September 10, 2008

Hi MBBP Subscribers, 

Today, we are bombarded with information about lean – what it is and about what lean tools can do.  Still, there is very little practical information on how to implement lean transformation and lead the change.   

Every company’s lean journey starts under different circumstances, so there can be no one recipe, no "right way."  But, to ensure success, there are many factors to consider before embarking on your lean journey.   

Whether your company is either implementing or just thinking about pursuing lean manufacturing, you'll want to be sure to read this week's bulletin, "The Fundamentals of World Class Lean Manufacturing."

The new article appears below.

Have a nice day, and stay connected.

  

Bill Gaw

Business Basics, LLC
6003 Dassia Way
Oceanside, CA 92056
bg@bbasicsllc.com 
760-945-5596

The Fundamentals of Lean Manufacturing Success 

Many years ago Vince Lombardi led the Green Bay Packers football team to unprecedented success by having an almost obsessive focus on doing the FUNDAMENTALS very well.  

It’s amazing how many companies have great visions yet fail to achieve their full growth and earning potentials. They're a lot like the Green Bay Packer's football team before the arrival of Vince Lombardi...all the potential in the world but with no focus on executing the fundamentals of their business nor their profession. 

I realize the word "FUNDAMENTALS” is not very sexy. But it is a very important thing to understand.  

The fact is, the fundamentals of manufacturing... the things that serve as a solid success have not changed since before I was born... and won't change after you're dust. 

It's tempting to think that they do -- that the introduction of Enterprise Resource Planning (ERP), Material Requirements Planning (MRP), and Six Sigma change the fundamentals. 

I understand the temptation. 

I can only caution against it, and invite you... urge you... to be a serious student of manufacturing history and both the evolution and revolution in manufacturing. 

Mastering the proven fundamentals of what has worked in the past will give you the foundation needed to predict what will work today... and tomorrow! Are you aware that the Japanese success can be attributed to their study and mastery of Henry Ford’s manufacturing fundamentals.  

Henry Ford first introduced manufacturing fundamentals at his River Rouge operation in 1920. Using these fundamentals as a basis for his production line concept, the Ford plant was able to go from receipt of iron      ore to casting the engine block, and to shipment of the machined engine block in a final assembled car in an astonishing forty-eight hours. The Japanese used Ford's fundamentals as their roadmap to world class      manufacturing. NOW THAT’S LEAN!

The first thing business teams need to do is identify the fundamentals that are requisites to their success. Next, they need to provide a process for obtaining “top-to-bottom” company commitment to the flawless execution of these fundamentals. This commitment becomes a launching pad for achievements beyond all expectations. 

In today's competitive manufacturing environment, it takes More than quick fixes, outsourcing and downsizing for Companies to consistently achieve their growth and profit objectives. While these options may yield temporary financial relief, they will not lead the way to long-term manufacturing success. For manufacturers to consistently exceed performance expectations, they need to fully understand and effectively execute the FUNDAMENTALS of profitable growth.  

While many of these fundamentals have been documented and presented in hundreds of management articles, books, video presentations and seminars, their intra-relationship and synergistic importance to achieving solid growth and healthy profits has not been effectively defined and communicated.  

Over the past 30 years, we were led to believe that computerized systems would provide the solution to all ourgrowth and profit problems. In manufacturing and distribution, systems like ERP were to provide the computer sophistication to significantly improve our delivery chain performance. In engineering, Computer Aided Design (CAD) systems were to be the high-tech innovation for improving engineering design and speeding the time-to-market process.In sales/service, Microsoft Office was to provide the missing link in effective business communications while e-commerce software was to improve order sales capture rates and order processing speed.  

In their efforts to draw closer to customers, many business management teams have lost focus on what should be acompany's primary success target-- profitable growth. Theyhave pursued Total Quality Management (TQM), Enterprise Resource Planning (ERP), Business Process Reengineering (BPR), ISO-9000, and Six Sigma with each respective guru reassuring them that if they followed their program ... the bottom-line would take care of itself.  

Well, it hasn't happened! Like most perceived panaceas, eachof these programs received a lot of hype but produced fewsuccess stories. While these programs contributed to better quality and improved customer service, they accomplished little towards helping companies identify and achieve their full growth and profit potentials.  

For a measure of their shortcomings, one needs only to spend some time in a manufacturing facility -- especially during the last weeks of the final financial quarter. In a typical company, you'll find that converting the quarterly financial forecast into reality still requires costly overtime, internal/external expediting, last minute "on-the-run" product changes and even a little "smoke and mirrors." Results are scrap, rework and warrantee costs that negatively impact profitability and production problems that hinder growth. Companies have spent many thousands of dollars in pursuing MRP/ERP and ISO-9000 certification, only to see their business decline due to uncontrolled operating costs that produced noncompetitive pricing. Other companies have won the Malcolm Baldrige Award for Quality and Business Excellence and subsequently fell far short of achieving growth and earnings expectations.  

So, after introducing all these computer systems and more, why is it that most businesses are still struggling to sustain profitable growth and are no where close to achieving their full growth and profit potentials? The first reason is simple --the results achieved by any computer system are only as good as the people at the controls and the integrity of the data they provide. The second is complex -- most business managers facing major day-to-day problems and constraints adopt a totally reactive management style. Consequently, their time is consumed with "band-aiding" and/or finding ways to work around system and process problems -- leaving them little or no time to analyze and eliminate the root causes of ineffective systems and processes.   

How does one turn around such a classic, "cart before the horse" syndrome? What's required is a top down, in-depth understanding of the importance of the fundamentals of profitable growth and a total commitment to their consistent and tenacious implementation. 

Like Vince Lombardi, who achieved success by having his team focus on the mastery of football fundamentals -- we need to have our manufacturing teams focus on the mastery of manufacturing fundamentals.  

Proactive planning and tenacious execution of fundamentals require leadership above and beyond just satisfying "day-to-day" accountabilities. Some managers can't envision the benefits of mastering relevant fundamentals, other simply can't find the time. Like practicing blocking and tackling in football, it's not glamorous, and like most football heroes, managers prefer to run with the ball. But without the tenacious and flawless execution of manufacturing fundamentals, companies will never exceed expectations.  

It is time for companies to put a hold on sophisticated systems development that cause self-inflicted, day-to-day chaos. In its place, they should immediately initiate an action learning program for gaining a company wide understanding and acceptance of the importance of manufacturing fundamentals. Once buy-in and commitment have been achieved, aggressive planning and tenacious implementation must follow. In short, let's put the "horse before the cart" -- such a program will build a solid foundation for redefining and revitalizing a company'spursuit of growth and profits.

Over the past years, I have been writing to you about the competitive advantages of World Class Lean Lean Manufacturing---now is a good time for you and your company to implement and/or optimize your lean manufacturing initiative. It will help you lower factory stress levels, end shop floor chaos and eliminate the "end-of-the-month" crunch. Finally, take positive action, if you haven't explored the benefits of  optimizing your manufacturing performance... here's a reason to take action today...

I've just put together what I consider to be the best world class lean manufacturing training program available anywhere... not in the books of Amazon.com... not it the library of APICS... and not in the Harvard Business School Press.  I've entitled it: