Operations Management Project:
Lean Manufacturing
Kevin M. Scanlon
Advanced Topics in Operations Management, MGT 465A
Professor Chris Roethlein
Executive Summary
This research paper is intended to analyze the key components of a successful lean manufacturing program and the considerations that an existing firm should make before attempting to implement a lean manufacturing program. The analysis has been conducted through a literature review and supporting qualitative research. A variety of peer-reviewed articles and academic sources have been used to establish a thorough understanding of lean manufacturing principles.
The areas of focus supported by the literature review include the key components of lean: customer value, value stream, flow and pull, empowerment, and perfection; important management considerations: commitment, training and reinforcement; the obstacles and challenges that must be conquered: time and resource constraints, changing habits and remaining dedicated; and the cultural changes that must take place within a firm transitioning to lean.
To explore the application of lean manufacturing, a study of a laser micro-welding systems manufacturer known as Crafford-LaserStar Technologies in
Introduction
The intent of this research paper is to identify and analyze the key components required to implement a successful lean manufacturing program in an existing firm. The analysis will be conducted through a literature review using peer-reviewed articles and academic references, a case study focusing on Crafford-LaserStar Technologies’ implementation of lean and qualitative research based on an interview with the Senior Vice President of Engineering and Operations at Crafford-LaserStar Technologies. The literature review will outline the major concepts that make up a lean manufacturing program, identify the most heavily emphasized concepts and help to create an academic model of the ideal lean manufacturing program. The case study of Crafford-LaserStar Technologies will explore how a local manufacturing firm was able to implement a lean manufacturing program. Finally, the interview with the Senior Vice President of Engineering and Operations at Crafford-LaserStar Technologies will help tie together the academic concepts of lean manufacturing programs with the experience and first hand accounts of a lean manufacturing insider.
Crafford-LaserStar Technologies is a
The basic values of lean manufacturing include “high quality, low cost, short cycle times, flexibility, the continuous pursuit to eliminate waste, and customer-defined value” (Lawson 2007). Lean manufacturing has been growing in popularity due to increased global competition and the constant effort by manufacturing firms to improve their bottom line. Although more firms than ever are now incorporating lean philosophies into their production processes, the concept has existed for some time. Firms decide to go lean for a variety of reasons, but it is generally agreed that “The right reason for going on the lean journey is to achieve strategic results for the organization” (Nash 2007).
To determine the essential components required to implement a lean manufacturing program in an existing firm, the following research questions will be considered throughout this analysis:
· What are the essential components of a lean manufacturing program?
· What are they most important things to consider when implementing a lean manufacturing program at an existing firm?
· What are the biggest obstacles and challenges that the firm must overcome?
· How does a firm’s culture have to change to align with the lean ideology?
Literature Review
To establish a thorough understanding of lean manufacturing principles and benefits, a literature review was conducted. According to RIMES, a lean enterprise strives to “produce more with existing resources by eliminating non-value added activities, establishing a systematic approach to eliminating wastes and creating flow, and developing a long-term plan to streamline operations for success” (RIMES 2007). This can be achieved through strategic planning and process improvements which “reduce costs, cycle time, inventory, work-in-process, lead times; increases capacity, sales, productivity and profits; and improves quality, safety, workforce participation, and team building” (RIMES 2007). Based on the literary review, the key principles of a successful lean manufacturing program that must be addressed include: customer defined value, pull and flow systems, value stream analysis, employee empowerment, and continuous improvements. It is also essential for a firm’s executives and managers to create a strategic plan that they will adhere to throughout their lean journey. Commitment, training and reinforcement of values are ongoing cultural matters that are necessary to maintain a lean manufacturing program.
Customer defined value refers to the concept of continually redefining value from the viewpoint of the customer. “The product or service provides value when it meets the quality, costs, and time needs of the customer” (Kennedy et. all 2007). Paying close attention to these details results in higher levels of overall customer satisfaction. Satisfied customers generate repeat business and will tend to bring more referral business to a firm.
Pull and flow systems refer to the manner in which materials or components flow into, out of, and within a firm’s production line. In a lean enterprise the goal is to maximize flow of the value stream and reduce production time. Methods used to improve pull and flow in a manufacturing firm include the use of kanbans and just-in-time delivery schedules. “A kanban is a notification system… used to trigger the movement, production, or supply of a unit in a factory” (Start-it 2007). This technique can help “transform from a traditional "push" company-based on forecasts and multiple scheduling-into a customer demand based "pull" system” (Alukal 2007). When kanbans are utilized, materials and goods are pulled through the system. “The kanban is only just one aspect of a lean manufacturing operation, but experts view it as a good way to eliminate waste or keep inventories low” (Start-it 2007). Kanbans are highly effective when used in combination with just-in-time delivery systems. Just-in-time delivery means just the right amount of materials that are needed are delivered to the location where they are needed right when they are needed. This allows the manufacturer to “reduce the quantity or batch size to decrease the wastes of excess inventory and overproduction” (Alukal 2007).
