Implementing lean correctly

Implementing lean correctly

Throughout 2012, companies increasingly reported the benefits of lean operations, and how well the processes could be used to increase efficiency and productivity in not only a manufacturing setting, but in healthcare, IT and other sectors, reports.

Now that 2013 is here, it's time for manufacturing companies to make goals for the year and develop new systems to improve operations. This, however, requires large-scale changes that many companies struggle with. Manufacturers are often reserved when it comes to trying out new IT solutions, which are of growing importance in the sector in recent years.

This has led many to skip some of the most crucial steps when it comes to introducing lean operations and lightening the operational load. Frank Hill, lean manufacturing expert at one Massachusetts-based firm, said bringing lean into IT systems is as crucial a step as any for improving efficiency.

"Whether it’s as simple as email or as complex as MRP, today’s businesses are driven by IT," he wrote. "Systems running at half speed or not at all can result in missed deadlines, lost revenues and reduced customer satisfaction. In some cases, it can even mean contractual or regulatory penalties. Whether downtime is planned or unplanned, many assume that a systems failure is a given … What they don’t realize is that while the threat of downtime is always there, they can prevent it from happening by becoming proactive."

According to the media outlet, studies have shown that downtime can cost as much as $110,000 to $150,000 per hour. One study, performed by Coleman Parkes Research, found manufacturers lost, on average, $196,000 a year due to outages. The enormous costs associated with downtime linger on, too, as it takes time for production to get back up to the pace it was before the event. This downtime also leads to waste in several areas of the supply chain, and can quickly spread to envelop an entire operation.

Manufacturers can also use lean strategies to prioritize which systems should come back online first, Hill added.

"While the obvious answer is 'all of them,' some applications require more protection than others," he said, adding that the best way to assess this is to look at the yearly downtime of any asset, and the costs associated with it.

"While yearly downtime could be a single instance or multiple, the cost remains. Often the cost of an outage is not factored into cost of goods sold, and is left to be absorbed by the company," he concluded.

Lean manufacturing, which focuses on eliminating waste and creating value in previously unexplored areas, was developed by Toyota, and has since evolved to include just-in-time processes, or flow, and autonomation. 

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