Boost the Value of Your Manufacturing Business with Lean
Originally published on October 20, 2022
Updated on October 24th, 2022
Lean is a way of optimizing your manufacturing company’s processes to match production with demand. It can reduce waste, boost value and narrow the response time from suppliers and to customers. When Lean works, it increases productivity and profit.
Mike Sibley, leader of the James Moore manufacturing team, and Ernie Richardson, co-owner of Teaching Lean, Inc., talk about what Lean means, how it’s incorporated into leadership and company culture and first steps for getting started. Ernie has 25 years of manufacturing and human resource management experience, including with Toyota Motor Manufacturing. He is also the co-author of The Toyota Engagement Equation.
What is Lean?
Toyota pioneered many of the principles practiced by Lean manufacturers today. Components of a successful Lean approach include standardizing your processes and evaluating your success with key performance indicators (or KPIs). It relies on making incremental improvements in your products and processes over time and getting rid of redundancy and waste.
Adopting a Lean approach means working toward continuous improvement, both in your company and your employees.
“As a Lean leader, we need to be able to engage people to be able to improve their work areas every single day,” Ernie said. “it’s a big step for a lot of companies, particularly if the company is used to firefighting.”
Lean depends on cultivating a good company culture.
Successfully implementing a Lean approach at your company requires an all-in mindset. You can’t pivot to Lean manufacturing while keeping a distinct line between the production and administrative aspects of your company. While many components of Lean focus on manufacturing, it’s also crucial that other teams, such as marketing and customer service, support Lean-based programs.
When Lean is consistently applied in the way you do business, it can be transformative.
“If we don’t have a culture in the company to be able to accept the tool, then it’ll be just be a flavor of the week,” Ernie said.
Some employees may fear that if they make improvements and minimize waste, they will optimize themselves out of a job. It’s incumbent on company leadership to explain that Lean is not about eliminating people. It’s about eliminating unnecessary steps and streamlining the process of production and sales.
In fact, Lean manufacturing requires investing in your employees’ growth.
“You get people to come into your company because of money. You get them to stay because of challenge and development,” Ernie said.
Remember that cultivating a good company culture is a task that is never finished.
Leaders must support a Lean approach.
Lean requires long-term commitment from a company, and it’s on leadership to stay the course. Leaders embody the company’s culture. They have tremendous impact in the way they conduct themselves on the production floor – in what they say and even through their body language.
As leaders, you don’t need to directly be involved in all steps of the Lean process, but you do need to support it. Take the time to train your team well and empower them to engage. This will cut down on the time you spend fighting fires.
“The biggest gap in what we see in a lot of companies is that leaders sometimes feel like they don’t need to change,” Ernie said.
Remember that the people doing the work are the experts. Rely on their knowledge to identify problems and find fixes, and build an atmosphere of open discussion. One goal of Lean is to create self-directed work groups that can improve themselves without constant input from leadership.
“We use team-oriented problem solving and let the team figure out where the solutions are because they know best,” Mike said. “They know where the waste is. They know where the time is being spent. Sometimes as leaders, it’s just a matter of supporting, holding accountable, giving the information and training. It’s also about getting out of the way and letting them do what they do.”
Increasing value leads to more long-term profitability. This helps your company stay sustainable, introduce new products and weather hardships. Make sure that your team knows the value of the improvements they’re making as they integrate Lean into their processes. When they help the company save money, reward their efforts. This helps them stay invested in the success of the company and feel a sense of ownership.
Remember to start slow.
Your company can’t jump into a full-on Lean approach instantaneously. Start with standardization and KPIs. Then move into analyzing leading and lagging indicators. Keep in mind that some benefits of a Lean approach take time to manifest themselves.
Standardization provides the foundation to understanding how to make improvements. It can reveal whether your company is understaffed and allow team members to gage whether they’re meeting expectations. KPIs help your team determine whether they’re achieving the results they expect.
If your company lacks effective standardization, don’t try and overhaul everything at once. Start with one process that needs to be improved and standardize it first. Develop a KPI for it, and then move onto the next process. Gradually build up in this step-wise fashion.
As you put standardization and KPIs in place, problems will inevitably follow. Work on reframing problems as helpful indicators of where your weaknesses are.
First steps toward a Lean approach
- Train company leaders. Leaders need to understand the Lean concepts first. They also need to know how to support standardization.
- Identify your biggest problem. Start with your company’s biggest headache and work on adopting standardization and KPIs for that first.
- Develop your people. Remember that the people doing the work have the most expertise in spotting waste and room for improved efficiency. Trust them to define what should be happening and then make improvements accordingly.
“At Toyota, we always said we’re a company that develops people. We just happen to build cars,” Ernie said.
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