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Cutting the Fat

‘Lean’ has become a familiar term in European manufacturing, particularly as markets have become more competitive and companies seek to make improvements in the services they provide to customers, or achieve sustainable process efficiencies. Given the highly competitive nature that is characteristic of industry today, and especially the current challenging economic situation, the need to maximise efficiencies and make savings in every area of a company’s operations has never been greater

Put simply, if a company’s successes are based on teams and individuals performing ‘heroics’ in order to get the required result, then the reality may be that key processes are not fully controlled and wasteful practices are being developed. While customers may appreciate the dedication that ensures a project is delivered whatever the odds, they are often not prepared to pay for the inefficiencies that may be generated – and in competitive markets, no company can afford to tolerate such levels of waste.

The Lean Philosophy

One solution to these problems that is increasingly popular among companies across many end markets is the ‘Lean Manufacturing’ philosophy. Originating from Japan, Lean offers exactly what it implies – a healthy, efficient approach to industry, where companies can expect to benefit from better quality, more productive staff, faster inventory turns, quicker delivery times and, ultimately, greater customer satisfaction. The challenge, as with all types of business systems, is to turn the rhetoric and promise into tangible and measurable results. Cynics may be tempted to dismiss Lean as nothing more than another business ‘fad’, but, in fact, more and more companies are demonstrating that quantifiable results can be achieved by embracing these principles.

Since the overall aim of the Lean approach is efficiency and simplification, it is appropriate to start with a simple definition of the principle. As summarised by James Womack, Chairman and CEO of the Lean Enterprise Institute, Lean is:“Getting the right things to the right place at the right time in the right amount, while minimising waste and being open to change.”

While this definition underlines the guiding principles of the Lean philosophy, there is no template that can easily be applied to any business because no two companies’ needs are exactly the same.To be most effective, therefore, Lean demands that companies and the individuals that work within them take a long and dispassionate look at how they work and the systems they use.They need to consider carefully what these approaches achieve and ask themselves if they could be done better.

Efficiency of Business Components One of the most telling indicators of how efficiently a business is operating is the amount of time spent on different activities.More specifically, it is necessary to examine each activity not just for the amount of time expended, but in order to analyse the value that it adds to the overall success and profitability of the company. Activities therefore need to be measured in terms of their ‘value streams’ – the process by which a company converts customer requirements into something that can be sold.This approach – called ‘value stream mapping’ – makes it easier to see which activities add value to the business and which do not. What is often remarkable is how this exercise highlights the amount of time spent on areas that deliver nothing in return.

Looking at how time is split over the duration of a project or process can be just as revealing.We all know how the pressure increases as deadlines approach, but it is remarkable to see how this typically reactive approach affects productivity towards the end of a project, or to the end of a period when targets need to be met.

For companies new to Lean, a typical evaluation exercise may reveal an area of production where only a small fraction of activities are considered to be truly value adding. Problems and issues identified may include shorter than anticipated line availability, longer changeover times and high levels of deviations and non-conformances, all of which can contribute to a much lower than expected overall equipment efficiency (OEE).

Only by collecting this type of evidence can an improvement plan be developed and, more importantly, employees engaged to support this activity.We are all to some extent resistant to change and the ‘we’ve always done it this way’ mentality is something that can be very difficult to reverse.

The starting point for any Lean exercise therefore has to be a comprehensive review of how company operations and processes are currently undertaken and managed.Performances need to be measured and targets agreed for improvements.Again, these will be specific to each company but typical areas of focus will include on-time delivery, right first time, safety, sales won and projects completed to plan.With such defined key improvement objectives and an agreed scorecard to measure these, a plan of action can then be put into place.

Lean Roadmap

Every company will have a different approach to establishing a Lean programme, but most will start with a pilot activity,where one area of business is targeted to identify and implement improvements.This ‘Lean roadmap’, which is carefully audited to ensure any changes are real and sustainable, can then act as a template which is rolled out across other areas of the business.

One of the key tasks in the Lean process is to identify and then remove barriers that are preventing a smoother and more efficient operation. A typical Lean Roadmap will then be broken down into five key stages.

The first stage is ‘define’, where the problem is initially identified and the reasons behind this discussed and agreed. This is followed by the ‘stabilise’stage which ensures that immediate and essential actions are implemented to improve the situation.The third stage is to ‘improve’,where the stabilising actions are further enhanced to make sure that what is agreed is a workable and long term solution. It is also important to remember that improvements do not have to be complicated or expensive – indeed, very often the opposite is true.Simple solutions can score major successes; with clear definition and analyses of current problems, something as simple as installing production line accumulators to collect product at key points during production can help to balance the flow between two processes that run at uneven speeds,and may then reduce the need for operators to wait around for product.

The ‘improve’ stage ensures that the changes are robust and can be sustained. The next stage – ‘control’– puts in place and manages the necessary monitoring and regular audits to ensure that the new practices are maintained.However, just as important is the need to look for further improvements and the ongoing development of the programme – and this is the final stage of the process, to ‘pursue perfection’.The Lean programme can never be regarded as finite or complete. It has to become a state of mind and a way of life where everyone continually questions and challenges what they do, and seeks to remove barriers and make improvements wherever possible.

Remember the People

For this reason, it is vital that employees are engaged in this activity from the start. Automation may be increasing throughout all areas of the industry, but people remain a valuable resource and talent that needs to be nurtured and looked after. If employees play a part in agreeing and setting targets, and if they are kept informed of how these changes are benefitting everyone in the business, then they will become more content and happy in their work, which in turn helps to lead to greater productivity throughout an organisation. Equally important, as the Lean programme is extended throughout a business, is that those who have already experienced its positive benefits will help to ‘sell’ it to their colleagues.

There is always likely to be at least some resistance to the implementation of new procedures.While employees need to accept that these new practices are nonnegotiable, some companies have found that sweetening the pill with a series of rewards that recognise achievement, effort and targets met, can make a major contribution to the successful conversion of operations to a Lean approach.





Conclusion

So much for the theory – the one question that anyone considering implementing a Lean procedure wants to ask is,does it work? Companies naturally tend to play their cards fairly close to their chest when it comes to reporting the results and successes of becoming Lean, but a search on the internet will reveal a number of examples of company achievements. Typical success stories may include seeing one organisation improve its ontime deliveries from 63 per cent to over 95 per cent, another take its ‘right first time’measure from 76 per cent to over 95 per cent, and a third reduce its overdue projects from 37 per cent to less than five per cent.Another example saw project lead times reduced from over 50 days to less than 30 days.

Albert Einstein observed:“Without changing our patterns of thought,we will not be able to solve the problems that we created with our current patterns of thought.” Lean demands a new approach, a willingness to challenge the status quo and to embrace change. It delivers healthier and more efficient companies that in turn can offer enhanced levels of service and value to their customers.



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Dave Smith has worked in manufacturing for 25 years, gaining experience in a wide variety of industries in both operations and continuous improvement leadership roles. He joined Catalent Pharma Solutions at the end of 2009 as Continuous Improvements Director. Prior to this, Dave was the Operations Director for a multi-site food distribution business where he implemented a number of key improvement programmes that significantly improved customer service while driving down costs. Dave gained an MSc in Manufacturing Management from the University of Derby and is currently working towards attaining his Six Sigma Black Belt Accreditation. Email: dave.smith@catalent.com
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