For many years, ‘Lean’ has been a hot topic among automotive manufacturers. It is well known in the industry as the method Toyota has used successfully to streamline operations, reduce cost, and optimise the quality of its products. Lean has a clearly defined set of principles to guide you in applying it to your manufacturing process.
The principles to apply Lean in the manufacturing processes are as follows:
Determining the customer-defined value: When all aspects of the manufacturing process meet the customer’s needs at a specific price and time, the customer-defined value is met. When the customer doesn’t respond to a product by ordering more, the OEM often makes the mistake of adding more bells and whistles to the product or adjusting the price. If that doesn’t work, the OEM employs another marketing strategy even when it is clear that the customer has already decided against the product. In this case, the producer is focused on fixing the internal process and not on rethinking the product value from the perspective of the customer. Lean thinking clears the board, ignoring existing assets & technologies, and rebuilds the process into one that ensures product flow and no waste.
Identifying & analysing the value stream: The value stream includes all the steps & processes necessary to put the raw materials together to create the finished product and deliver it to the customer. Implementing Lean involves analysing the value stream, which identifies three types of actions throughout the stream: actions that create value; actions that do not create value but are unavoidable because of the restrictions of current technologies, production methods, and assets; and actions that create no value and are avoidable. These actions are individually assessed, and those that do not directly create customer value are either redesigned so that they do create value or are removed from the process.
Making the process flow: When the customer value has been precisely determined, and the value stream has been analysed & optimised, all of the actions in the process must be made to flow efficiently. Doing this requires a change of perspective from one that groups tasks by type to one that focuses on how the product should meet customers’ needs. The tendency is to think that grouping similar tasks will keep everyone busy and will automatically guarantee that the process flow will be efficient, but this isn’t true. On the contrary, this often makes the process rigid and not adaptable to changing requirements. The product flow is disrupted, and time is lost while the product waits for the next operation, or workers change over to another activity.
The workcell, a key lean concept, results in optimal workflow. The workcell is a space on the factory floor where all of the work necessary to complete the assembly of one part is done. Workers don’t have to cross long distances to access all of the machines they need to produce a part; the machines are always near them and arranged in such a way as to minimise movement. Production lines are usually organised into groups of workcells.
Establishing customer ‘pull’ through the process: The way to incorporate agility into the process so that customers always get what they want is to make it possible for the customers to continuously communicate their needs to each part of the manufacturing process. In effect, the customer is ‘pulling’ the product through the process. Lean manufacturing methods make use of the Kanban system to do this—a system in which signals (usually in the form of cards) containing updated information about customer needs accompany the product through each step of the manufacturing process. This informs workers of the customer value, reminds them that they are working to achieve customer value, and guarantees that customers know that they are getting what they need.
Constantly perfecting the process: When companies accurately identify customer value, analyse the entire value stream to make it more efficient, and make the value-added steps in the process flow efficiently by letting customers pull value from it, something remarkable happens. The people in every part of the process begin to realise that better results can be achieved with less effort and cost, and that this can continue indefinitely. As the process becomes more efficient, previously hidden waste in the process is exposed. This becomes the impetus for further review and refinement of the product flow. When product teams are in close communication with customers, they can always find ways to specify customer value more accurately and enhance flow and pull in the process. Employees who discover ways to improve the process receive immediate positive feedback, and they realise that they too have a stake in delivering real value to the customer. This encourages them to be even more involved.
In some companies, it is the lower-level managers who are the first to buy into the Lean philosophy. They propose ways to incorporate Lean into the enterprise by devising proof-of-concept efforts to show upper management the potential benefits of adopting Lean on a larger scale. This can be a challenge, but as the business begins to show increased customer satisfaction and corporate profits, the message becomes clear: Lean thinking, when implemented correctly, can enhance the company’s competitive edge. However, to implement Lean correctly, you must understand it correctly or you may do more harm to your manufacturing process than good.
Without some convincing evidence that it will succeed, businesses will not be motivated to invest the time and effort needed to become more efficient. The following section discusses a Lean implementation using Fujitsu Glovia’s ERP that helped automotive parts manufacturer, Keihin America to fundamentally rethink the production processes, thereby, achieving Lean manufacturing.
Keihin’s Lean solution
While working on the specifics of its Lean implementation with the Lean specialists and Glovia, the planning group at Keihin hit upon an important realisation—Keihin employees could be continually motivated to come up with solutions to make the manufacturing processes leaner and more efficient. The virtue of this idea was that it acknowledged that each worker had the most intimate knowledge of his or her task, not the manager. Ideas would percolate from the ground up, not be imposed from the top down. The workers could then evaluate the solutions and present them to management for approval. The planning group realised that putting this process into place would achieve the goal of employee involvement and the Lean objective of constantly perfecting the solution. Cross-functional workgroups would be the foundation of this process.