The value stream is “the sequence of processes through which a product is transformed from raw materials to a finished product deliverable to the customer” (Kennedy et all 2007). Before a firm can become lean, they must map out their current value stream. It must be understood “where the operation stands today compared with the quality requirements or needs of the customer” (Gordon 2007). Once the current value stream has been determine, areas requiring improvement can then be identified. The purpose of value stream mapping is to identify and eliminate all non-value adding steps in the production process, and to improve the performance of the remaining value-adding steps.
Employee empowerment is an essential principle of lean manufacturing. In a lean manufacturing environment, as George Alukal points out, workers are “encouraged to be thinkers and problem solvers instead of mere rote doers. This emphasis on creativity and idea generation eventually leads the company to drastically reduce various wastes and total lead times” (Alukal 2007). Because the workers are actively involved in the value-adding process, they are able to identify problems that management may not be aware of. When empowered and taught to share the firm’s vision, employees may then formulate creative solutions to these problems. As Alukal states, “The shared vision and purpose of all employees helps in promoting teamwork rather than creating competitiveness” (Alukal 2007).
The fifth and final essential principle of lean is continuous improvement. For a lean manufacturing firm to remain competitive and increase market share, it must be focused on “lasting cost reductions without compromising quality, features, availability or customer satisfaction” (Alukal 2007). It must be understood that there will always be room for improvement. The firm’s management team and employees must have a “passion for continuous innovation, a sense that anything and everything can be improved. (Alukal 2007) In the end, the overall strategy of a lean firm must be to “seek perfection defined as 100% quality flowing in an unbroken flow at the pull of the customer” (Kennedy et. all 2007).
A key consideration that was also mentioned throughout the literature review pertained to managerial commitment. An article entitled “Strategic Management of Lean” effectively outlined the important managerial aspects of implementing a lean program. In the article, the authors Mark Nash and Sheila Poling state that “many a lean transformation has failed because management failed to establish a strategic plan for implementing it” (Nash 2007). The authors propose five basic steps that a company’s management should consider while implementing a lean program. These steps include getting the commitment of the organization’s executive management team, aligning the initiative with the strategic goals and objectives of the organization, training the workforce, developing lean managers and facilitators, and encouraging managers to stand back and support lean project teams rather than dictate what they do. All five of these steps require the full commitment and dedication of managers and executives. Without a strategic plan and managers with the desire to implement the plan, a lean transition is likely to fail.
Finally and most importantly, a significant cultural change must take place in a firm transitioning to lean. The transition requires such a dramatic reorganization of equipment, processes and philosophies that change must occur first within the minds of the firm’s individuals. As Michel Roberto asserts in his article “Learn from lean’s best”, “It's preparing the organization for lean that is extremely difficult. Many of the others are tactics, and how you do those are going to be specific to your operation” (Roberto 2005) Overall, he concludes that “the success of lean ultimately depends on an integration of tactics and techniques with a culture that advocates lean both within and outside the four walls (Roberto 2005). A firm must be able to embrace change and the notion of lean thinking in order experience true success.
The information collected from the literature review will be used to compare the academic principles of lean implementation with the real-world lean implementation at Crafford–LaserStar Technologies and the first-hand accounts of the transitional process made by David P. Braman.
Qualitative Research
An interview with David P. Braman, Senior Vice President of Engineering and Operations at Crafford – LaserStar Technologies was necessary to create a connection between the lean manufacturing ideologies discussed in the research literature and the realities of implementing such a program at an existing firm. The perspective and opinions of an insider that was present during the planning and implementation of a lean program provides a beneficial addition to the overall analysis. The issues covered directly relate to Crafford – LaserStar Technologies’ transition to lean manufacturing and include: the components of lean manufacturing that delivered the best results, the key challenges and obstacles that had to be overcome, important considerations, cultural changes, and the measurement of success. Each issue will reveal how the academic philosophies of lean manufacturing relate to the implementation process in the real world.
David P. Braman is Crafford – LaserStar Technologies’ current Senior Vice President of Engineering and Operations. When he joined the firm, processes were growing inefficient but the firm was seeking continuous growth. Adding layers of people did not seem like a smart solution because it meant increasing overhead and further decreasing efficiency. Management realized that the firm needed to change its processes and procedures, but most of all, its culture. In 2005, the Executive Vice President, James Gervais, and David Braman decided to bring in an outside consultant to help facilitate the transitional process (Braman 2007). A representative from RIMES was selected due to the organizations history of professionalism and results-oriented approach.
Crafford – LaserStar Technologies now describes themselves as a lean, laser manufacturing company. Their goal is to “maintain leadership in the market segments in which they compete. The resources and focus of the Company are concentrated in creating and maintaining excellence in its lasers and accompanying educational programs and research activities” (Crafford-LaserStar Technologies 2007). Their aim is to “enhance the quality, performance and innovation of products, programs and services on a continuing basis” Crafford-LaserStar Technologies 2007).
