‘The Way to Wealth’

Last updated on May 13th, 2019 at 02:36 pm

This month, I would like to thank TEC (The Executive Committee) resource specialists Joe Booth and Anand Sharma, as well as information provided by the Wikimedia Foundation, for reminding me that the concept of lean manufacturing is not a fad.

Lean manufacturing remains a critical commitment by those companies who wish to successfully compete on the global playing field.

It’s also interesting to note that the rudimentary concepts of "lean" were actually developed by Benjamin Franklin and published in his famous "The Way to Wealth" treatise.

But in the end, lean manufacturing is really all about the elimination or reduction of seven notorious wastes: over-production, waiting time, transportation costs, processing time/costs, inventory, motion and scrap.

The basic tools to implement lean manufacturing philosophies include process analysis, pull production and mistake-proofing. Translated to the key lean principles, we get:

Perfect quality the first time around. Zero defects accomplished by detecting, scrutinizing and solving problems at the source. Elimination of wastes. Assessing all non value-added activities and doing away with them. Continuous improvement. Ongoing cost reduction, quality and productivity improvement, and widespread sharing of metrics that document trends. Pull processing. Products and services are pulled from the customer end, not pushed from the manufacturing end. Flexibility. Delivering different product mixes quickly without forfeiting manufacturing efficiencies at lower production volumes. Supply chain economics. Building and maintaining long-term supplier relationships with collaborative risk, cost and information-sharing agreements.

In summary, "lean" is almost like a staged military operation. It’s about getting the right things needed for the job, to the right location, on time, in the right quantities and quality levels, while minimizing waste from all sources, and being flexible and open to change. In practice, there are four engineering disciplines that come into play to make "lean" work:

System Engineering

Smaller firms don’t typically use this nomenclature, but they must incorporate it in their lean application. What happens is that customer product requirements are reviewed with marketing and customer reps (engineers) to eliminate or compromise on requirements that break the budget.

It’s here where "make" vs. "buy" (outsourcing) decisions are made. It’s also here where you evaluate the concept of shared resources. For example, the use of shared mechanical components, multi-purpose power sharing, electronic as opposed to mechanical devices, and so on. Finally, system engineering is the best place to explore competitive standardization of parts at the electronic, mechanical and software levels.

Mechanical Engineering

Most companies today use a team approach to mechanical engineering, using the skills of manufacturing and design engineers, cost accountants and customer specialists. The team’s objective is to review the conclusions reached at the systems engineering stage (which might be concurrent, in fact) and apply them to the materials and processes that will be used in production.

Again, in "lean" environments, every effort is made to determine if parts can be combined in a single manufacturing process to reduce fabrication and assembly costs. Fasteners, always a big item, are particularly circumspect for cost reduction applications. Tolerances are analyzed with the goal of achieving 100 percent yields.

The final step involving tooling, run times and "make ready" estimates are calculated against established ROI (return on investment) criteria. If you can’t meet these criteria, then you should consider such things as material substitutions or other methods-engineering techniques. It may even be back to the systems engineering drawing board.

Electrical Engineering

Here, as history has shown, the process begins at the circuit level. However, with "lean," all components are again scrutinized at the quality/reliability level, offset against less expensive part solutions. Reducing the number of adjustments that must be made, installing telltale warning annunciators and streamlining the connections between circuit boards, connectors and mechanical components are just a few of the techniques used here. You can find many attractive low-cost electronic solutions by outsourcing circuit boards to providers able to work with very inexpensive materials, and yet produce a very reliable board.

Software Engineering

Today, the "lean" gains you can make in this discipline can be enormous.

For one thing, software solutions can be simulated before they are implemented. Also, if properly selected, a software solution for one product can be made adaptable to a wide range of products, thus providing even greater efficiencies in the management of the production process. Toyota has gained worldwide admiration by doing precisely this with their automated vehicle assembly capabilities.

If this article appears to be largely descriptive, and more on the educational side than many I have written over the past seven years, quite frankly, it is meant to be. Lean manufacturing is here to stay, and many of our TEC members think so, too.

It’s clearly a major philosophical commitment for a business owner to make. It’s complex. You have to study it. Lean consultants are readily available, but they can be expensive. And if the organization’s culture is apathetic to implementation, consultants could be a waste of the firm’s financial resources.

The first step is to attend a lean seminar with the CEO and his or her key players from each of the above-mentioned disciplines to decide if "lean" is the right way to go. You can also find many books and Web sites on the subject.

Most savvy manufacturing companies are already using some lean concepts such as process re-engineering, just in time, constrain theory, six sigma, continuous improvement, etc. Very few have taken it to the full extent that Toyota has in their productions system. I would hope that some of our readers will do so as a result of this article.

Until next month, stay "lean."

Harry S. Dennis III is the president of The Executive Committee (TEC) in Wisconsin and Michigan. TEC is a professional development group for CEOs, presidents and business owners. He can be reached at (262) 821-3340.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

No posts to display