Congratulations! After what seems like an eternity, your manufacturing business is finally doing great. You and your team have put in the work, pounded the pavement and gotten your feet in doors that you once thought were locked tight. With visions of dollar signs and soaring stock charts in your head, expanding your business is clearly the most logical and appropriate next course of action… or is it?
While countless businesses have found themselves in a similar position throughout history, this is an all too common misstep and one that has been the downfall of so many businesses. When business is doing great and profits are on the rise, hiring a premium sales staff and investing in more machinery is an easy sell but that doesn’t necessarily mean it’s the right move, or at least not right now.
Before we go any further, let me preface this by pointing out the obvious fact that each business is different; each has its own needs and goals in mind, and therefore it should go without saying that you should assess and identify your own unique situation before considering your options.
One facet to first look at is your company’s current efficiency metrics. As a business grows, any problems and inefficiencies it has are magnified. What was once an easily correctable, yet overlooked scheduling cost could become a gross expenditure, now ingrained in your company culture and difficult to correct. That’s where Lean Manufacturing comes into play.
Lean manufacturing is the practice of eliminating wasteful practices that fail to add value from the customer’s prospective. Sure, having excess inventory on hand brings some piece of mind in knowing that you have extra supply in case of unplanned demand. It can also limit the need for stringent oversight, but these shortsighted interests are easily outweighed by the added costs. Costs that either deduct from the company’s profits or are passed on to the customer. Either way, its important to identify and correct these wasteful activities before they become a much larger problem.
The idea of lean manufacturing was first utilized in the 1930's by Toyota and later expanded upon by James Womack and Daniel Jones in Lean Thinking (1996). Their thoughts on lean identified what is known as the 5 core principles of lean manufacturing. These principles are still heavily relied upon today and extend beyond the manufacturing industry. These 5 core principles consist of: Value, The Value Stream, Flow, Pull and Perfection.
Identifying Value – Identify what value is from the customer’s perspective. It's imperative to first identify what value means to your customers. In other words - what are they willing to pay for? Your sales team may be thrilled to have luxury company vehicles but if they are not being used to better meet your customer’s needs, they are not adding value for the customer.
Value Stream Mapping – By mapping out your company’s workflow, you can identify where value is being added and to what degree.
Flow – This is where you need to ensure that your value stream remains smooth and products are easily transferred from one value-added station to the next.
Pull- The idea of having a pull system ensures that work is only pulled when there is a demand for it.
Perfection – Effectively implementing a lean production system is no simple task and it needs to be continuously assessed and improved upon as needed.
I plan to explore more deeply into the core principles of lean manufacturing and the different ways that they can improve your business’s overall effectiveness in later posts, but today I just wanted to give you a high-level overview so that you could see how impactful lean manufacturing could be for you and your business.
If you are serious about implementing lean manufacturing into your business or just want to how our PlantStar 4.0 MES can help accomplish this, be sure to schedule a free demo today! We have been helping manufacturers implement lean management into their businesses since 1976 and we’ve seen it all. Let us help you become our next success story!