Despite the popular perception that lean manufacturing is necessarily a complex and highly costly process, this renowned management approach can actually be simplified and customized for entrepreneurs depending on their needs.
"The trick is to pinpoint the specific improvement that you want to make in your business and aim to get results with that first," says BDC Consultant Yves Martin. "You don't have to tackle the entire production line in your manufacturing plant. If you focus on one area, such as reducing inventory, then you can reduce the initial costs of becoming a lean manufacturer. Once you see the savings from your first project, you can then re-invest that money in other lean manufacturing initiatives," he emphasizes.
For novice readers, lean manufacturing means eliminating work processes that add no value to the product or service and simplifying those processes that do. Lean manufacturing targets a number of sources of waste, including overproduction, defects, delivery delays, unnecessary inventory and the movement of goods, people or information.
Think objectives first
Martin stresses that lean manufacturing is not a passing trend or fashion but a real must in business today. "If you're in manufacturing and you want to succeed in a fiercely competitive environment, you have to find a way to keep your costs down and be more productive. There's very little choice about this today," he says.
Many entrepreneurs are reluctant about implementing lean manufacturing because they may fail to see the concrete benefits of investing the time and resources. "You'll definitely see dollar savings down the road through productivity gains. It just makes good business sense to work more productively."
For budget-conscious business owners, Martin suggests that they implement lean manufacturing "one project at a time." The real art here is to first clarify exactly what your specific needs are before you get external help," he says. "You know your business best."
For example, before considering lean manufacturing, an entrepreneur should first get a clear understanding of the company's objectives. "Be as precise as possible," says Martin. A business owner would decide, for instance, if the company wants to diminish stock, improve late deliveries or improve margins. "Apart from getting buy-in from your management team, you have to make sure your objectives are in line with your business needs. It's a key success factor here."
Once you've set your objectives, Yves highly recommends choosing a specialist who has "real chemistry with your organization." "Proper lean manufacturing implementation requires the knowledge of people who can help you do an in-depth analysis and understand the mechanics of plant layout," he says. "Keep in mind that you'll be working with that person very closely. Reputation and experience is important, but you also want to partner with somebody who has a real feel for your business." BDC Consulting has a roster of experienced consultants who offer entrepreneurs excellent lean manufacturing advice.
See the savings or gains upfront
An external consultant will first make a site visit and then have a structured discussion with the CEO in order to determine short-term and long-term needs. "An experienced consultant will also be able to estimate your expected productivity gains upfront. He or she will use a mix of visual assessment, documentation and the initial interviews to make an intelligent guess in the proposal," he says. For example, entrepreneurs should expect lean manufacturing experts to give them specific goals with specific numbers. Examples would be average space gained from a project, average production cycle time gain or average stock reduction.
Know when you'll see results
"One of the ideal aspects of lean manufacturing is that specific objectives can be set and you can also see the results relatively quickly," he adds. Entrepreneurs should generally allow three to six months to implement a lean manufacturing practice and then another three to four months to see the results, whether it's cost savings, production improvement or improving your margins.
"Business owners are often surprised just how fast they can see real concrete improvements with lean manufacturing," he says. "This is particularly true if you start with smaller improvements," he adds. Once you've seen results from one area, you can then invest your savings in a second lean manufacturing initiative down the road. This enables entrepreneurs to be able to exercise more control with lean manufacturing budgets. "Lean manufacturing offers the cascade effect, where you see one benefit leading to another. For instance, if you improve how you use your plant space, you work faster. If you work faster, you improve on delivery, and ultimately sales," he says.
Manufacturing with a fluctuating Canadian dollar
Today the fluctuating Canadian dollar means that entrepreneurs may often see a serious decrease in net income. However, Martin emphasizes that you can take steps to offset these losses. For example, he suggests that entrepreneurs undertake lean manufacturing to increase productivity. He also recommends that owners outsource activities that are not related to the company's core business and encourage suppliers to adopt lean manufacturing practices. As well, entrepreneurs can focus on changing their product mix. For instance, offering customized products that require tight delivery time will help you compete effectively with foreigners, he concludes.
