SCM Lean Strategy: Adopt the new framework model and re-invent Lean

I have written earlier about the importance of practicing Lean methodology in your organization, multiple times and have tried to highlight that whether it is manufacturing operations or deployment of your ERP system, Lean can be quite useful in all of them. Infact, the article on blending of Lean principles with ERP whether it is 5Ss or 8 wastes, was liked by corporate leaders, business analysts as well as ERP vendors alike. Lean is obviously not new, so you might ask an interesting question: why are we seeing an increasing focus on Lean, which is one of the top two strategies being deployed across manufacturing today? The answer, however, may not be too hard to discern, given what has happened in manufacturing industry across the world over the past decade. Multiple early users & pioneers of Lean, and even some that weren’t using it, experienced an unprecedented expansion in production and corporate profitability over much of the 2000’s. Accompanied with this growth, there was a new focus on maximizing throughput and a slow migration away from the principles of Lean, including demand driven manufacturing, a focus on eliminating waste, and strict controls on inventory explosion.

Such a scenario left many manufacturers vulnerable to the collapse or increased variability in demand for their goods. Even so, the immediate pain that many organizations felt for the most part subsided. Inventory levels have been reduced, waste has been cut out, head count was reduced, and even in the industries like automotive, many companies slowly returned to profitability. Now, however, demand has begun to return, production and inventory levels have begun to increase, and there is a need to not repeat the mistakes of the past.
InfoVerto recommends utilizing a new framework model of utilizing Lean in your organization which is built on 4 principles as below:
  • EXTRACT: It does not whether you are already practicing Lean principles or want to start, there will always be room for improvement and this principle will make sure that you know those improvement areas to start implementing Lean in those. The Extract principle is all about extracting the ideas from your own workforce and bringing their innovation and knowledge about their own niche operations to fore. Not only your employees, but this needs to be extended to whole of the supply chain including your partners, suppliers and customers. Devise ways and means to get their ideas registered in system and implement a system to evaluate their ideas, reward the good & implementable ideas and encourage everyone to contribute
  • MEASURE: Almost all organizations have well defined Key Performance Indicators which tell them how well, the organization is moving towards achieving their goals. Though measuring KPIs is already present in the system of organizations but the emphasis in this principle is to measure them consistently with the same standardized manner every-time so that an apple to apple comparison can be done. This measurement should be done across the enterprise and not locally by independent shops
  • INFORM: Lean is not an activity that can be done by an independent. It is best done in teams and sometimes, the dependence on other teams activities makes it little more complex and here comes the importance of information quickness, consistency and clarity into fore. Whether it is an action that is pending on the other team or partner which can be communicated with the help of a workflow based tool or it is sharing of progress of the project which can be dome through the dash boards, information always play a key role in implementing Lean ideas. Also visibility into operations, orders and KPIs like supplier performance will make sure that requisite benchmarks are updated in time and by the time Lean is over, you are not already behind the benchmarks again
  • IMPROVE & REPLICATE: As I said earlier, room for improvement is always there and it is upto us to find out that room and start working on it. This principles guide you to focus on Lean and Re-Lean activities and makes sure that after implementing Lean once, the workforce does not think that their job is over and they are best in class now. By the time, you are done, somebody else have started jumping one step ahead so keep on looking for improvement areas. Also, success of one Lean idea implementation needs to be replicated to other shops, business entities and at your partners as it is relatively much easier to replicate rather re-inventing wheel once again. Replication will be possible only if you have good knowledge management solutions in place so make sure that the knowledge of implementing the idea is getting captured and is available for re-use
As per me, these are four new principles of implementing Lean in your organization and please note that these compliment the already established principles of Lean and do not provide an alternative approach. Also, you would have noticed that technology has started playing a major role in implementing and keep practicing Lean and this should be seen as one of the key enablers in your Lean endeavors.

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