Standard Business Roadmap

Implementation Manual

Profitability

The SBR lean transformation model starts with the most fundamental goal for any business – to make a profit.  As indicated previously, competitive markets typically set the sales price.  An attempt to increase the price could reduce customer demand.  Therefore, cost reduction is the only real option for  a company in such a position.  The best method to achieve this is through a lean transformation, whose aim is the eradication of wasteful activities.

Business need

In order to maintain a profit, a business must aim to function in an environment of:

·        Total quality.  All people are involved with “building quality into” a product.

·        Zero defects.  Defects are detected, contained, and rectified at their source.

·        Lowest possible manufacturing costs.  Resources are used efficiently at varying levels of demand.

·        Minimum order-to-delivery lead times.  Product flows through the value stream in minimum time.

·        Delivery reliability.  Low and consistent lead times ensure quick response to demand fluctuations.

·        Effective human resource management.  Employees feel empowered to take a proactive role in improving operations in the workplace.

·        Stable employee relations.  A company culture with long term job security fosters continuous improvement efforts.

Most organisations try to satisfy these aspirations through the creation of quality, operating and people systems.  However, these systems are normally created and managed in isolation – often leading to inefficiencies.  For example, an emphasis solely on improving operations by increasing output could have a detrimental effect on quality.

Enabler

The solution to this problem is the introduction of a lean manufacturing methodology that combines the three previously independent systems into a single, coherent system.  Within the single system, the goals of the business systems are aligned leading to optimal benefits.  This is enabled by maximising people contributions with the goal of eliminating waste.

Processes and effects

The lean manufacturing methodology comprises five key processes.  Each of the five key processes aims to identify and then eradicate some of the seven types of waste.  The five processes are:

1.                  People are at the heart of an organisation.  The success and sustainability of the lean transformation often depend on the organisation’s ability to adapt to the people issues involved in managing change. This was achieved at Ford’s (Jaguar) Halewood plant through the introduction of the ‘Gateway’ or ‘Partnership’ process

2.                  Support systems are necessary to provide operational stability.  Examples of support systems include programmes such as workplace organisation and total productive maintenance.

3.                  Flexible manpower systems are a factory wide method for optimising labour productivity across varying levels of customer demand by moving people between flexible manpower lines.

4.                  Autonomation is the principle of stopping a manufacturing process when abnormalities are detected through either intelligent automation or manual means.  Abnormalities are any form of deviation from a standard process.

5.                  Just-in-time (JIT) is often interpreted as conveying the right parts “on time”.  However, JIT is actually manufacturing and conveying the right number of parts at the right time, quantity and in the shortest possible lead time.

Each process breaks into a number of elements.  For example, the support systems process is composed of workplace organisation, total productive maintenance (TPM), and process measurement & review.  Each element has a direct relationship with several types of waste, as illustrated by the circles in the matrix of figure 2.

Competitiveness

As new processes are fully implemented, waste should drastically reduce from the manufacturing environment.  These operational improvements increase the business’s ability to meet the specified business needs, leading to an increase in customer satisfaction.  This helps to strengthen the overall competitiveness of the business.

Sustainability and continuous improvement

When improvements are maintained, the current state will quickly become the normal operating system.  However, this normal operating system cannot be static.  It should be continually challenged and then improved through the lean manufacturing methodology.