Transitioning to Lean Manufacturing? Benchmark Your Progress

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Having spent the last twenty years helping companies make the transition to “Lean”, we’ve seen a wide range of methodologies, and a similar wide range of results. The purpose of this article is to provide you with a benchmark and a methodology with which you can compare your own results with those of world class organizations.

An effective lean transition generates almost immediate global bottom-line results.

Within 9-12 months you should expect:

* Cash Generation via permanent inventory reduction of 20-40% of total inventory $’s (typically millions of dollars)

* Lead Time Reduction of 40 – 60% of overall lead times.

* Delivery Performance: Near Perfect 98% +

* Quality, Productivity, Profitability: Quantum tangible improvements

* Internal Facilitators Trained & Process Documented

* A Continuous Improvement Process, Procedure, and Culture Firmly in Place

* Natural Work Teams formed, goals established, progress tracked

The critical point is that an effective “lean” transition produces significant GLOBAL results, not just “pockets” of performance. We speak with companies all the time. They tell us “we’re already doing a lean transition”. Yet, when we ask them what kind of results they’ve gotten, this is the sort of response we get:

* Pockets of Excellence: “We’ve had outstanding results in the xyz area”. However, when you probe a little further you find that the effect to date on the entire company bottom line is undetectable.

* Unfocused Training: “We’ve put all 400 of our people through two weeks of lean training. Our in-house ‘trainers’ have all been through extensive coursework and are now lean certified.”

Ask the same question: What’s the impact been on the total company bottom line? Dead silence.

* “Study” In Place of Action: “We’ve documented all of our processes. We’ve flow charted. We’ve Value Stream Mapped. We’ve done standard-work studies. We now have an entire 3-ring notebook full of data.” What’s the impact been on overall company well-being? Virtually no change.

* Solutions Looking for a Problem: “We’ve 5-S’ed six different areas. We’ve got teams in place. We’ve done a multitude of kaizen blitzes. …”. Lots of activity. No direction. Result? Minimal impact on the bottom line.

If your Lean or Six Sigma transition process is producing lots of “activity” with little bottom line substance, it may be time for a new direction. A lean transformation process that rapidly generates mega results requires not just top management “support” but top management understanding and commitment as well. It also requires a simple control mechanism that allows top level executives to monitor, support, and control the process.

The most effective way to do this is to require that top management establish a commitment to corporate level tangible, measurable results. This typically involves setting mid-range (12-18 month) quantified end objectives, as well as agreeing on the targeted rate of progress, i.e. goal curves.

Progress against these goals must be continuously monitored. This is done through formal monthly top management reviews. Cause and Corrective action are required whenever the goals are not being met. People must be held accountable. Measurement and reward systems will also likely need to be adjusted.

If this sounds a lot like management 101, it is! Is it easy? No. Can it be done? Absolutely! The critical difference between a world class lean transition approach, and most traditional methods is this:

BUSINESS GOALS drive the process!

Tasks are performed, classes are held, techniques are applied, blitzes are targeted, etc. so as to accomplish the goals. The tangible objectives desired by top management are achieved by applying the lean tool-set as and when needed. Kanbans, 5S, TPM, SMED, Six Sigma Events, Area Blitzes, etc. are a means to this end. They are NOT an end in and of themselves. Do not allow your lean transition process to lose focus on this critical point.

Now is the time to “lean” your lean-transition process.

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Source by Jack Harrison

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