Improving Organizational Performance

Improving Organizational Performance

Production Efficiency through Lean Manufacturing

Lean manufacturing focuses on optimizing your processes and eliminating waste. This helps you cut costs and deliver what the customer wants and is willing to pay for. With a lean philosophy, you enjoy the benefit of continuous improvement. So, rather than making rapid, irregular changes that are disruptive to the workplace, you make small and sustainable changes that the people who actually work with the processes, equipment, and materials will take forward. This systematic and simple approach is very effective across all types of industries. What's more, ultimately, a process without waste is much more sustainable. (Shields, 2001).

Lean manufacturing is based on finding efficiencies and removing wasteful steps that don't add value to the end product. There's no need to reduce quality with lean manufacturing - the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.

To find the efficiencies, lean manufacturing adopts a customer-value focus, asking "What is the customer willing to pay for?" Customers want value, and they'll pay only if you can meet their needs. They shouldn't pay for defects, or for the extra cost of having large inventories. In other words, they shouldn't pay for your waste.

Waste is anything that doesn't add value to the end product. In lean manufacturing, there are eight categories of waste that you should monitor:

Overproduction - Are you producing more than consumers demand?

Waiting - How much lag time is there between production steps?

Inventory (work in progress) - Are your supply levels and work in progress inventories too high?

Transportation - Do you move materials efficiently?

Over-processing - Do you work on the product too many times, or otherwise work inefficiently?

Motion - Do people and equipment move between tasks efficiently?

Defects - How much time do you spend finding and fixing production mistakes?

Workforce - Do you use workers efficiently?

Lean manufacturing gives priority to simple, small, and continuous improvement such as changing the placement of a tool, or putting two workstations closer together. As these small improvements are added together, they can lead to a higher level of efficiency throughout the whole system.

Lean Manufacturing Process

The lean manufacturing process has three key stages:

Stage 1 - Identify waste

According to the lean manufacturing philosophy, waste always exists, and no matter how good your process is right now, it can always be better. Lean manufacturing relies on this fundamental philosophy of continuous improvement, known as Kaizen.

One of the key tools used to find this waste is a Value Stream Map (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you'll see the processes that add value and those that don't. You can then create a "future state" VSM that includes as few non-value-adding activities as possible.

Stage 2 - Analyze the waste, and find the root cause

For each waste you identified in the first stage, figure out what's causing it by usingRoot Cause ...