19 Lean Manufacturing Results You Can Expect by Implementing it Properly
There are a number of lean manufacturing results that you can expect from a bit of elbow grease and persistence. This guide will show you some of the benefits and real life results you could expect from a well implemented lean programme.
By reducing waste in your end-to-end processes (value stream), you can drastically reduce the lead time from enquiry to delivery of order.
These lean manufacturing results can be huge.
A door manufacturer i worked with during 2017 and 2018 achieved a lead time of 3 weeks. Before the lean programme, they were quoting 2.5 months lead time. In fact, they recently won a £200,000 order with one customer purely because they offer custom made doors faster than any other competitor in the market.
Reduction in Cycle Times
As opposed to making improvements at the value stream level, you can also improve individual processes. When you do this, you can shorten the time it takes for that process to be completed.
This in turn allows you to increase your capacity to process more with no extra resource needed.
A shim manufacturer in the UK managed to reduce the time of their assembly line processes by stripping out the excess wasted steps and making it flow better. In turn, they eliminated the need for 2 temporary workers in the operation. This enabled them to produce more output as well as reducing headcount. The real gains were £8,000 per month after tax.
By focusing on building quality at source, processes will perform better. This applies in production and also office processes.
In a lean process, information is passed on right-first-time and to exactly the requirements from the next step in the process. This means there are considerably less returns, rework, or questioning at each stage.
In one improvement project with a modular construction build company, we highlighted gains in quality of over 3000%. This meant the business could reduce their lead time and cost because they weren’t messing around with silly day-to-day errors all the time. It also allowed them to process more work, too.
Reduction in Stock
Lean involves reducing the resource needed for operations. Stock is often a large resource and it’s easy to store too much of one type and not enough of others. It can cause too much time and space taken up, yet you can still struggle to keep the right stock in the business.
A successful lean programme can realise big gains in stock holding, just be implementing an effective stock control system…even if you have long lead time products.
A small fastener distributor managed to save over £80,000 just by tidying up their top 10% of products that they sell. By tidying up, i mean implementing better controls and a robust ‘lean’ stock control system.
If you hold less stock and process smaller orders – both of which are lean requirements, you’ll need less floor space to run your operations.
The fact is, you can only process one product a time, so why take up vital space by overloading production areas with large batches of work that won’t get completed for days?
By streamlining processes, and processing to one-piece-flow techniques, you won’t need as much resource, including space.
A protection film manufacturer managed to grow their business by 60%, whilst staying in the same premises. This was achieved by working differently and using lean techniques.
Before the project, they thought they’d have to buy a new factory and expand. They were over the moon when they got more out of what they already had.
Lean involves leading by example and empowering employees. And in order for a continuous improvement culture to become a part of the entire business, employees must take part in making improvements. In fact, they must lead improvements at their level.
When employees feel that their voices are heard, and they’re seeing improvements happen, the workplace becomes a more positive one.
By taking ownership of their areas and making small improvements every day, the business will constantly improve, bit by bit and won’t settle on what it currently does.
Under a lean programme, all employees are trained in lean and continuous improvement techniques. They can spot waste and know how to make daily improvements. This means that they’re more than just operators or frontline workers; they use lean tools to make continuous improvement happen.
Equally, cross team training is vital, too. Lean focuses on systemising the business, where there’s no heavy reliance on a few key individuals in a process. The systems and processes are redesigned to enable high repeatability and consistency. Cross training is vital to ensure that there’s always more than one person who’s competently trained for every process.
A Culture that Embraces Change
A lean culture allows the business to react faster to change. Humans are generally resistant to change, and it takes time and effort to typically transition from an old way to a new and improved way of working.
There are many reasons for this, including fear of the unknown and fear of losing one’s job.
By embracing continuous improvement, and making it the standard that change for the better always happens, it allows employees to get used to this approach and embrace new ideas.
Quite literally, lean allows people to get used to changing for the better and encourages employees to help design and lead the change efforts.
Less Machine Breakdowns
A common view is that machines generally get old and eventually they’re not fit for purpose. While this is true, machine life-spans can be drastically increased by good care and maintenance.
Most machines are not cared for as much as they should be. This means that they get dirty and clogged up with debris and left to degrade. When leaks happen, it’s hard to see them amongst the grime that’s already there.
In a lean organisation, equipment is treated like the vital asset as it is. This means that operators provide daily maintenance and ensure the equipment is running to the highest order.
