Best Practices in Lean Manufacturing WP - …

1 Cincom In-depth Analysis and ReviewBest Practices in LeanManufacturingThe Migration to a Lean Global EnterpriseWHITE PAPERSIMPLIFICATION THROUGH INNOVATION Table of ContentsExecutive Summary .. 1 Manufacturing Best Practices Start with Lean .. 2 Overcoming the Barriers to Becoming a Lean Enterprise .. 2 Evolution of the Lean Enterprise .. 3 How Does Your Company Rate? .. 5 Recommendations for Driving Lean Transformation .. 8 Cincom In-depth Analysis and ReviewBest Practices in LeanManufacturingThe Migration to a Lean Global EnterpriseWHITE PAPERBy Louis ColumbusCincom Manufacturing Business Solutions1 Executive Summary Lean Manufacturing s greatest benefits are fromeliminating waste from the many processes manufacturersrely on to anticipate, respond to, fulfill, and servecustomers, making it more possible for them to be morealigned to the unmet needs of their customers in objectives of this white paper are to first provideinsights into how manufacturers are tackling the task oftransforming lean production lessons learned into leanenterprise strategies and instituting lasting change at theprocess level.

2 This includes a discussion of the lessonslearned and steps Manufacturing companies are taking toovercome the challenges of making lean enterprisestrategies , this white paper provides a self-rating test to seehow your company measures up. Included is a maturitymodel that shows specifically how your company measuresup relative to others in Manufacturing . Finally, recommendations are made as to howmanufacturers can attain lean transformation based on thecollective insights gained from working with manufacturingcustomers to attain their lean Manufacturing objectives. Inaddition, AMR Research s Demand-Driven Supply Chain(DDSN) Maturity Model applied to Manufacturing leanproduction processes Best Practices Starts with LeanThe following are the five primary elements to considerwhen implementing lean Manufacturing , and theyrepresent the variety of aspects needed to sustain asuccessful lean Manufacturing implementation program.

3 1. Manufacturing flow - Addresses physical changes anddesign Organization - Identifies people s roles/functions,training in new ways of working, and communication. 3. Process control - Directed at monitoring, controlling,stabilizing, and pursuing ways to improve the Metrics - Addresses visible, results-based performancemeasures, targeted improvement, and Logistics - Provides the definition for operating rulesand mechanisms for planning and controlling the flow ofmaterial. Clearly there is a need for intensive coordination andsynchronization of these activities to attain lean objectivesin any Manufacturing organization. Attaining best Practices in lean Manufacturing first beginswith embracing a lean enterprise vision for the attaining this vision of a lean enterprise, manufacturersare pursuing higher levels of supply-chain visibility, greaterlevels of collaboration with customers, and increasinglygreater levels of real-time integration of manufacturingflow, organization, process control, metrics and logisticsthroughout sourcing, pricing, Manufacturing , and servicesystems.

4 All of these advantages are combining to deliverhigher product quality levels in the process. A leanenterprise is one that aligns itself to the goal of being asresponsive and accurate as possible in all responses tocustomers and eliminating the many forms of waste, forboth resources and s often said that lean Manufacturing battles waste andconcentrates on how to create a greater value byremoving all barriers to accomplishing manufacturers objectives. There are seven types of waste in which leanmanufacturing can assist in alleviating. Alleviating thesewill result in manufacturers being more efficient andcentered on better serving their customers while attainingtheir goals in the Waste of overproducing- Producing components thatare neither intended for stock nor planned for saleimmediately.

5 2. Waste of waiting - Refers to the idle time Waste of transport - Moving material more thannecessary. 4. Waste of processing-Doing more to the product thannecessary and more than the customer is willing to pay Waste of inventory- Excess of stock from rawmaterials to finished Waste of motion - Any motion that is not necessary tothe completion of an Waste of defects and spoilage- Defective parts thatare produced and need to be reworked. Overcoming the Barriers to Becoming a Lean EnterpriseThe greatest challenges to any manufacturer inimplementing a lean Manufacturing strategy is attackingthose processes that cause one of the seven types ofwaste first, and second, creating a more synchronizedmanufacturing strategy. When one considers the workcompleted by AMR Research, Gartner, and the researchcompleted by MIT s Center for Transportation andLogistics, it becomes clear that the same barriers tochange are more process- than customer-centric andrequire a change in how Manufacturing is perceived not as a cost but as a means of better serving the accumulated work of the sources mentioned,here are the major barriers to manufacturers being able to transform themselves into a lean enterprise: Need for greater levels of ownership at the C-levelto force change to existing processes.

