A manufacturer seeking to implement a lean approach may be driven by a number of factors; failure to meet KPIs or because they are growing beyond the capabilities of their current operation are two primary ones.
Whatever the factor that is providing the impetus, at the heart of the problem is concerns over the inability to meet customer demands.
Today, there is even more pressure for manufacturers to meet customer demand. Or, perhaps more appropriately, customer expectations are becoming more complex and demanding, which is increasing pressure on manufacturers.
Globalisation means there’s more competition than ever. Mass customisation is a growing trend and manufacturers need to be able to respond to more people wanting different versions of the same thing. And customers expect things now.
Lean manufacturing is a series of applied techniques that eliminate wasteful activities from the production process, and subsequently improve efficiency and profitability.
At it's core is a focus on creating value for the customer. Lean is about driving a customer-centric culture across your business, your processes, and your people. So you can deliver products that meet customer requirements, on time, and to a high quality.
There are five lean manufacturing principles. At the centre of each is a focus on meeting customer needs and promoting customer satisfaction.
The first principle focuses on identifying value in the eyes of the customer. What do your customers value? If you can deliver what they value, you will have happy, satisfied customers. And they will return to buy from you again and again, allowing you to maintain and grow your business.
‘Value adding’ activity is anything that changes the size, shape, fit, form or function of material or information to meet customer requirements. Think of it as anything the customer would be willing to pay for. All other activities are ‘waste’.
2. Value stream
The value stream is made up of all processes necessary to deliver products to customers. This is called Value Stream Mapping (VSM). Some of these processes will add value to the customer, but many won’t. Studies have shown that only around 5 per cent of business activities add value - that leaves 95 per cent of waste. If you could remove that waste, your processes would be a lot more efficient, freeing you up to create more products, in the same amount of time.
And that’s the core focus of this second principle. Identifying the value stream so that, as much as possible, you can limit the processes to only those that add value - allowing you to free up more time to better meet customer demands.
After the value stream map has been created, the next step is to examine the process, minimise waste and find solutions to create flow. This means parts moving in a smooth sequence; from your supply chain through manufacture to the finished product. The ultimate aim is to create one-piece flow where inventory, stoppages and defects are eliminated. So you maximise productivity and deliver products to customers on time, every time and with no defects.
4. Value pull
Once you’ve established a smooth flow of processes, you want to be in a position where customers can come to you and get the product they need, when they need it. So you don’t have to stockpile materials and create products in bulk, creating an expensive inventory that needs to be managed, and may end up going to waste. Creating ‘pull’ means designing your processes so that all activities are synchronised from the time the customer places the order through your supply chain and manufacturing process to delivery. Your aim is to create products at the ‘pull’ of the customer, as with “just in time” manufacturing.
The result? Satisfied customers who receive products when they want them.
The most important principle of all. Lean thinking, continuous improvement, and a focus on customer needs should become part of your business culture.
Your workforce are key to the success of any continuous improvement initiative. They should be your number one resource in your pursuit of perfection.
Determine strategic priorities and deploy your best people to drive continuous improvement in that area. Provide training and resource to enable structured, team driven continuous improvement activity on a daily basis. Encourage your employees to share their ideas - after all, they experience the process first hand and know how things work.
Finally, let them see and track results of their inputs. In doing so you will embed a legacy of continuous improvement and a customer-centric culture across your entire workforce.
In an increasingly global and technical marketplace, it’s more important than ever for businesses to thrive. And Lean manufacturing has been proven to help not just manufacturers, but organisations across a range of industries.
By employing these five lean manufacturing principles you can understand what value is to your customers and adapt your processes and ways of working, so you can deliver more of it.