Profitable Growth and the Basics of Lean Manufacturing

In their efforts to move closer to the customers, many manufacturers have focused on what a company should lose the primary success factor - profitable growth. In the modern manufacturing industry, today's environment, it takes more than quick fixes, outsourcing and downsizing for companies consistently achieve their goals of growth and profit. While these options may cause temporary financial relief, they are not the way to long-term growth and profitability. For growing companies, andconsistently exceed expectations on the bottom line, they have to get slim. And you must reject the fundamentals of lean manufacturing champion.

In the last 30 years we were led to believe that computerized systems, the solution to all of our growth and profit targets would provide challenges. Material requirements planning (MRP) and Enterprise Resource Planning (ERP) system gurus assured us that if we were their software programs, the bottom line itself implemented provide. Well, it is nothappened! Like most perceived panaceas, each of these programs received a lot of hype, produced a few successes to help but in general, contributed little to identify companies and their full growth and profit potential.

For a measure of the shortcomings, one needs only some time in an MRP planned production spending - especially in recent weeks, the final financial quarter. In a typical enterprise will be, you will find that the transformation of the quarterlyfinancial perspective, the reality still requires overtime, internal / external to accelerate, last minute "on-the-run" product changes and even a little "smoke and mirrors". Results are scrap, rework, and ensure that the cost of delivering a negative on profitability and the quality and delivery problems is less than acceptable customer satisfaction. The companies have many thousands of dollars in pursuing MRP and ERP only stayed to watch their growth and profits decline due to uncontrolled operating costs thatproduced non-competitive prices.

So, after introducing MRP / ERP computer systems and more, why is it that most companies are still fighting to maintain profitable growth and are not where close to achieving its growth and earnings potential? The first reason is simple - the results of any computer system will be achieved only as good as the people at the controls and the integrity of the data they provide. The second is complex - most manufacturing managers facing major day to dayProblems and constraints are a totally reactive management style. Therefore, their time with "band-aid" and / or paths can be found, to include system and process analysis - they leave little or no time working analyze claims and to eliminate the root causes of ineffective systems and processes. How can you shoot like a classic "cart before the horse" syndrome? What is needed first a company-wide, a deep understanding of the fundamental of lean manufacturing and then a totalCommitment to the consistent and persistent implementation of lean manufacturing principles.

As Vince Lombardi, the successes achieved by his team to concentrate on the mastery of football basics - we need our production teams have focused on the mastery of the lean manufacturing principles. These foundations require proactive planning and execution, the tough requirements of leadership beyond just satisfying "day-to-day responsibilities. Some managers can not imagine the benefits of controlManufacturing bases, while others simply can not find the time. How to practice blocking and fighting in football, it's not exciting, and run like most football heroes, managers prefer to use the ball. But without the tenacious and flawless execution of lean manufacturing basics, companies will seldom achieve their full potential for growth and profit. Delineated below, the main principles of Lean Manufacturing:

Information Integrity: It is not uncommon for front office managementdisappointed with computerized systems results when time schedules and promised repayments are not met. Truism: acceptable systems results can not be achieved if the systems are driven by inaccurate data and early, uncontrolled documentation.

Performance Management: Measurement systems can motivate or de-motivational. The different objectives of the 80s is a good example of de-motivational measurement - it tested one individual or one group against another, and duringSatisfaction of individual egos, if they have little to overall business strategy of growth and profit. Today, the balanced scorecard is the choice of manufacturing process winners.

Sequential Production: It takes more than systems sophistication for manufacturing companies, control of the factory operations to win. To the on-time deliveries to healthy profit margins, companies need to replace obsolete MRPII / ERP shop scheduling method with the simplicity of sequential production.Manufacturing leaders who order their MRP shop start "and expedite" methodology with continuous production lines, which are supported by real-time imagery supply chains replaced ... sequential production. The assertion that sequential production only works in high production, widget-manufacturing environments is a myth.

Point-of-Use-Logistics: Material handling and storage are two of the high cost of production, non-value-added supply chainManagement activities. The removal of the warehouse, as it is known today, was a strategic objective of all manufacturers. The shift of production parts and components from the warehouse, but their production at the time of use is really a return to fundamentals and significant costs associated reducer.

Cycle Time Management: Long cycle times are symptoms of poor performance and high production of non-value added costs. Manufacturers need to focus on the continuous reduction of all cycle times.Together, success requires a specific management style that focuses on "cause" proactive problem solving, but as a "firefighting."

Production Linearity: Companies will never yield their full potential if they are planning more than 25% of their monthly shipment, finished in the last week of a month or more than 33% of their quarterly shipment plan in the last month of the quarter. How do your production departments produce linear The captain of the company's plan? AsCompanies are struggling to remain competitive, one of the strategies by which gains in speed, quality and costs can be achieved, is to follow the form teams of employees and achieve linear production.

Resource Planning: One of the major challenges in the industry today is the timely right sizing of operations. The profit margins are overlooked by non-timely downsizing and market policies and windows are losing customers is not undermined by upsizing the direct labor in a timely manner. TheseActions demand timely, tough decisions, accurate, timely and reliable information is needed for this resource.

