The consideration of value added labor has been discussed and implemented for centuries. In post WWII Japan, Toyota used Adam Smith’s principles by developing the Toyota Production System (TPS) and then implementing it with very successful results. The overall concept, now called Lean Manufacturing, has been exported and successfully used throughout the world.
The basic principle of Lean Manufacturing is to do more with less -- drive out waste by eliminating non-value added labor -- while helping value added labor work more productively. The ultimate objective is to increase throughput while decreasing manufacturing costs. These principles can be successfully applied in all manufacturing environments including job shop, batch, assembly, and process industries.
It should be understood that lean manufacturing is not really about the software you buy but more about how you choose to use it to support your operating environment. Other than the lack of a quality module, most any system will support lean.
Below are examples of some of the more widely used tool sets used to achieve the objectives of doing more with less.
- Work Cells - For job shop manufacturing environments, the use of U Shaped Work Cells are an optimum solution to achieve the continuous flow objective. Here a worker can stand inside the work cell while product moves around him from operation to operation until the piece completes its route and the part or finished good is made.
The cell is well organized with operations simply laid out; processes are well documented and inventory for the completion of tasks are neatly arrayed. The work center is characterized by small batch sizes and short production cycles to match short customer lead times with no finished goods inventory in the factory. To support the cell environment, a simple to use Shop floor Control application with the ability to report multiple operations completed with one transaction is very helpful.
- Quality - Within each work cell, direct labor is trained to perform the quality review process with corrective action immediately taken to keep scrap to a minimum. Every employee can stop the production line if the quality of the products is not up to standard. Andon, a signboard for feedback, is used to report issues during the production cycle. The lights on the signboard provide the location of the work center experiencing difficulty and allow fellow employees, maintenance personnel and managers to quickly respond.
- Kanban - An inventory pull system is used extensively in a Lean production environment to limit excess inventory on the shop floor and in the warehouse. The goal in this environment is to have close to zero inventories which will decrease investment while limiting excess and obsolete parts. To achieve this, Lean companies work with their suppliers to decrease safety stock while providing purchase parts and materials that meet quality specifications. Ideally, purchased parts should be delivered Just-In-Time; ready to be placed immediately in production.
- Kaizen - Continuous improvement is emphasized in every part of Lean manufacturing. Just documenting and understanding the processes are not enough to be an effective Lean Manufacturer. The original process may not have been perfect or performance may have varied over time. All existing processes need regular performance reviews with a fresh perspective in capturing value added and eliminating non-value added in labor, materials and overheads. Many companies form Kaizen Work Teams that are comprised of direct workers and charge them with process improvement. Improvements are measured and the benefits captured and reported.
- Performance Indicators - Performance is constantly measured in a Lean manufacturing environment. Data on production and quality is collected and displayed on the shop so that labor can see their past performance and to match and exceed them for current production demands. It is under Lean manufacturing, and through the use of Kaizen Work Teams, that direct labor is empowered to implement operational improvements on the shop floor. Performance indicators are also used by management to keep them informed on current business status. These indicators, referred to as KPI (Key Performance Indicators), are selected by management and are unique to each company. They give management a real-time snap shot on how the business is performing. Indicators such as Orders Processed, Manufacturing Output, Line Productivity, and Orders Shipped are a few of the wider used KPIs.
The above tools have been successfully used in Lean Manufacturing, individually or in combination with other tools, to achieve the overriding goal of producing quality products in increased quantities with using fewer resources. The Japanese focus on quality has been joined by other methodologies, such as Six Sigma and ISO. Kaizen has been used by empowerment programs in many companies and their use of performance statistics have played a significant role in Statistical Process Control (SPC) efforts.
Lean Manufacturing’s simple common sense tools are effective and do not require a large investment of capital so they will continue to be front and center in smart shop manager’s thinking.