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When Lean Needs a Technology Assist

Phil Coy @leaniac
Managing Director of Strategic Services

Lean is often portrayed as “common sense” for manufacturing. Indeed, lean tools emphasize simple visual practices that are easy to learn and easy to use.  What could be simpler than using a kanban card or even a physical tray to indicate when it’s time to go build some more?  When the tray is empty, send the kanban card or even just the tray back out to the floor to get it filled back up.  Nice and tidy, easy and simple.  Works great for a few items, even for more than a few items. But when you start to get to hundreds of items, or thousands of items, the manual approaches get more challenging.  For example, just how many kanban cards or trays do you need?  As business grows, do you need more trays or can you keep increasing the rate at which you produce them.  Individual decisions like these are easy when there are only a few items but impossible with tens of thousands.

Today, most of manufacturing in North America fits a different business model than automotive, where lean was birthed and then proven. The more common go-to-market strategy of manufacturers in North America is based on their ability to deliver a wide range of high quality products on-time, with short lead times, and at competitive prices. This is considered high-mix, low-volume (HMLV) manufacturing and may be characterized by:

  • Hundreds of thousands of product variants in the same product lines
  • Multiple production lines and load balancing across cells
  • Many unique paths through all of the operations
  • Cycle times and changeover times that vary greatly by product
  • Processes that must be sequenced to resolve capacity limitations
  • Short product life cycles with continual engineering change
  • Widely fluctuating demand with serious spikes and dips
  • Make-to-order fulfillment with short lead times

Lean manufacturing has been very difficult when the level of variation and complexity required by HMLV manufacturers grows. Many companies find themselves stalled or unable to scale their lean initiatives. Often there has been progress with 5S, some kaizens, or a few kanbans as point solutions, the core complexity often remains unchanged.

When sticky notes on a wall, white boards, and Excel spreadsheets are simply not working, we need to think outside the box to adapt lean tools and techniques to situations of increasing variation yet without compromise to our underlying lean principles. The volume of data and the rate of change for HMLV simply overwhelms manual methods. I’ll be the first to propose a manual method with visual management whenever that can work.  However, software is increasingly essential.

Software tools like Areteium from mcaConnect are emerging to extend lean principles with support for HMLV manufacturers. Areteium generates value stream maps using ERP data. In addition, Areteium facilitates:

  • Takt time calculations in highly branched value streams
  • Shared resources across value streams
  • What-if scenarios to understand the capacity impact of fluctuating demand
  • Supermarket and FIFO lane sizing based on demand patterns
  • Sales and operations planning and lean accounting

In the past, there has been a chasm between “lean people” and “ERP people”. The divide is entirely dysfunctional and will be crossed once software tools fully support lean tools and techniques, and reinforce lean behavior while supporting the complexity, variation, and constant change so typical in HMLV manufacturing. Lean for HMLV manufacturers requires software.  Open minds wanted.