applications, with some running on devices or embedded in manufacturing equipment on the shop floor, and some hosted at the plant's local internal data center near the plant management offices.

However, this first age of Lean IT was based on disparate applications comprised of different data models, application architecture, transactions, and messaging constructs. The cost of ownership of these applications is very high due to lack of similarity, flexibility, and integration methods. Consequently, plants use spreadsheets and word documents for data collection and analysis and for other information processing, in addition to available plant applications.  This makes data warehousing, correlation, analysis, and event-driven workflows impossible to do in a cost-effective manner. 

Lean IT strategy must be driven by a continuous improvement business strategy. IT and manufacturing departments must implement a company's strategy throughout their manufacturing strategies and systems. At the best manufacturers, IT's focus is on supporting and enabling improvements in work practices. IT architectures and systems need to continue to identify and improve manufacturing metrics to represent the current manufacturing state of change. To support lean manufacturing, the primary IT responsibility is to ensure the right information is available when decision-makers (everyone in the plant) need them to make correct, timely decisions. Some plants are starting to program smart, automated devices to identify, analyze, and correct workflow as well, especially in high-volume, highly automated facilities. They are starting to embed business processes in IT systems. Service-oriented architecture accelerates the Lean IT approach. But we need changes to the IT systems to make a permanent improvement in work practice. Over time, positive changes accumulate and compound to provide substantial, sustained business benefits. 

ABOUT THE AUTHOR

Charlie Gifford is chief manufacturing consultant at 21st Century Manufacturing Solutions LLC, in Hailey, Ind. E-mail him at charlie.gifford@cox.net.