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A stronger Canadian dollar and intensifying competition from abroad have brought many Canadian companies to the point where they must change to survive.
The solution a growing number of businesses are embracing is lean manufacturing, a set of principals and methods designed to squeeze waste from operations while boosting quality and customer satisfaction.
While becoming leaner can produce big productivity gains, each business is different and requires a tailored approach to improving performance, said Bruce McConnell, Vice President, Operations Support - Consulting Group, at the Business Development Bank of Canada (BDC).
"It's never a 'one size fits all' approach," McConnell said. "BDC uses its experience to make sure that it selects and recommends the proper tool that fits the circumstances of that one business."
Lean manufacturing includes Japanese management techniques such as one-piece flow, just-in-time production and Kaizen continuous improvement teams. Other popular methods including statistical process control, supply-chain management and the theory of constraints.
Implementing lean methods often involves big changes and requires a strong commitment from both management and line workers, experts say. But the pay-off can be dramatic in cost reduction, increased working capital and productivity gains.
Companies that successfully implement lean manufacturing can experience gains of 50 per cent or more in such key areas as inventory, floor-space and set-up time reduction. Productivity gains can reach 35 per cent and more.
Bellivo Transformation Inc., a Québec veal-processing company, was able to double its production without adding employees by reorganizing its plant using lean principals and techniques.
"Our prices were too high for the market, and thanks to this we were able to become a lot more competitive," said Stéphane Lemire, Director General of Bellivo, which overhauled its plant in St-Angèle-de-Prémont, near Trois-Rivières, with the help of BDC Consulting Group. "With the open markets we're facing, the competitiveness of Canadian companies will be constantly challenged."
But many companies embark on a lean program only to end up reverting back to old ways because of a lack of management commitment or a failure to prepare a cohesive strategy, said Barb Jacklin, Canadian Director of the non-profit Association for Manufacturing Excellence.
"In order to really make it successful, you have to have a plan. And you have to stick with the plan," Jacklin said.
McConnell said BDC leads its consulting clients through a four-stage process to implement change.
The process starts with an awareness phase in which a consultant becomes familiar with a company's operations and explains lean manufacturing and its benefits to executives. BDC has recently developed a new tool to assist in this phase called a Review of Operational Processes.
Next comes the diagnostic phase when a detailed game plan is created, outlining proposed interventions as well as expected costs and financial benefits for the company. Then comes the intervention phase when the plan is put into action.
Finally, there's a follow-up phase to ensure the company stays on track and endeavours to continuously improve its operations.
The Canadian Manufacturers and Exporters organization is encouraging manufacturers to embrace lean techniques. CME has been setting up regional consortia of companies across the country to share lean manufacturing information and best practices.
"A lot of organizations are fighting for their life and a little bit of bottom line. Lean is a way to do it," said Brian McCready, CME's Vice President for Alberta & Saskatchewan.
For more information, call 1 877 BDC-BANX (232-2269).
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