At regular intervals, a group dedicated to the task of managing this process would form cross-functional groups of associates from factory workers to upper management. Then week-long brainstorming sessions would be scheduled with the goal of producing and evaluating five or six ideas for improving efficiency. The sessions would follow this agenda:
Create the solution: Any member of the group proposes a complete, practical solution to a valid business problem that he or she had encountered, or seen others encounter, as part of the group’s work.
Depict the solution: The group creates organisational charts, proposed process flows, and other materials to represent the solution. The idea of this step is to add as much ‘real world’ detail as possible and to show what will happen to real people if the solution were implemented. Everyone is encouraged to contribute ideas and opinions as the concept develops.
Create metrics of the solution: The group gathers all of the relevant data it needs to generate metrics that predict, as accurately as possible, the likely outcome of implementing the solution. Examples of these metrics are projected cycle times, lists of what is value-added in the process and what isn’t, labour costs, and costs of investment. The idea is to prove the proposed solutions through standard methods of business analysis. The business prediction modules, the ability to model data, and the business data aggregation and presentation capabilities of the Glovia ERP software are important resources in this step. A mentor who is well-versed in Glovia technology sits at a computer running Glovia modules during this step. If, for example, the group needs current scheduling data or a quantitative view of the operations of any assembly station, the mentor can provide that immediately.
Decide which are the best ideas and refine them: The group decides which five or six ideas are the best and comes up with ideas to improve them. New metrics are generated if necessary.
After this process was established, it took Keihin between three to five years to see most of the benefits. The expected gains in employee involvement and continual improvement of the manufacturing process were apparent relatively quickly, but over time, Keihin also began to see benefits that it didn’t foresee at the planning stage:
Manager and worker buy-in: Because the workgroup made management and scheduling decisions as part of the brainstorming process, the planning group recognised early on that there was a danger that the more traditional, changeaverse managers in the company would not react well to the change to lean. However, they discovered that those managers found it helpful that they were presented with solid metrics along with detailed proposals and not just PowerPoint presentations filled with general ideas. They knew that the teams had looked at the costs involved and projected outcomes and savings. This made it easier to decide whether a proposal should be given the green light for further study, and this won over even the more reluctant managers.
Another advantage for the managers is that the process made it much easier to gain buy-in from the workers because everyone knew that the proposals didn’t just come from the top down. Employees at all levels of the organisation were more confident in the proposals from the beginning.
Worker education: For many workers, the brainstorming sessions were their first exposure to the kinds of aggregate business data managers work with every day. Even if their daily job is that of a line worker at a specific station, for example, when they see the data, they start to gain a better perspective of how their performance and tasks fit in with the manufacturing process as a whole. After several iterations of brainstorming sessions, workers bring a more comprehensive understanding of the process to the sessions, and the ideas they generate are better informed and more intelligent.
Revolutionary ideas: In a production line, a fixture is a tool that holds the part to be assembled in place so that line workers can manipulate it. Fixtures are custom-fit to the part, so when the parts are changed in a production line the fixtures must also be changed. During one brainstorming session, an ambitious proposal was made to remove all fixtures from all production lines. The workgroup found a way to make it work and management approved it. Now Keihin no longer incurs the costs of creating and disposing of fixtures. Production line changes are faster and more efficient because Keihin no longer needs to track the fixture with the part. This improves scheduling and inventory management. Many new ideas for improving efficiency have been proposed during the brainstorming sessions that may not have been considered by upper management.
When Keihin America had to choose between building its business by becoming more efficient or expanding its manufacturing capacity and incurring the overhead costs associated with that, the company chose the wiser course and invested in Lean. Glovia technology continues to play a crucial role in Keihin’s drive for greater efficiency and less waste in its production. As a result, profits and new business opportunities have increased dramatically.
Lean promises a lot—including increases in production capacity and product quality; reduced production time, inventories, and cost; and consistent and timely deliveries. It is very popular in the industry right now, but how much of the sales pitch is hype and how much is grounded in reality? The reality is that Lean is a tool, and like any tool there is a correct, and an incorrect, way to use it.
When Lean is implemented with careful planning based on an understanding of what it can be expected to achieve, the benefits are real. When Lean is implemented based on a misunderstanding of its basic principles, a lot of labour, time, and money can be wasted by a ‘solution’ that can actually make the problem worse. A company that is in short-term, crisis-mode thinking may mistakenly turn to Lean as a quick fix for its problems. It isn’t a quick fix. It is a substantial investment for long-term profit that requires continuous reevaluation and refinement.
Lean is a hot topic in the manufacturing industry right now, but fundamentally it is only the latest development of an idea that is as old as industrial production itself—the idea of making production as efficient as possible. You should look past the hype and make your approach to lean informed and intelligent. Then you will realise the real benefits of Lean, and your company may become the next lean success story.
The article is reproduced with due courtesy to Fujitsu Glovia Inc. For more info, visit www.glovia.com