The Art & Science of LEAN Manufacturing

BY JAYANTH MURTHY - 2017-01-20

LEAN is a state where the organisation relentlessly drives waste out of the processes; whether it is design, procurement, manufacturing, logistics, sales or after sales processes. The focus is on eliminating waste from the processes, improving the whole not just a bit.

The process starts at the very top, by helping the top management to “See the Waste” and the potential for the improvements. This is typically done in a workshop setting covering LEAN concepts, case studies and followed by a high level assessment of current processes.

At this stage a Current State and Future State has to be developed for the organisation, which paints two pictures – ‘life as it exists’ and ‘a life in a lean world.’ The journey involves moving from Current State to desired Future State. The desired Future State can be visualized and to a certain extent the rest of it emerges as the journey unfolds.

In a recent case with whom we have been engaged the journey started with a two day interactive session for the senior management, which was ended with a LEAN declaration by the CEO. We call this “The war cry, calling for action”. This sets the tone, challenging people for action and also binds everyone. Starting with this the client has been able to make some deep and fundamental LEAN transformation. Let me quickly add that these changes are not just relating to processes, machinery or material but equally relates to people. Unless people change willingly, no transformation is sustained.

Production layouts have been changed, leading to better production flow, reduction in throughput time and thus the inventories in the system have been reduced. The new production system has been coupled with LEAN inventory pull system; involving super markets, milk run etc.

Strung together all these efforts, has resulted in substantial gains. The CFO has confirmed that the breakeven point has gone down by almost 30%!! And this happened without reduction of any human resources.

I would like to point out that LEAN is not a cost reduction tool but it is a philosophy rooted in Kaizen (Continual Improvement). In a global survey conducted by a leading Management Consulting Firm, shockingly 82% of organizations which embarked on Operational Excellence (OE) or LEAN transformation remain dissatisfied and were struggling around tools. It is a case of “been there” and “used those tools”, but not having transformed completely.

On the other hand only 12% truly transform on a sustainable basis! On propping little deeper it was found that these small percentage of companies have hit the sweet spot or what we call “The Magic of One Third (1/3)”.

For them transformation has come by a judicious and strategic combination, coming in the form of Leadership (First 1/3rd), People Engagement (Second 1/3rd) and adoption of LEAN tools (The last 1/3rd).

Sadly most organisations are quick to understand and deploy the last 1/3rd i.e. the tools and conveniently forget or under estimate the need for the first and second 1/3rd! Even if they recognised it, they are not equipped to support it.

In closing, tools don’t change the world! Getting a hammer and a chisel is child’s play but carving out a stunning statue from a block of rock needs more than the tools. True LEAN transformation - Is this an art? Is this about commitment? Is this about hard work and numbers? Is this a mere science?  I leave it for the readers to decide...

In case you missed it, my last post was Middle-level Managers as Change Agents

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Gemba Kaizen