February 5th, 2014 by Ed Bannen
The lean manufacturing movement has picked up steam in the last decade. For those of you unclear on the lean movement, the main principal is to reduce waste so capital can flow more cleanly through a Company’s system.
One major pit fall is when companies cut redundancies rather than waste. Some might argue redundancies are waste, but that would be incorrect. Take the airlines for example; there are numerous safety checks; while redundant, they are essential for stability. Since there is no such thing as a waste-free program or process, companies need to be careful when they consider cutting steps in their processes; by cutting some redundancies they might be cutting into the meat of the organization and not trimming the fat.
Another common trap for companies is risky decisions such as uncertainty on a contract and not taking the time to investigate the consequences. I have a manufacturing client who entered in a contract that resulted in a loss every time a specific part is sold. As part of the contract, the client agreed to supply X number of parts per year without realizing the full impact on the Company. This contract nearly drove the Company out of business; the running joke at the Company is that anytime some makes a poor choice, they call it the project number.
So how does someone move their manufacturing to a lean concept? Simple, it all starts with a plan! This plan has to be fluid and easily adaptable to changes in the environment and new opportunities. Once the plan is drawn comes the hard part, the buy-in. Lean plans and processes have little effect without employee support; the people doing the job every day often have the best ideas on ways to increase efficiency and can be a great untapped resource for out-of-the-box ideas. You just have to get past the suggestions for shorter work days, more pay, and longer vacations! Once employees start seeing the Company’s processes and dollars as their own, they will surprise you by paying more attention to the little things; cutting just the right amount of steel, not leaving a machine on when it’s not needed, or salvaging scrap for reuse. Offering incentives for improvements will help stimulate this culture.
Last, what does every plan need? Goals with specific objectives that are both measurable and obtainable. Setting performance metrics will keep you focused and moving forward. In closing, these principals and ideas are not solely for manufacturing but should be used for all businesses. Want to increase your profits? You might find you can double your profits without even growing sales. For help with Six Sigma and lean production ideas, contact GBQ and we will help you realize your full potential with cost savings.