A common sense approach to manufacturing efficiency that doesn't begin on the Shop floor

There is no shortage of books written on the subject of lean manufacturing and the value it can create by eliminating redundancy or non-value processes in the production system. However, with a traditional focus on the processes toward the end of a product life-cycle, much of this so-called "lean" approach is really a misnomer. That's because when the issue of inefficiency is addressed at the time the product is being manufactured the damage is done and waste is already designed into the product.

In fact, when people talk about lean manufacturing they're really talking about one step in a more far-reaching approach to efficiency and cost-savings. Taking a holistic approach to realizing efficiencies results in an environment that adds value in every step in the process — from concept to the resulting product.

Use of the term "lean," actually refers to a production system introduced by Toyota Motor Corp. back in the 1930s. While the principles of lean manufacturing evolved over many decades, it is only now becoming entrenched in the North American automotive industry. A big reason for this, is that the principles and practices of lean manufacturing seemed so one-dimensional that it took almost 90 years for automotive companies to realize that lean manufacturing was more than a best practice on the production line and was really a yardstick by which to measure their entire operations and compare themselves to their competition.

In fact, when considering the competitive pressures in today's business environment, companies that are not "lean" are playing catch up. It's no secret that customers are always demanding better products and better value for their money. It might come as a surprise to know that companies can improve their own competitiveness and sustainability while still offering customers efficiently developed and manufactured products. But if the lean approach seems like such a straightforward notion to business efficiency, why is it so elusive? And, how does such a practise become blocked or stifled in so many organizations?

Adopting a lean approach starts with a simple question: "What's essential?" Whether companies are simply trying to survive or they are conducting an annual assessment of their productivity, they need to determine that every activity they engage in is essential in the value chain to providing a competitive product. This involves analyzing each phase of the product lifecycle — from innovation, to design and development, to testing and, eventually, manufacturing — and removing the waste from those processes. We often overlook the actual process of bringing a product to market even though that process might takes weeks, months or years in advance of actual implementation. To inject efficiency at the outset we need to look back at the product lifecycle and ask: "What's essential?"

As mentioned, there is a significant opportunity for waste and redundancy in the phases of innovation, design and development, testing and manufacturing. The feedback and assessment phase is typically underutilized and can be a useful starting point in assessing the changes required to implement a lean approach. The act of innovation itself can be a trial and error exercise. First, quite often when organizational leadership allocates resources to innovation it is often seen as wasteful rather than essential. Moreover, when times are tough, this resource allotment is often the first to be removed. This not only creates waste, but jeopardizes the future of the company as well. Making the transition from innovation to application can also be viewed as wasteful because of the time dedicated to trial and error. However, when companies realize that this time is essential to creating an end use for its product, the perceived waste takes on a renewed and obvious importance.

Satisfying customer demand for a product in addition to actually going through the product development lifecycle is not easy. The manufacturing input includes the processes required to translate raw material to end product including the entire supply chain of raw and fabricated materials, transportation (logistics), the equipment to manufacture and the processes to manufacture. When viewing the scope of manufacturing, understanding that it is essential to only do that which creates value, it does not take a huge leap of faith to understand that the lean approach needs to start further upstream to result in a well-executed lean cycle.

Companies might achieve success by reviewing their operations and creating efficiencies that weren't originally there. Those companies that hope to achieve long-term and sustainable success empower each person in the various phases of the product life cycle to ask themselves: "Is what I'm doing now adding value, or am I just doing it because this is the way I'm supposed to do this?" They should also ask: "If I were the customer, would I pay money for the activities that I am engaged in?"

If a company truly is lean, then there is no waste and value is added in every process and in every activity. One simple, and often overlooked, method to ensure that an activity has added real value is to consider the approach of having the internal customer of each phase provide feedback, evaluation and recommendations to improve the outcome of each phase of the product development cycle. By creating this type of downstream involvement in the phase approval process the value added assessment can be immediate and change can be implemented quickly. Additionally, a heightened awareness of the hurdles that people are confronted with in each phase will provide enhanced communication and result in a cross functional team approach to solving problems.

The lean approach is not a program to take lightly, nor is it the industry's latest buzzword. In today's competitive market, companies need every advantage they can get. The lean approach is not only essential to realizing untapped efficiencies and savings, but it just might be essential to survival.

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Damiano Peluso
National Automotive Leader
Tel: +1 416 814 5776

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