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Benefits of lean operations require dedication, discipline
By Jim Anderson
The highly competitive global marketplace manufacturers operate in today demands adaptability to changes brought on by economic and competitive fluctuations far and wide. Efficiency and effectiveness throughout an organization have grown to become key success drivers in this environment, prompting companies to undertake lean initiatives in an effort to increase their flexibility while eliminating waste.
Too often, however, these programs stop short of the full potential this philosophy holds for boosting the bottom line. Reducing inventories, increasing throughput, improving on-time delivery and lowering manufacturing costs — all common and valuable lean initiatives — should be viewed not so much as “events,” but rather as components of a comprehensive program designed to deliver better results. Other critical components of such a program include an added capacity strategy, continuous improvement, sustainability, and enterprise-wide implementation.
Added capacity strategy: Forward-thinking companies combine operational improvement measures with a strategic commitment to expanding sales so that they are prepared to tap the increased capacity they will enjoy as a result of productivity gains. Remember, the goal of lean operations is improved competitiveness. Your sales and marketing leadership must be involved in the process to help you leverage this advantage to increase your market share.
Continuous improvement: One of the greatest challenges of organizational leadership is to expand the scope of a lean initiative to create a continuous improvement process. The most significant gains a company enjoys as a result of lean programs may very well result from many small improvements made over long periods of time. It is important not to lose sight of the cumulative effects of what must become a new way of thinking within the organization. And when new product lines enter the production stream, lessons learned from previous lean programs should be applied immediately.
Sustainability: To achieve long-term success, lean practitioners must exert a very deliberate effort to implement permanent change. Making the plan “stick” requires the following:
— Having the right people in project leadership positions at the right time;
— Providing adequate resources to meet objectives;
— Measuring the effects of changes implemented;
— Rewarding success.
Involving your top leaders in your lean initiatives will help gain support for such projects from all members of the organization. Be sure also to identify project champions whose capabilities reflect the demands of the role. Keep in mind, too, that planning and implementation require different skills.
Be careful to avoid the all-too-common tactic of initiating a lean project during a period of dampened sales, when underutilized employees are available, but probably not suited, to lead the project. In these cases, the project will stall when sales increase and these same employees resume their normal duties. Instead, give careful consideration to who should lead the charge and redefine his or her responsibilities to make the lean initiative a priority.
In order to gauge the success of your lean project, it is critical also to establish measures that assess the effects of the changes you implement. Even if these are small, they may add up over time to represent significant savings for your organization.
A measurement system will also help your organization develop recognition programs that acknowledge and celebrate team efforts toward the fulfillment of corporate objectives. Such recognition will go a long way in building internal support for the programs you put in place and will contribute greatly to the sustainability of your lean efforts.
Enterprise-wide implementation: Understandably, manufacturers tend to focus first on costs relating to their manufacturing processes when thinking about building lean operational systems. But it is important to remember that the principles behind this movement apply to all facets of your organization, from sales order processing and price quoting to contract bidding and other administrative functions. As these costs continue to grow, they stand as prime examples of areas in need of efficiency gains. By limiting your lean practices to the shop floor, you are missing multiple opportunities to cut costs while improving effectiveness.
And, there is no reason to stop with your own operations. Once you’ve achieved sustainable lean practices within your organization, expand the initiative to your entire supply chain. You will find that your suppliers and your customers will welcome mutually-beneficial system improvements that produce better business results, especially when you demonstrate these benefits with concrete measures and reward their attainment with increased business or other incentive programs. If you don’t, someone else will.
Jim Anderson is a partner specializing in manufacturing at Wiplfi LLP in Eau Claire. Contact him at 715-832-3407 or at janderson@wipfli.com.
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