Lean manufacturing or Lean shop floor? Why most companies are in a lean box! By Andrew Boyd Lean manufacturing, lean manufacturing and even more lean manufacturing! That’s all we seem to hear these days when we look at companies in the manufacturing sector. I have been a consultant in the manufacturing sector now for almost 10 years, and before that I worked in motor manufacturing. Every time I go to a new factory to offer advice and expertise I am always directed to the shop floor! In nine times out of every ten I end up implementing a change programme to introduce ‘lean’ techniques to the already battered and unappreciated workforce on the shop floor. I recently had a real deep think about all the projects I had been involved with and how many of them really targeted the correct areas for true lean… it turned out to be very few! If we go back to Goldratt’s model for the theory of constraints as defined in his many works including the popular book ‘The Goal’, he states that for improvement in the right direction there are only 3 levers a manufacturer should focus upon. 1. Throughput. 2. Inventory 3. Operational expense Throughput he states should be as quick as possible, to turn raw material into finished goods as soon as possible and sell them. Inventory he states should be as low as possible so we do not tie up capital in goods we have not sold. Operational expense he states should be as low as possible as these are direct costs to the business. I couldn’t agree more. I have used his methods many times; I have seen great benefits and have seen companies thrive through the implementation of these methods. However it is usually at shop floor level that we see such measures taken. How many times do we alter shop floor processes to improve throughput? The fact that an order takes two weeks to administer, the parts take 6 weeks to arrive and the goods spend 3 weeks in the finished goods warehouse seems to pass many management teams by! I challenge you to go into any traditional style manufacturer and analyse the time-line from when an order is placed by a customer to the delivery truck taking it out of your finished goods warehouse. Just look at how much time the product spent in manufacturing. I will guess that in many cases it is between 10 and 20% of the overall throughput time from order to delivery. Yet the first place we try to improve is the shop floor. Any why? Because the administration areas are all a bit woolly, and are a black box art! Inventory reduction programmes are usually done on the shop floor! Okay some process re-engineering at shop floor level will help reduce work-in- progress, but most of us know that the valuable inventory is sitting in finished goods warehouses or in raw materials/components warehouses. Yet we rarely get a chance to help improve the administrators processes, the ones who forecast the stuff and buy the stuff in the first place. And how about operational expense? The first employees to go out the door are usually the ones adding the real business value…the shop floor employees! But we continue to employ the numerous pen pushers in administrative roles because we don’t exactly know what they do all day. The shop floor has become an easy target in my view for cost cutting, targeting change and attempting new initiatives. Whilst I do believe there is work to be done on the shop floor in terms of the Goldratt levers, I believe that equally important, and probably more important, is the need to target the administrative functions too. I see articles preaching a similar message by people like Dan Jones, and he talks a lot of sense, like many others. There is more and more material becoming available on how to go lean in the whole enterprise. But let me tell you, very few companies have implemented it, very few even know how to do it, and many more talk about it but never do anything about it. I remember the great UK gold rush of the 1990’s. It was called BS5750. In the gold rush of the USA in the 1800’s the only men that got rich were the guys selling the shovels! BS5750 was like that. Accreditation houses and consultants got fat and wealthy while most client companies played lip service to a book of procedures on a shelf that no one ever looked at. That’s exactly what’s going on with enterprise-wide lean initiatives. A lot of lip service and hot air but little evidence to support it! I am looking forward to the day when we freely talk of lean manufacturing, lean sales, lean procurement, and lean administrative support. Until we do accept this challenge, there will be a limit to how lean an organisation can become by just targeting the same old people. The reality is, that the companies, that really do implement it will be the ones that reap the heavenly rewards! Just one final note to end on. If you could reduce the lead-time you offer to customers for your product from 6 weeks to 1 week, what would that be worth to your organisation? …So why are you not doing it?