'Lean thinking' is a method that redesigns processes to optimise the entire product flow (the "value stream"), rather than singly optimising each department that a product passes through on its path from raw materials to the end customer.
What is 'lean'?
'Lean' thinking is a proven system that applies to product development and mass production as well as all other areas of an organisation to enable faster flow of value to the customer by removing bottlenecks and reducing non-value-adding wastes.
Lean begins with defining customer value, rather than the approach of "the plant's capacity is X, so it must be kept busy to X". Lean then traces every step that's needed to take a product from raw material to final product ("the value stream") and looks at what actually creates customer value. As researchers James Womack and Daniel Jones discovered, the answer can be a shock: at less than 5 per cent of the steps and time.
Henry Ford pioneered many of the key principles of lean, being the first person to integrate an entire production system under what he called "flow production". Post World War II, Toyota Motor Company in Japan adapted Ford's principles as a way of compensating for its limited human, financial and material resources. Their system, which became known as the Toyota Production System (TPS), was one of the first managerial systems that used lean principles throughout the entire enterprise to produce a wide variety of products at lower volumes and with fewer defects than their competitors.
Lean companies are more alert, agile and responsive than their bulkier associates. In a dynamic, global and competitive business environment, companies must not only achieve a high state of agility and responsiveness, but must continuously and relentlessly search for ways to reduce consumption of all required resources while delivering superb value to their customers and other stakeholders.
What are the components of lean?
The two basic pillars of lean are:
i. the physical, being 'continuous improvement', and
ii. the soft science of respect for people (employees, supply partner and customers), to bring about cultural change.
Improving actions as much as possible to eliminate unnecessary resource expenditures is a never-ending process. Lean organisations implement a formal 'continuous improvement' process that relentlessly seeks to reduce waste (of all kinds) and continually improve their products and services delivered to the customer. Consequently, lean enterprises realise ongoing reductions in response cycle times, production times, costs, required production space and errors.
Lean can be a major strategic initiative focused on major cost efficiencies managed from the top of the business, or it can evolve in smaller discrete initiatives lower down in the organisation. It goes without saying that the preferred route of a "top down" approach will have a major impact, but often organisations propel the process forward on a smaller scale.
What is important is that by whatever means lean is kick started into life it can be a serious long term solution for many businesses. If managed effectively, lean can be the major philosophy that literally unites the organisation in a relentless drive for improvement.
Lean can be introduced at several levels. As noted, clearly a strategic top-down intervention delivers with impact, but many organisations do not have the capacity to commit to a long-term strategic project. Often organisations commit to a variant of lean due to the following factors:
- A cost-reduction exercise
- To cope with specific threats to the business – usually associated with poor relations with their customer base or a particular customer
- Quality of product or delivery problems
- The need to reduce cycle time from order to delivery
- Launching and delivering new products or services
- Developing best value
iDSnet Manager aids lean
iDSnet Manager mainly helps in the realm of 'continuous improvement' and the faster flow of value by providing greater visibility of production data and product flow in the packaging hall — in real-time.
A typical scenario in the packaging hall is that the line has stopped. No one precisely knows why the unplanned stoppage occurred, for how long the line stopped, nor when it started again. This data, if captured over time, can then begin to reveal patterns on which processes need improvement or which equipment needs attention — thus aiding the faster flow of value.
iDSnet Manager is an add on module to Matthews' iDSnet Enterprise software package that is widely used across Australia in manufacturing company packaging halls. This software networks all coders, labellers and other peripheral devices — such as barcode scanners, vision systems and so on — on a single line or across multiple lines to a central PC. This allows for two-way information flow between the machines on the line and the PC allowing data-capture data in real time, as well as increasing automation.
All the data iDSnet captures, is processed and displayed in the form of reports, dashboards and scoreboards by iDSnet Manager, the reporting tool. Or with the open connectivity architecture, iDSnet can easily integrate with existing MES, SCADA or ERP systems and provide real-time data via a system that is already adopted in the organisation.
These dashboards and reports provide greater visibility into the packaging hall — also in real time.
Near-Perfect Product Quality
A lean production system operates like a fine-tuned watch: with each element highly dependent upon the other elements with which it interacts. Since there are no buffers, any part delivered from one work unit to another must meet specifications. Defects cannot be tolerated. Consequently, much effort is expended in designing processes that turn out near-perfect parts (within tolerances) every time.
Also, there are no re-work stations to compensate for defective production. If a defective part is produced, it must be detected immediately (not passed to the next workstation) and the situation resulting in the defect must be determined and corrected before production is resumed. iDSnet Manager helps to raise an alarm when a defect is detected, and records the nature of that defect, thus allowing operators to stop and fix it before resuming production.
For example, if a label is being applied on a carton and the print quality deteriorates making the barcode on the label unscannable, iDSnet Manager can stop the line and let the operators know what the issue is, allowing them to adjust the print quality before resuming the production. This avoids hundreds of cartons with unscannable labels being sent out that factory's doors and down the supply chain.
In essence, lean is a journey that never ends. Each destination reached becomes the starting point for the next journey.
This is the true essence of 'continuous improvement' and a fundamental principle of "lean thinking." Every journey has its own unique circumstances, demanding individual choices and decisions that ultimately set it apart from any other journey ever attempted.
iDSnet Manager helps you in this journey to achieve improved operating margins. Increased flexibility provides enhanced business opportunities in existing or new markets by improving the flow of value to your customer.
Originally published in Matthews blog