As a seasoned Industrial Engineer and Lean practitioner, I am highly sensitive to the importance of creating and operating efficient businesses and production operations. However, in my role as a turnaround and business restructuring consultant, I see too often the effects of misguided efforts to implement Lean programs that hurt the performance of the operation instead of improving it. This is unfortunate and it is often caused when business leaders are sold on implementing a shortsighted Lean program that is limited in its scope, and as the new processes are improperly applied, it often creates much greater operational problems than what was experienced before.
How then do we properly apply the Lean concepts so that they help the business? I will cover just three areas of the many improvements that must be in place for a successful Lean implementation program. The three I will address here will all be related to quality process and discipline improvements. First of all, in order to run a Lean operation effectively, there needs to be much greater attention paid to product quality. If fewer parts are in stock, any defective parts or products will have a much greater negative impact on meeting short lead time commitments, because there is limited additional inventory to cover losses. Likewise, process quality can have the same impact in that if the part is damaged in the process, or the process does not consistently provide a finished product that conforms to specification, then the part must be either repaired or replaced, both scenarios that would require lead-times in excess of a true lean process. In both cases, there will simply not be time to make up for the lost parts and the fulfillment system will fail to meet planned expectations. In summary, product designs must be refined to support high quality products while process capabilities must be robust and capable enough to consistently meet specifications.
The last issue on this theme is in the quality of information and this is very often overlooked. A typical objective of Lean systems is to dramatically reduce response time and to accomplish this task with much lower inventory levels. Often, the implementers have a shortsighted approach that focuses mainly on the parts delivery system which is at the output end of the process. However, our experience tells us that we must think and act globally in order to be successful.
Since the 1980’s, we have managed the successful implementation of hundreds of cellular pull environments with the use of thousands of kanbans, with most of these refined processes taking weeks of lead-time and reducing them to only a few hours in the new Lean processes. From these many experiences, we found that there was an unexpected paradox in that in order to set up successful rapid response Lean systems we must actually improve our ability to plan effectively much further into the future. For example, in one of our first full JIT plants, we reduced our response time on orders from lead-times of sixteen weeks of production to just four hours with a corresponding 88% reduction in total inventory levels. However, in order to successfully plan our long lead-time components, deal with demand seasonality and capacity loading, it necessitated that we create a master production scheduling discipline that managed one full year into the future. We discovered that without substantially improved information disciplines that allowed us to view the future and affect it with planning, we could not create and manage a very responsive production and supply chain environment that could react and ship complete orders in just a few hours. You can view the details on this very successful project on this website at the following link: http://www.bottomlinefix.com/case-study/retail-product-manufacturing-business/
In closing, implementing highly-effective Lean programs is very dependent on understanding and correcting all of the factors and inputs that affect response issues, and in this article, we have covered just a few of the many that must be considered. Contact a seasoned Lean implementer such as Lean Enterprise Solutions if you wish to insure your success and spare yourself the frustrating consequences of a shortsighted implementation program.