The business benefits of a lean policy are apparent in the all-encompassing net effects of increased operating efficiency throughout the organization and expanding profit margins and market share. Ideally, lean practices are implemented in all departments, including administrative, and even throughout the supply chain. Several outstanding models of lean programs include ISO guidelines, 5S systems (taught in college courses), and SCOR programs, among others. Most flexibly suit any size or kind of business.
Are you lean?
Systemic deficiencies such as these identify needs for leaner practices.
- customer service lacking
- sluggish information flow
- information deficiencies
- work-in-progress (WIPs) bottlenecks
- excess inventory
- unbalanced production schedules
- frequently unmet production goals
- deficient sales forecast data
- errors on product specs
- significant issues with suppliers
- aging inventory of less used materials
- inappropriate overhead costs (resulting from disorder)
- short supplies of most frequently used materials
- unnecessarily complicated operating procedures
- excessive numbers of steps in processes
- excessive lead times
- unnecessarily long cycle times
- continuous backorder problem
- superfluous moving of product
- incorrect inventory and shipping records
- shipping containers too big or allowing product damage
- areas designated for inventory overflows
- employees doing non-value activities
Get lean
First, confirm that general management firmly supports the lean initiative and is fully aware that numerous processes will be altered. Then, test run on a single product line for proof of concept.
- Recruit an executive champion.
- Educate all employees.
- Set measurable goals for improvements.
- Set timelines
- Implement in phases.
Invest in Advance Planning and Scheduling (APS) or other systems software for simplicity in managing scheduling, inventory, workflows, customer services, and other functions. This links departments, and suppliers, which frees up information flow to smoothly coordinate tasks and eliminate innumerable manual deliveries of information.
Use a simple inventory control system by which stock of an item is replaced only as the supply level of it reduces to a set level.
Stay lean
Metrics should capture not only labor and material usages, but all relevant performance data. Have individuals track their personal participation, and have management regularly assess their reports.
Lean workplace
Employees appreciate working in a lean environment due to:
- improved safety
- smoother workflows
- balanced scheduling
Supply chain
Some may require their own systems or process improvements to fit your upgrades. Provide transparency of your customers’ ordering. This allows supply chain members to help your company:
- become less dependent on forecasting
- keep pace with customers’ continuously changing needs
- solve supply problems pro-actively
Costs of lean
Most improvements are made with existing equipment. Managed properly, lean is a strategy for reducing costs and increasing revenues, not a business cost.
ROI
Lean policies increase productivity of all employees, including management, by highlighting priorities and eliminating excess actions. This frees up capital by reducing:
- inventory costs
- floor space
- labor costs
- reworks
- quality costs
Lean reputation
Lean operating practices are universally valued for reducing waste, prioritizing customers’ needs, fostering a culture of employee participation in improvements, mutual problem solving, and performance pride. These practices earn customer and staff confidence in the organization.
