Agui Blog

How does Lean Manufacturing help us to be more competitive?

Posted by AGUI on May 30, 2019 11:30:00 AM

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There is a lot of literature on Lean Manufacturing, and how to apply its techniques to proper management, that focus on minimizing the losses of production systems and maximizing the creation of value for the end customer. Therefore, our objective as a factory is to apply it to improve our competitive position for the customer (flexibility and punctuality) by reducing the amount of economic-financial resources used internally.


The main objective when talking about the Lean Manufacturing method and its practices is to implement a change and focus on what really adds value from the start of a production process until the end. A system that seeks maximum efficiency in all areas to improve the competitiveness of a company and optimize its management and development.

Achieving a lean production process requires the implementation and systematization of a series of manufacturing techniques that reduce or eliminate all types of waste, waste being understood as any process that uses more resources than strictly necessary. Eliminating waste will yield an improvement in quality and reduce both production time and cost.


Deadline optimization and increased flexibility


When we talk about the term Lean, there is one key indicator: the deadline - the delivery time as an engine that drives the entire production chain to work at the same pace to meet customer demand. The objective is simply to have a value chain that's as short as possible from the time materials are received from suppliers and manufactured, until the materials are shipped to customers.

Another key principle of Lean Manufacturing is flexibility. Making the process flexible requires managing ever shorter production deadlines, while at the same time being able to reduce the batches in production. Shorter delivery times require having no inefficiencies in terms of stock, as well as having highly qualified personnel who can move from one production station to another.

Many techniques and practices related to Lean Manufacturing are used to achieve these objectives, with the more useful ones being:

  • Lean Kanban
  • Value Stream Mapping
  • OEE
  • 5S
  • Pull/Push System
  • Identification of strategic technologies and supplier development


Push/Pull systems


It's very important to consider what will activate the production button at each work station. Are we going to make to stock or make to order?

Push and pull systems are two approaches for managing operations. In the latter, the items will be manufactured or purchased in response to the demand. In the former, they will be manufactured or purchased based on what is planned or anticipated. In the end, they are no more than production planning tools intended to eliminate waste, shorten delivery times and, ultimately, reduce costs. 

In a multi-technology factory, where many different processes are combined with local and distant suppliers and with predictable and unpredictable customer demands, it is very likely that the two systems will have to be combined; they just have to be well defined and controlled so stocks don't swing uncontrollably.


Are you losing money due to excess stock? Do the math!


Kanban sizing


The Kanban method makes it easier to control the work flow in a production line scenario. Known as visual cards (kan means visual, and ban means card in Japanese), they involve a physical indication - it can also be electronic - that informs a work station when to manufacture, what to manufacture, how much and where to send it. It can be, for example, a card that travels with a bin such that when the material inside that bin is used up, that card returns to the supplier to start manufacturing again.

The process that precedes our own work station is called the supplier, and it may be inside or outside our factory. Suppliers only manufacture for a subsequent demand process. This reduces the inventories of the semi-finished product, but it requires working within the flexibility (change times, versatility, batch reductions...) of each of the processes in the supply chain.

In project management, the Kanban methodology is thus intended to yield the maximum performance from the company's work flow. That is, to track time continuously and evaluate work accurately in order to determine performance, detect problems and adjust workflows accordingly.

The Kanban method also improves the agility of work teams since they know at all times what they have to do without relying on new instructions.


Identify bottlenecks


It's important to analyze the bottlenecks that can form in a production chain. There are tools that can be implemented to shorten the value chain and make it work well. The most important one is value stream mapping.


Value stream mapping is a lean manufacturing technique used to analyze and design the flow of materials and information required to bring a product or service to a consumer. It is a very powerful and simple tool that serves to graphically represent the current and future state of the production system.


A map of the value chain is drawn up showing the days of stock accumulated at each point of the chain needed to produce a specific product. This shows where work has to be done to reduce the chain. It shows the big picture with all the options that are needed to move from one production status to another.


Promoting productivity


There are two techniques that we use to increase the productivity of a specific work cell: 5S and the OEE metric.

5S is a management model of Japanese origin that makes for better organized and permanently orderly workplaces, thus resulting in greater productivity. 5S requires a considerable standardization effort to keep every production station at an optimal working level. The important thing is to establish a work dynamic that keeps the stations in order, with the same elements always in the same places. A work station should end the day as it started, with the machinery ready for the next cycle. 

The OEE metric, on the other hand, is used to quickly identify the reasons why a production work station is not being used at its maximum capacity.

The OEE method analyzes the work speed and time of a work station based on the available hours of said station, its performance, and its use to do rework for quality reasons. These metrics make it possible to focus our efforts on different lines of work in order to optimize their use.


Identification of strategic technologies and alignment with suppliers.


Are we ourselves the best option for carrying out a specific process? When a process doesn't position or differentiate us, it is very likely that we can find a supplier specializing in this process that can reduce our costs and that makes our supply chain more flexible, thus improving our customer service.

Working hand in hand with a supplier will allow us to use consignments, reduce maintenance costs, minimize potential safety problems within our facilities, lower fixed and variable costs, and more.


Relying on technology


Recent years have seen many technologies that were in the development phase become accessible and easy to use. These technologies improve communication and provide real-time information on the consumption of our customers to keep the supply chain informed.

Systems such as digital Lean Kanban and RFID cards, linked to web platforms, are making it possible for us to process information faster and more reliably.

Furthermore, once certain levels of confidence are reached, it's possible to automate purchase orders and billing, cutting down on administrative expenses.

In this regard, the application of lean techniques allows us to use agile company management methods to improve all the processes involved in creating, starting up and growing the company and its staff, avoiding waste and maximizing the use of the available resources. As a result, processes are constantly being improved to yield increasingly efficient results.

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