When we work with clients to implement lean manufacturing principles, we typically use a software tool called LeanCONNECT (formerly called Areteium). With this tool, we can use existing manufacturing production data from any ERP system to identify existing plant floor inefficiencies. Running a variety of scenarios, we can create sophisticated future state lean models.
How do you build a bridge to the future state of lean manufacturing?
Step 1: Lean principles begin with leadership
The first and most important element of any transformation is to get executive buy-in. Lean manufacturing is an ongoing commitment and requires perseverance and adherence to the concepts and principles for the long-term. Lean manufacturing is less of a process, and more of a mindset. Nothing will derail a lean project faster than lack of leadership.
Step 2: Document the current value streams
Step two is to document your current processes, which in lean manufacturing are called Value Streams. You want to look at each process from beginning to end. Document how long each step takes. Note inefficiencies and areas of waste. Document the impact on customers, as well as your company. In lean, we often talk about takt time – how long it takes for a product to be produced. To calculate takt time, you’ll need to know:
- The production schedule – how much time is spent in operation.
- How much time is required for equipment maintenance, breaks, shift changes, and clean up.
- How much customer demand/product is produced within that time span. Many businesses have cyclical demands, by time of day or seasonality, and this factors into your value stream calculations.
The goal of building to takt time is to eliminate non-value adding time and balance the workload of the operators and equipment. In addition to defining how long production takes, you must also account for things like:
- Product defect percentages
- Fluctuations in raw material costs
- Inventory carrying costs
- Reasons for downtime – changeovers, maintenance, etc.
Ideally, you’ll want to gather these metrics from data gathered over a significant duration in time. We use LeanCONNECT to pull in information from your ERP system, but you can use other business analytics tools as well.
Step 3: Start asking “what if”?
With so much information available, it can be easy to get overwhelmed. Pick an area that stands out as particularly in need of improvement and consider your options:
- What if we reduced customer defects? Could we charge more? How much would this impact our costs and profitability?
- What if we added more capacity in this plant – or more resources to this shift?
Quantify the benefit you would obtain by achieving this future state lean model.
Step 4: Pick one area of focus.
Using your “what if” analysis, isolate one area of improvement. This quick win will help get the entire team on board with your lean manufacturing initiatives. Be sure to communicate your successes and the impact across the organization.
Step 5: Look long-term
Lean manufacturing is a never-ending journey of continuous improvement. Make sure your team is prepared for a marathon, not a quick sprint. Those small corrections over time add up to big savings for your company and added value to your customers. The key is to have cohesion and commitment to lean principles across the organization. From sales to production to shipping, each department must work in coordination with the rest of the organization.
9 Ways to Squeeze Manufacturing Revenue & Sweeten Profits
Author: Phil Coy, Managing Director, Manufacturing Excellence