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 Lean Manufacturing 

Management Technologies
Part 1 of 5 

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Introduction

Resolving today's intermeshed problems requires striking a delicate balance between the needs of the company and the needs of the individual. All modern management technologies recognize that people, working alone and in groups, are the basis of a company's long-term economic survival. Yet these technologies often are implemented with the very aim of reducing headcount, seen as a major generator of cost.

This is a limited and ultimately unprofitable view, born in part because of the lack of an integrated view of modern management technologies. Now, however, a new multitechnology view is possible, thanks to the power of matrix diagrams.

Using a two-dimensional matrix to represent the technology for managing the design, manufacturing/distribution, and costing segments of a company's industrial process allows both the control aspect and the change aspect of each process segment to be addressed specifically (see Figure 1). Because the two axes of the matrix cross each other, the control and the change aspects are shown not as mutually exclusive antagonists, but as complementary sources of profit.

For example, making a component is an activity in the production process. As such, it sits at the crossing point, within "the process segment" in the center of the matrix. The control aspect includes the planning and execution techniques necessary for defining the part and getting it produced at the right time with the right quality and quantity.

The change point of view, however, takes a different slant on making the component, by using techniques to simplify and to accelerate its production, both to improve performance and also to reduce the need of control.

Pushed to the extreme, the techniques included in the "change" side could even lead to not producing the component at all, either by incorporating it into another already existing component or, ideally, by changing the design of the finished item so that the component and the resources needed to produce it are no longer required.

The advantage of using a matrix to represent management technologies lies not only in the multidimensional view it affords, but also in the fact that matrices can be coupled. Just as the design process is coupled to the production/ distribution process and the latter is coupled to the costing process, so can the matrices representing the corresponding management technologies be coupled to each other to depict the management and the process flow.

Another advantage of the matrices is that they can be stacked to depict concurrent processes. For example, the design process must take into account the production/ distribution process as well as the costing process, and this should be done at the design stage, where 80% of the product and process cost is locked in. At the costing end of the industrial flow, profitability will depend on how well the design requirements and the production-distribution requirements were satisfied, and profitability potential should be seen from the beginning of the industrial process. Stacking the matrices permits this.

Any company wishing to be successful must answer three basic questions, each one related to a specific portion of the industrial process:

          1. What does the customer want? (Design)

2. How do we make and distribute it? (Production and distribution)

3. How well did we do ? (Costing and performance measurement)

Finally, each portion of the industrial process relies on a technology family built around a "star technology":

1. New product development and strategy with the "star technology" Quality Function Deployment (QFD);

2. Resource planning and waste reduction with the "star technology" Manufacturing Resource Planning/Just-in-Time/Total Quality Control (MRP II/JIT/TQC);

          3. Cost accounting and cost reduction with the "star technology" 
Activity Based Costing (ABC).      

To be Continued


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