What is Driving the Resurgence of Lean with Manufacturers & Distributors
Lean manufacturing is rapidly trending up with Manufacturers and Distributors. And it is a trend that most industry experts expect will continue well into the future. The driving need behind this resurgence relates to growing labor shortages, changing employee sentiment, increasing costs, and a new awareness that Digital Lean has proven to significantly boost productivity, increase efficiency and drive higher levels of employee satisfaction and profit.
What is Digital Lean?
The practice of lean manufacturing has been around for close to a century. And it has been remarkably successful when properly administered. But, in this new age of Industry 4.0, digital transformation is providing even greater opportunities to streamline processes and provide a better working environment for employees while simultaneously reducing operating overhead costs.
Lean manufacturing has always focused on strengthening operational elements that add value and eliminating those that do not, and Digital-Lean builds on this foundation by leveraging today’s technology to further reduce the time and effort required to complete a task. Manufacturers and Distributors alike have benefited from improvements such as paperless inventory picking, supplier collaboration portals, ecommerce, customer portals, automated 3-way matching and real-time reporting. Additionally, Manufacturers are seeing significant gains by integrating machine monitoring programs, electronic Kanban, and hundreds of other programs to eliminate waste and increase value added activities.
What Should You Know?
There are five guiding principles that can help manufacturing and distribution companies as they transition to a new way of operating.
Identify the value for your customer. Success begins at the end of the operating cycle—with your customer. Determine the value of your product by what your customer needs and demands.
Map out the value stream. Using this defined customer value, the next mission is to map out your value stream, or the process that will take your product or service from the quote to your customers door. Eliminate any steps that do not add value.
Create seamless workflows. With your operation mapped out, it is easier to examine and analyze each step. Find and close up gaps to create a continuous flow. This is an area where companies can also manage personnel and see where each worker adds value and position them accordingly.
Switch to a pull-based approach. A pull-based approach reduces inventory waste since companies produce or stock what they need. In manufacturing, Make to Order (MTO) by default is a pull system, where the cycle begins with a Customer order. Make to Stock (MTS) manufacturers typically have replenishment levels set based on market expectation, long-term agreements, customer Kanban strategies, etc. When a Customer order or release comes in, the material ships from stock, creating a pull on the value stream to replenish inventory as a result of the Customer order. For distribution, this is more complicated as there is a dependency on historical and forecast data to establish replenishment levels. In all cases, a strong supply chain strategy is essential.
Repeat the process. Lean manufacturing is more than a one-time optimization strategy. It is an iterative process of assessing and optimizing workflows. It is a philosophy that should be rooted in your company culture, communicated to every worker, and be the foundation for your operation.
In order to remain relevant and grow in today’s unpredictable landscape of global economics, a company must be able to flex, but not break. The way to achieve this is to adopt a Digital Lean approach today!
About the Author
Michael Canty is an Executive Vice President with Synergy Resources LLC with 40+ years of experience working in the manufacturing and distribution industries. A lifelong learner, Mike has gained recognition and certification in change management, Lean practices, TOC, and Supply Chain Management. Synergy Resources LLC is a professional consulting firm on a mission to help manufacturers and distributors realize their full potential.