Not Just for the Factory Floor

4 Oct, 2005 By: Jeffrey Rowe

The full benefits of lean manufacturing come when you apply the principles enterprisewide

We’ve heard now for many years that lean manufacturing is key if you want to remain competitive in the manufacturing business. Typically, this concept focuses on the product being produced through the processes on the factory floor. However, can some of the principles of lean manufacturing be applied to other parts of a business? Can lean manufacturing leap beyond its historical product context and more into the realm of process? A growing number of companies are striving to answer these questions with a “Yes.”

Some Background

The term lean manufacturing was coined by James Womack and is used to summarize Japanese manufacturing techniques, specifically the Toyota Production System, or TPS. The term is used to describe Toyota’s approach of expanding traditional thinking beyond basic production tools and tasks.

Lean manufacturing is one of those funny things that can defy definition. For example, you can ask ten people what it is, and you're likely to get ten different answers -- and they are all correct.

I first learned of lean manufacturing almost 20 years ago, and a definition has evolved in my mind over the years. Today, I think of lean manufacturing as a combination of philosophy, initiative and methods for continually reducing waste in all areas and forms to improve the quality and efficiency of a manufacturing process. Even simpler: Lean manufacturing is producing products using less of everything -- materials, time, energy and so on.

Lean manufacturing, however, isn't as simple as doing more with less. It’s a very complex methodology, with many dependencies, that seeks to minimize the resources required for creating and manufacturing a product. Although lean principles strive to make things simpler, these principles actually add a level of complexity to processes.

It’s somewhat ironic that lean manufacturing has tended to address only the product and factory-floor processes. Ironic, because to truly take advantage of all that lean manufacturing has to offer, the same principles can and should be deployed throughout a company -- from the factory floor to the top executive floor. Obviously, and unfortunately, that's easier said than done.

Fostering Lean Principles Companywide

The primary goal for any manufacturing business is making a profit. The factory floor and its processes, which are huge portions of manufacturing companies, are not profit centers -- they are cost centers. These overhead, process, and materials costs are variables that might but probably do not carry over to all aspects of a company.

For lean manufacturing to work on an enterprise level, mechanisms must evolve that foster lean principles. But, because a factory floor and a business as a whole have different problems, different requirements and different ways of thinking, just having the mechanisms in place for lean principles -- such as process planning and materials handling -- isn’t enough.

Also, in many cases, what works on the factory floor might not necessarily translate and work in other parts of a company. Buy-in by all parts of an enterprise is an absolute necessity for lean principles to work companywide.

To apply lean principles throughout a company, it helps to think of an office as a sort of factory, except that its “product” is information. Like raw materials that are transformed into a finished product, paper and digital information also goes through a series of process steps, but ends up spending the majority of its life waiting for someone in the chain to act on it. An office could benefit from lean manufacturing principles by, for example, putting processes in place that would reduce or eliminate information rework, such as incorrect or overlooked data entry. In other words, a primary lean principle for information production is error proofing.

Acceptance of lean principles is not always universal, but resistance is often a matter of misunderstanding. For example, some people perceive that lean principles only reduce inventory and employment levels. On the contrary, lean principles ideally can unlock workers’ hidden talents and increase their capabilities to improve the overall business.

Challenges and Opportunities

The place where it all began, Toyota, has been hard at work to extend its TPS beyond the factory floor. However, it’s proving to be a challenge dealing with nonphysical inputs and outputs and with protracted time frames with multiyear product-development cycles. Indications are, though, that the company is making progress in its facilities worldwide.

The biggest challenge for any manufacturer trying to adopt lean principles is to deploy them beyond the factory floor and apply them to a context of process as much as product. While increasing numbers of manufacturers are succeeding at applying lean principles on the factory floor, the field has a long way to go in applying them to the balance of the organization.

Author’s Note: In the next installment of MCAD Tech News, I’ll discuss an emerging lean principle known as manufacturing process optimization from the perspective of an interesting company, Pelion Systems.

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