Customer Satisfaction: Customer satisfaction is in the eyes of the beholder - the customer. Perceptions are what we have to tackle when it comes to improving customer satisfaction. It does not do us good to have the best products and services if the customer received the perception of our "quality and service is unsatisfactory. We need to plan and implement proactive projectsthat the collapse of communication to create barriers to invalid customer perceptions.

While many companies have one or more of these gurus production as an important basis for the successful pursuit of the classified business excellence ", was the fundamental importance of lean manufacturing principles in the dissemination of losing keywords, and the mania of systems sophistication. We say it is time for companies to conduct an influence on the development of sophisticated systems to ensure that set themselves in debt,Every day the chaos. In its place, they should immediately an action learning program designed to recruit a company-wide understanding and acceptance of the importance of the basics of lean manufacturing. Once buy-in and commitment have been achieved, aggressive planning and tenacious implementation follow. In short, we put the "horse before the cart" - such a program will build a solid foundation for redefining and revitalizing a company's pursuit of profitable growth.

The Reflective Supply Chain in Manufacturing

The well-known fate of the manufacturing companies in the United Kingdom has led to a growing demand for reduction of internal costs, and now more than ever, the focus has been on the cost of the supply chain. The nature of supply chains and their structure is often overlooked, and many of the internal costs by examining the entire supply chain strategy will be eliminated. By developing a supply chain that meets the needsinternal customers, many of the previously identified deficiencies can be remedied, and improves subsequent performance.

There are three categories of products that are used in order to define the supply chain strategy for a typical manufacturing company. First there are the core products that are produced on an ongoing basis and form the bulk of production in a given period. Secondly, there are products that are manufactured to meet regularlycustomer requirements or to satisfy a recurring demand, and finally there are those products that are manufactured to specific customer requirements on an irregular basis. The three categories are sometimes referred to as Runners, Repeaters and Strangers.

There is an unquestionable link between the classification of these product types and the supply chain organisation that is required to support them. Each classification requires a different supplier strategy and stock Policy in order to maximize inventory turns. For example, systems such as Kanban replenishment may be very used for rotor components in the group because of the prices of consumption, but Strangers asked the group to introduce higher levels of inventory in the long lead time parts can. The selection of appropriate supply chain strategies will therefore lead to the fact that two different systems, one for the runners and one for foreigners. The Runners Supply> Chain are usually highly efficient, with a focus on the component cost, quality and delivery capability of suppliers. The Strangers supply chain, however, must respond to the irregular sales orders, and the focus is more on supplier lead time and the ability to predict these requirements difficult to meet. The repeaters are probably the two systems and require case-by-case decisions to take over, followed by the for each component. Therefore, the repeaterare usually for strategic storage requires periodic review, but is a function defined for production.

The classification of the products identified in this way, the needs of production and in turn the type of supply chain to identify support required to achieve the desired output volume. More importantly, and often over-looked in relation to these strategies rather simple analysis based on customer needs support.

Having definedthe groups of products and styles of the supply chain required to support the diverse needs of these product groups, the supply chain itself must be developed in accordance with these needs. The resulting supplier development program can therefore be adapted to support the various supply-chain requirements and needs, so the production and retail in the most appropriate way to adapt again.

There are many tools and techniques availableDeveloping improved supply chain performance, but few have been taken to help a supplier development strategy.

A technique called "Supplier Positioning" maps customers' perception of risk and the importance of their suppliers and service providers especially the customer's perception regarding the importance and the ease of the economy. This can provide useful information by identifying suppliers are not capable of supply chain supportImprovements. For example, many companies still producing relatively small quantities of parts from large retailers, whose part of the cost, quality and delivery beyond the control of the customer through the exercise of the vendor that the customer purchase "of little value". These suppliers have, therefore, a disproportionate ability to adversely affect the possibilities for the production of its smaller customers.

In improving the supply chain and the creation of developmentStrategy "can be used supplier positioning" to ensure that the integrity of security of supply because an understanding of how the various suppliers to the customers and the degree of interaction required to be maintained in order to maintain good relations. This technique has an additional advantage in that it identifies potential weaknesses or gaps in the supply chain relationships, which can be solved once emphasized.

The application of the product classification andthen adjust the development of the supply chain for the production requirements can undoubtedly help to improve the strategic direction for the supply chain. The resulting measures will not only develop a more streamlined supply chain, but greater control over inventory and establish a better understanding of the needs of internal customers.

It is a connection between the fused together the three main influences in every manufacturing company.Determination of demand, production capacity and the material must satisfy to this, with clearly defined parameters and processes combine to produce the required performance. Weaknesses in a certain area will lead to a domino effect means that errors will be delivered on time in full and, ultimately, dissatisfied customers.

The share of demand defines the requirements for performance and material needs to be but never isolated or ignored, as is often the case. Changes in demand orCustomer orders can only efficiently be met by a balanced circuit.

Each function in this model is dependent on the others and must therefore reach only within the limits of a common goal. The key therefore to reduce the inefficiencies in the supply chain lies in understanding and managing these relationships, which is the starting point for the realization of a reflective supply chain.