What is lean manufacturing?
The aim of lean manufacturing is to remove inefficiencies across all operational activities. Manufacturers and distributors can utilize various techniques and tools to identify where to add value and reduce waste. These concepts can be applied throughout the supply chain but are most often thought of in terms of how waste impacts operations.
Lean manufacturing can be arguably traced back to the building of the 15th-century Venetian ship Armada and some of the philosophical tenets around work put forth by Benjamin Franklin two centuries later. However, it is usually associated with the Total Quality Management movement of the 1980s, which borrowed heavily from the post-WWII production methods of the Toyota Company. The company refined the lean methodology and follows it to this day. Since then, lean manufacturing (aka lean production) has splintered into dozens of techniques and concepts, including Lean Six Sigma and Agile.
It can be challenging for distributors and other businesses along the supply chain to know where to start. But at Adherex, we have found it helpful to remember that the goal of lean production is not just to eliminate waste but to reliably and sustainably deliver value to customers. This post explores some of the challenges of lean manufacturing, the principles that help guide lean efforts, and some of the changes we are making at Adherex to continue to add value to our customers.
What are the benefits of lean manufacturing techniques for distributors?
Manufacturers and distributors of all sizes can gain the advantages of lean manufacturing:.
- Cost efficiency – Eliminating waste reduces costs and helps manufacturers control pricing.
- Improved productivity – Waste also includes inefficient processes and workflows. By reducing friction in processes, employees are more productive and efficient.
- Reduced lead times – More efficiency and open communications mean distributors can serve customers faster.
- Engaged employees – The lean methodology includes granting agency to employees and frontline workers to solve problems while working closely with their managers.
- Quality control – “Poka-yoke” or error-proofing is the idea that common errors can be eliminated from workflows, creating better-quality products for the customer and minimizing returns or recalls.
- Minimal inventory – “Pull manufacturing” is a streamlined process that quickly handles a customer order after it is placed, rather than keeping a large warehouse full of inventory.
How does lean manufacturing benefit customers?
Customers ordering from lean manufacturers might not notice the difference. In reality, most customers only notice when there is an issue or delay with their order. Customers ordering from lean businesses receive higher quality products faster than non-lean organizations. Additionally, customer satisfaction is higher because lean organizations prioritize customer experience and communication. They bend over backward to ensure the customer is happy with their order, identify the root causes of any issues, and eliminate them from the workflow to end that issue in the future.
As a bonus, lean companies are typically more sustainable and environmentally friendly, which is a growing concern among consumers.
The challenges and drawbacks of lean manufacturing
Despite the decades (or centuries, depending on who you ask) that lean manufacturing has had to mature, it is still far from perfect.
Companies implementing lean manufacturing techniques often face the following challenges:
- Employee or managerial resistance
- Inadequate resources dedicated to the changes
- Too many changes made at once
- Lack of measuring or metrics
- Inadequate training
- Inability to shift focus to value from the customer perspective
Additionally, skeptics and critics of lean methodology have noted the following drawbacks:
- Companies may over-prioritize productivity and risk the health and safety of their employees.
- Overly focusing on the present state of the company can lead to short-sighted decisions that sacrifice future investments and growth.
- Since lean manufacturing techniques rely on changes to company culture, it can be somewhat tricky to standardize adoption methods and as mentioned, identify appropriate KPIs to measure their effectiveness.
Implementing lean manufacturing techniques
Lean adoption generally follows five principles:
- Defining value – Value comes from the customer’s point of view. As an organization, evaluate what your customers value and how much they will pay for your products.
- Mapping value/The product cycle – Next, consider a product’s lifespan, from sourcing to final disposal (and/or recycling). Waste must be ferreted out at each phase of the product cycle to add value and identify friction points in the supply chain.
- Flow – Once waste and friction are identified, the company’s job is to reduce both as much as possible. Imagine a dam power plant driven by a river. Any obstacles that slow the stream of water reduce the amount of power produced. By removing the logjams in your process, you generate greater benefits.
- Pull manufacturing – Pull manufacturing responds to customer demand. An example is our stocking program, which keeps our most in-demand products readily available for our customers, minimizing lead times. Pull manufacturing requires open lines of communication.
- Continuous improvement – “Kaizen” roughly translates to “striving for perfection”. To be effective, lean manufacturing must continually monitor processes, identify sources of waste, and work to solve problems.
What is Adherex doing that aligns with lean manufacturing principles?
Adherex does not strictly follow lean manufacturing principles. However, we strongly identify with the end goals of reducing waste and passing value to our customers. So, we have begun implementing some lean manufacturing techniques in the spirit of Kaizen (continuous improvement). They include:
- ERP integration – We’re streamlining multiple enterprise resource planning (ERP) systems to simplify the ordering process internally and speed up our fulfillment times.
- The stocking program – Based on customer feedback, we’ve reduced lead times for our most popular products and will soon roll out a second program phase that includes even more products. We’re implementing a sales, inventory, and operations planning (SIOP) system to help scale this effort.
Learn more: Adherex Group Expands Manufacturing Capacity with Added Capabilities and Technologies
Leaning into Lean
Lean manufacturing is a philosophy and a set of tools. Understanding the reasoning behind the tools is critical to reaping the desired outcomes. At Adherex, we’re slowly implementing lean tools and processes and investing in our operations to serve you better.
One concept of lean methodology is sharing knowledge. In that spirit, we’re happy to share our findings and will post a follow-up later this year to share the results of our lean production efforts.
In the meantime, contact us to find out how Adherex can support your lean efforts to minimize waste, prioritize the customer, and boost the bottom line.
