What is lean?
So many times when people start implementing lean they focus on so called ‘ low hanging fruit’ but is that all there is to it?
The approach of some practitioners would suggest it is, however there is so much more than just taking ‘low hanging fruit’. Also let us not forget that low hanging fruit is often overripe and may not be the best quality!
So where does this focus on ‘low hanging fruit’ come from?
My perception is the reason for such immediate focus on ‘low hanging fruit’ comes from two things. Firstly, there is an unrealistic expectation of the rate of improvement from process improvement activities. Many senior executives seem to have a very short horizon for improvement, and if money is to be spent on process improvement there must be a return within six months, sometimes within three months. This forces a focus on short term improvements, the so called ‘low hanging fruit’. There is nothing wrong with making these improvements, they are free cash, necessary and failing to address them can be damaging to profitability and performance, but this approach should not be confused with a structured lean implementation.
‘Low hanging fruit’ approaches will deliver short term improvement in both process and financial performance, however this will be unsustainable and will not drive the business to be a time based competitor. It is implicit in the description that these rewards are easy to access and obvious things to do, so what is the difference in lean manufacturing? We are making improvements, reducing costs, its all the same thing isn’t it? Actually, no it isn’t. Making obvious improvements should just be done and requires little or no effort and little skill to achieve. Lean manufacturing should focus the business on time based competition, that is making things faster, more reliably and ultimately this will reduce costs. Notice that lowering costs is one result of lean manufacturing. The real focus in lean manufacturing is superior customer satisfaction through time based competition.
Why is time based competition so important?
Time based competitors have distinct advantages over other competitors since for every quartering of total completion time, they experience a doubling of productivity and reduce costs by 20% At the same time they enjoy three times the growth rate of competitors and double the profit margin. This is achieved through a relentless focus on what is of value to the customer
For a process operator access these benefits, they have to implement a sustained and structured lean manufacturing initiative which addresses the following key features of lean;
What does the customer value? Without knowing this, how can you ensure that value is added and delivered to the customer? The lean journey is always from the customer perspective, since focusing on this the customer values is the best way to ensure business activities generate a profitable return
- Value Stream
Mapping how and when value is added to the product enables the business to focus all efforts on doing things the customer values. Mapping the value stream is about more than just the physical activities, it encompasses all of the information flows, all work in progress, everything required to create and deliver the product and / or service the customer needs
What is the most efficient way to join two points? A straight line, in the same way it is important that materials flow in one direction through the process. The flow should always be from raw materials to delivery of finished product, with minimal work in progress.
In an ideal manufacturing environment, materials are pulled through the process by demand from the ‘customer’ rather than having materials pushed into the next process regardless of whether to not they are needed.
A continuous improvement approach should be adopted, always looking to create additional value in the process,. this should be done either through incremental changes or through a major step change.
Most ‘low hanging fruit’ is of value from the perspective of the supplier’s costs, not from the perspective of customer value, so whilst it is valuable and important to address these losses, it does not replace a lean manufacturing implementation.
Start with understanding value from the perspective of the customer, map the process as it is (current state VSM), then map the process how you would like it to be (future state VSM). Construct a plan to modify the process from current state to future state, taking into account the financial and personnel resources needed to when declaring a timescale. This is then used as a blueprint for the lean transformation.
Lean is a structured, rigorous, disciplined process requiring dedication, focus and hard work to deliver profound and sustainable improvement in the time based competitiveness of the process, leading to improvements in
- Process cycle time
- Lead times
- Customer satisfaction