Bill Gaw's Triple-Step, World Class, Lean Manufacturing Training Program
World Class Manufacturing

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Lean Manufacturing Training Program
Lean Manufacturing Simulation Game 

Characteristics of World-Class Manufacturing

For the World-Class manufacturer, manufacturing plays a fundamental role in developing and sustaining customer satisfaction through the elements of quality, cost, flexibil­ity, reliability and innovation.

The characteristics of these World-Class manufacturers are:

1. An ongoing company-wide education and training initiative for human resource development to allow everyone to actively participate in the improvement process.
The importance of education and training for all employees cannot be over-emphasized. Studies show that World-Class manufacturers are providing a minimum of forty (40) hours of education and training per employee on an annu-alized basis. In today's business environment, the only long-term sustainable competitive advantage is organiza­tional learning.
2. Relentless pursuit of continuous improvement in all business activities.
The management focus is on establishing operating perfor­mance measurements that drive the behaviors consistent with the goal of continuous improvement in both process and product. Measurements in place focus on rates of improvement.
3. A dedication to developing a competitive advantage based upon superior product quality and service.
The World-Class company creates a level of customer satisfaction through being not only "easy to do business with," but by exceeding expectations. The term "customer delight" is an often-used expression when procuring prod­uct or service from a World-Class manufacturer.
4. Utilization of an integrated business system that links people and process.
All business functions actively pursue a process of factory and business simplification, resulting in a systems integrative approach.

World-Class Manufacturing Results

World-Class Manufacturing gives a company the lowest costs, the fastest time to market, the best customer service and satisfaction, the highest quality, the shortest product lead time, the highest return on investment, and the most productive work force. The results companies are achiev­ing from a World-Class Manufacturing initiative are:

Lead Time: 50-75 Percent Reduction

A lead time reduction of 50-75 percent applies not only to the manufacturing cycle time but also from order entry to product shipment. To accomplish significant reductions in cycle or lead time, the focus is on elimination of cost-added activities. Cost-added activities would include inspection of materials and/or information, rework of material, stor­age of material and subsequent issuing of production material, and moving material from one container to an­other. Our studies show the typical manufacturer has a 70 percent ration of cost-added compared to 30 percent value added activities. The World-Class Manufacturer has a ration of 70 percent work to 30 percent cost-added.

Quality Costs: 45-55 Percent Reduction

The reduction in the cost of quality by 45-55 percent is accomplished through a reduction in appraisal, and inter­nal and external failure cost. Elimination of inspection of incoming material, in-process material, sorting finished product and fool-proofing processes that eliminate rework contribute to a reduction in defects.

Inventory: 40-60 Percent Reduction

A 40-60 percent reduction in floor space pertains to the distance product travels during the manufacturing pro­cess. The preferred method of manufacturing becomes one of a focus on flow and throughput, using concepts such as cellular manufacturing, group technology and continuous flow manufacturing. This method replaces the more tradi­tional approach to manufacture by department where the focus is on maximizing individual efficiency.

New Product Development Lead Time: 30-50 Percent Reduction

With a business environment characterized by shorter product life cycles a competitive advantage is achieved through time to market. Reducing new product develop­ment lead time enables more frequent product introduction and roll out of product performing to a slot in time.

Manufacturing Costs: 20-40 Percent Reduction

The reduction in manufacturing costs results from a man­agement focus on process improvement throughout the business. Process improvements are achieved through elimination of non-value-added activities (see lead time
reduction) driving factory and business simplification. Reduction in manufacturing costs is a confirmation of quality improvements, cycle time reduction, reduced in­ventory levels and space utilized to manufacture.

Material Costs: 5-20 Percent Reduction

Material costs are reduced not only by focusing on price, but on total costs. Approximately 40 percent of total cost of purchasing material from the supplier base is in non-price areas. Examples of non-price areas are inspection of incoming material, storage of material, rework of material, and excessive material handling before performing value-added activities.
Achieving World-Class Manufacturing results in the busi­ness becoming:
1. The Preferred Supplier in World Markets
2. The Capital Magnet In World Financial Markets
3. The Sought After Place of Employment
4. The Business of Choice by the Community

To be Continued