The first question I posed to Mr. Braman was “What elements of lean have yielded the most tangible improvements?” His response was “Pull systems, value stream mapping, just-in-time inventory concepts, point-of-use storage, continuous improvement process, and the 5s’s… all of them.” All of the elements, in some way, have contributed tangible results for Crafford – LaserStar Technologies.
For the next question, I asked what the biggest obstacles and challenges the firm had to overcome when implementing their lean program. Mr. Braman’s response was, “As a small firm, finding the time and resources to implement lean was a challenge. There were some employees that were resistant to change or felt lean could not work for our company.” He also added that “continuing to reinforce lean concepts and methods until they become habit and part of the culture” was a challenge.
Next, to get an experienced insider’s opinion, I posed the question “What are the most important things to consider when implementing a lean manufacturing program in an existing firm?” Mr. Braman’s answer was “Training and reinforcement of ideas must occur, accepting that mistakes will happen and learning from them, and that lean is not just for manufacturing, and it applies to office functions as well. The lean concept can be used Enterprise-wide.”
Cultural change is a crucial part of implementing a lean program, so next I asked how the culture of Crafford – LaserStar Technologies has changed to align with the lean ideology. Mr. Braman’s response was “increased teamwork, embracing change more, understanding and implementation of pull systems and not ordering and building for stock, and understanding that lean is a journey and way of doing business not a one time fix.”
To complete the interview, I asked how Crafford–LaserStar Technologies measures the success of their lean program. Mr. Braman’s response was “inventory reduction, increased cash flow, reduction in delivery lead times, reduction in front office paperwork, and reduction in manufacturing paperwork.”
The interview yielded some insightful information from an individual with a first hand account of the implementation process of a lean manufacturing program. The interview responses reinforced the topics covered in the literature research section, especially the importance of cultural change, education, commitment, and continuous improvement. The overall result of this interview will help to strengthen the importance of certain principles of lean manufacturing when drawing overall conclusions from the analysis.
Findings
Based on the research, the implementation of a successful lean manufacturing program goes beyond understanding and implementing the tactical changes. Strategic planning, a dedicated management team, and a company cultural that embraces change are also essential. Referring back to the original research questions, detailed findings can be determined.
The essential components of a lean manufacturing program include: customer defined value, pull and flow systems, value stream analysis, employee empowerment, continuous improvements, strategic planning, commitment, company-wide training and the ongoing reinforcement of cultural values.
The most important things to consider when implementing a lean manufacturing program at an existing firm are that the training of management and employees is essential, everyone in the firm must be being open and willing to change, mistakes should result in learning rather than discouragement, understanding that there is always room for improvement, and that lean philosophies can be applied firm-wide.
Some of the biggest obstacles and challenge that a firm must overcome include distractions from the strategic plan, complacency, stubborn employees that do not embrace change and the continual need to reinforce the new philosophies until they become habit.
A firm’s culture must change to align with lean ideologies by creating a firm-wide vision that is shared by all employees and managers. The empowerment of employees to make decisions and solve problems is essential. Management must learn to support employee teams rather than direct them. Overall, it must be understood by everyone that lean is not a one-time solution, but rather an ongoing way of life.
Limitations
Various factors including time constraints lead to my inability to exhaust all available research avenues for my analysis. Some elements and principles of lean manufacturing may have been omitted due to constraints on the length of this research paper. However, most major principles were mentioned and discussed to some degree. If future research were to be conducted on this topic, I would recommend further analysis of each of the principles mentioned, exploration of principles that were not mentioned, interviews and case studies on other firms including service-based firms, and more in-depth interviews with lean-experienced professionals.
Conclusions and Recommendations
Going lean is a journey. A firm planning to implement a lean program must understand that it requires planning, leadership, commitment, time, and good people. Successful implementation requires executives and managers to consider both tactical and strategic components.
The tactical components of lean manufacturing vary by firm, but the strategic components are quite similar. Strategic planning is the most important part of the transitional process. A solid strategic plan that management remains dedicated to can be the most effective indicator used to determine the likelihood of a firms ability to successfully execute its lean manufacturing program.
A firm must decide to go lean for the correct reason, as well. In the end, the right reason for going lean is always to achieve strategic results for the firm. The firm’s strategic results must, in some way, also align with the needs of the customer. All lean manufacturing programs are, after all, founded upon the principle of maximizing value as defined by the customer.
References
Alukal, George (2007). Lean Kaizen in the 21st Century. Quality Progress, 40(8), 69-70. Retrieved December 7, 2007, from ABI/INFORM Global database. (Document ID: 1334726351).
Crafford – LaserStar Technologies. Company Info: Executive Message.
Gordon, Dale K. (2007). Using Lean to Meet Quality Objectives. Quality Progress, 40(4), 55-56. Retrieved December 7, 2007, from ABI/INFORM Global database. (Document ID: 1271316431).
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