Why lean manufacturing won't make you rich — Part II

Every business always has the same goal: to become world-class through everyday changes by meeting the needs of demanding customers who will become more demanding, all in a constantly evolving marketplace.

Lean manufacturing tools can help you achieve this goal. Part I of this two-part series discussed the National Institute of Standards and Technology's (NIST) Manufacturing Extension Partnership definition of lean manufacturing:

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.

In other words, lean manufacturing is the practice of using only what is needed, when it is needed, in the amount that is needed. This definition is critical to remember when you consider the following misconceptions about lean manufacturing.

Misconception No. 1:
Adding labor resources relieves bottlenecks in production.

While adding labor resources to alleviate bottlenecks in production will help you meet a deadline, it isn't a long-term plan to prevent those bottlenecks. Typically, manufacturers are pressured to meet production deadlines, and this pressure initiates a "firefighting" mode that doesn't allow for adequate root cause analysis. Anytime variation occurs in a process, many production managers don't care why it happened—just how the production line will keep moving.

This perspective prevents managers from taking the time to pinpoint the cause of it and follow a systematic approach to eliminate the variation to prevent future occurrences. If overtime or additional labor resources are the tools managers always use to address a bottleneck, continuous improvement never takes place.

This line of thinking is costly in terms of labor and in lost production.

Many world-class manufacturers create a kaizen—or continuous improvement—team to resolve bottlenecks when they occur. Each time a problem occurs that calls for immediate action, the team responds immediately and works with the operator to document the problem, assess the assignable causes, and provide a short-term solution to keep production moving (which may include adding more resources to make up lost time).

The next day this team meets to review the previous day's problems and keep a documented record of their resolution. The production line keeps moving while the team attacks the root cause of the bottlenecks.

Misconception No. 2:
Lean manufacturing guarantees that new products reach the market in the most efficient amount of time.

Lean manufacturing will reduce the time to get your product to the marketplace, but not at the expense of other goals. For example, think about the design process for a new product. World-class manufacturers won't sacrifice adequate design review just to get to the marketplace quicker. With new tooling, parts, and fixtures come new, additional manufacturing steps that could be avoided otherwise. Lean principles help an organization standardize tooling, parts, and fixtures to save time and cost. Without standardization, additional steps usually are needed, which add labor cost. Without input from the shop floor employees, designs can become too complex and tolerances too tight, thus requiring specialized suppliers and equipment. This extra cost then is passed on to the customer. Eventually the customer determines that the cost is unreasonable and finds somewhere else to conduct its business.

To beat the competition to the marketplace, a company might build a model of its product and then release it to production without completed drawings to accompany the manufacturing process. Suppliers and operators then are forced to improvise and interpret steps in the process that result in bad decisions that become costly due to lack of documented instruction. Time and money then are lost in reworking parts and subassemblies and additional engineering. Although the engineer may promise to complete the drawings afterward, managers often expect to move forward on another new project, and the documentation never is completed.

Operating in this manner can breed a "fix-it factory" culture in manufacturing, which makes it difficult for manufacturing and engineering to work together. It's hard to implement a lean approach in the design phase when this type of culture exists. Radical action must be taken in such an environment.

Efficient use of time in lean manufacturing also means applying design concepts that allow everyone to see the big picture at each step in the process. World-class companies understand that the concept and application of design for manufacturability is cost-effective in terms of parts from suppliers, manufacturing, and warranty claims. They try to see the whole picture of the operation from design to delivery. Design engineers spend time where they are most valued: designing new products.

Boeing is one company that strives to ensure that a design is manufacturable and cost-effective for all departments. Recently Boeing required engineers to move out of their facility and relocate to the shop floor of the manufacturing plant 30 miles away. This kind of radical change has produced synergy between manufacturing and engineering that allows them not only to avoid many of the pitfalls associated with the design process, but also reduce time to market by more than 80 percent.

Misconception No. 3:
The one right way to implement lean is the Toyota way.

Ever since lean thinking principles have been applied to manufacturing as a way to reduce costs, Toyota has been the benchmark. However, one of the greatest misconceptions is that all companies must implement lean methodologies the way Toyota does. The Toyota Production System is so named because Toyota perfected a system that best complements Toyota—not John Deere, Harley-Davidson, or any other manufacturer.

Implementing lean is much like buying new clothes for your kids: You know it's time to go shopping when you realize that they have outgrown their clothes. In business, it's time to grow the operation when the current system no longer meets customer demands.

Not many parents would buy their child a pair of jeans that don't fit just because they were on sale. But manufacturers sometimes force their operations to fit a certain mold because they believe it will help them save money the way it did for Toyota or some other world-class manufacturer. This isn't acceptable. Lean tools can be used in many ways. Lean methodologies provide a systematic way to identify and eliminate waste, but the forms of waste one manufacturer will identify differ from those Toyota and others have identified in their own organizations.

Manufacturers must find ways to use lean tools to meet their own special needs. Companies that realize this can customize lean tools to fit their business model and strategy plan more easily.

Identifying common misconceptions about lean methods will help manufacturers smooth their journey toward becoming lean. To sustain their businesses long-term, this journey must be ongoing.