6 What isconsistent across industry advisory firms is the fact thatall three rank the lack of urgency and lack of support forlean initiatives at the C-level as the major reason why somany companies fail to become lean enterprises. As theself-scoring survey in this paper will show, the lack ofsupport and vision at the top of an organization actuallyencourages more siloed-based approaches to managinglean initiatives at the lower levels of the organization. A company will become what it focuses on more. For those manufacturers that are attaining leanenterprise-level performance, the cultures of theircompanies have become incredibly focused on metrics,and in fact, the organizations themselves have becomeso metrically driven that the culture itself embraces theconcept of measuring performance and improvement.

7 Lean positioned for cost-cutting versus customer-driven is also a critical mistake manymanufacturers make, and often becomes the main focusthese companies continue to pursue, as opportunities to better integrate their strategies with customers,suppliers, buyers, and service organizations presentthemselves. 3 Evolution of the Lean Enterprise Manufacturers have continually struggled to gain theadvantages of lean Manufacturing , starting first withmanufacturing processes at the shop-floor level andprogressing to a vision of implementing an entire leanenterprise. What s become essential in the pursuit of thelean enterprise in the creation of strategies for drivingwaste of all types (time, logistics, costs) out of theenterprise.

8 The table below shows the specific leanproduction processes and accompanying system 1: Characteristics of a Lean Production SystemLean Production ProcessSystem Change InitiativeFocusProduction line (tasks, activities, and cells)Single organization (departments, processes,suppliers, and customers)PracticesCellular Manufacturing , quality circles, supplierrelationship management, pull production,reengineering , JIT, Six Sigma, and process re-engineeringPerformanceMeasurementSyst emsTakt time, on time delivery, first-time-through,safety performance, production rateVisibility Real-time reporting and the use ofanalytics to track the entire value chains performance, casual relationships (productiontasks and activities), use of single version ofthe truth and single information reportingQuality, delivery, process time, cost, flexibility,customer satisfaction; balanced set of strategicmetrics (financial and non-financial); newmethods of cost accounting (ABC, targetcosting); top-down communication; internalversus external focus (benchmarking and self-assessment); process management andmeasures (value delivery)4 The table below illustrates the many differences in focus, Practices , metrics, and performance measurementsystems.

9 The shift required in Manufacturing companies toachieve this level of performance needs to start with therecommendations at the end of this paper and continuallybuild upon insights gained from the survey containedwithin this paper. Lean Production ProcessSystem Change InitiativeThe Lean EnterpriseFocusProduction line (tasks,activities, and cells)Single organization(departments, processes,suppliers, and customers)Extended enterprise (valuestreams and all stakeholders)PracticesCellular Manufacturing , qualitycircles, supplier relationshipmanagement, pull production,re-engineering setupsTQM, JIT, Six Sigma, andprocess re-engineeringSeamless information flow,integrated product andprocess capability andmaturation, identify andoptimize enterprise flow,maintain stability in changingenvironment, align and involveall stakeholders to achieve leanvision, relationship based onmutual trust and commitmentacross the extendedenterprise, make decisions atthe lowest levels, optimizecapability and utilization ofpeople, focus on external andinternal environment, nurture alearning environmentMetricsTakt time, on-time delivery,first-time-through, safetyperformance, production rateQuality, delivery.

10 Process time,cost, flexibility, customersatisfactionStakeholder value(effectiveness), overallefficiency, system availability,system-level flexibilityPerformanceMeasurementSystems Visibility real-time reporting,casual relationships(production tasks andactivities), use of single versionof the truth and singleinformationBalanced set of strategicmetrics (financial and non-financial), new methods of costaccounting (ABC, targetcosting), top-downcommunication, processmanagement and measures(value delivery)Stakeholder value measures,uniform set of measures, casualrelationships betweenmeasures across all levelsTable 2: Comparing Lean Production and Lean Enterprise Characteristics5 How Does Your Company Rate? Based on the collective work completed at theMassachusetts Institute of Technology (MIT) Center forTransportation and Logistics relating to manufacturers andthe theoretical frameworks developed by the MIT LeanAerospace Initiative, the following benchmarkingframework has been created.