By looking after them, fixes can be made before breakdowns happen, and preventative maintenance ensures the machines do not lose time through breakdowns.
By implementing a preventative maintenance programme a process manufacturing business managed to increase up time of their machines by 25%. This meant they could process more work in the same period.
Managing Long Lead-time Suppliers
There’s often a misconception that because your stock may be on a long lead time (2 months, plus), then you have to make do and bear the brunt of purchasing too much at any one time.
So, too, companies buy excessive stock because they can get a reduction in price with the higher amount bought.
In lean, there are a number of tools you can use to help break this mindset, so you can purchase little and often.
The key is to improve the relationship with your suppliers and then use some best practice techniques to reduce stock, whilst being able to provide products to your customers without running out.
In a company i worked with in 2018, the business had far too much stock. Orders were placed on an adhoc basis, with little structure and process. This meant that huge orders were processed and received, and yet there were times when the business would still run out of stock.
We worked with their main Indian supplier and created a 2 weekly Kanban system, where both parties had daily visibility of the kanban cards building up over the two weeks. When all kanban slots were full, the Indian supplier would send the next load.
This working relationship allowed the business to save £100,000 of stock holding, whilst improving on time delivery.
Less Relentless Planning
Businesses only have a set number of hours and resource available. Often, they try to plan every bit of work that goes through the business.
A lean business understands the processes that keep repeating should be standardised and redesigned, so they work like clockwork. They’re set up to run with little thought, so they can just repeat over again. This allows the business to focus on other processes or products that are not every day jobs.
This approach allows the whole business to focus on the right things and increases overall efficiency, whilst not having to plan for everything going through the business.
Offer More Services and Products
By removing the waste in your processes and becoming more agile, you can offer more variation and choice to your customers. Why? because you can chop and change what you’re working on quickly and effortlessly.
A furniture manufacturer whom i worked with in 2017 traditionally bought and sold furniture. They decided to set up their own manufacturing facility, and within 6 months of developing their lean programme, they went from offering 10 product choices, to over 100 variations.
This allowed them to grow faster than they have ever grown, as they continued to take customers away from their competitors.
Increased Sales Capacity
By becoming lean in everything you do and implementing flow techniques, you can create a step change in productivity. You can quite literally process more with no additional resource. This resource includes, time, money and people.
Another door manufacturer i started working with in 2017, had 2 factories. Each factory produced the same products. They needed two factories to keep pace with their demand.
We developed a lean system and improved their processes, so they could double their sales, and process it all within one factory…without adding any extra heads.
This was achieved within 14 months. It meant that the business could achieve £3.5 million of extra sales per year, without any additional overhead… and whilst shutting one of their original factories.
Reduction in Scrap
Making right first time is crucial in lean. This means that we’re aiming to produce zero defects on the production line.
Using root cause analysis techniques, continuous improvement and visual management, you can highlight and eliminate defects so they don’t return.
A large blue chip organisation i once worked for realised $1 million of scrap savings in one year, just in the business unit i was working with, my adopting good lean practices and problem solving methods.
Less resource tied up in making your operations tick, means higher profitability. By focusing on reducing cycle times, lead times, and linking processes seamlessly, lean businesses can make a big impact in the cost to produce a product.
An injection moulding company made an 8% addition to their net profit each month. This meant they had more money to grow the business.
Greater Stock Turns
If you hold less stock and turn it over quicker, you’ll get the following benefits:
- Less cash tied up in stock and more cash in the bank
- Less floor space needed
- Less chances of obselete and damaged stock
- Faster recuperation between buying stock and getting paid by your customers
Holding less stock and increasing your stock turns, means you’re far more agile and healthy as a business.
A distributor i worked with in 2018, had a stock turn of 6. This means on average, they’ll deplete their stock every two months. When we created their stock control system, and identified how they could improve, they soon identified how to improve their stock turn to around 10. This had a huge impact to their business and profitability.
As well as an optimised workplace, which is clean, organised and efficient, a lean workplace means its a safe one, too.
There are no items dumped in the walkways or poorly replaced on racks. Everything has a home, and is clear to see and find.
The work environment means that slips trips and falls is reduced.
A medium size laminate manufacturer had an average of 2 accidents per month, which was extremely high. Over the course of 3 months, the business implemented a robust 5S system. AS a result, injuries and accidents were reduced to below average levels across the country.
Improved On-time Delivery
It goes without saying that by stripping wasteful activities and making processes flow, you get faster processes.
With the use of standard work, meaning your processes can be repeated the same way… and flowing processes to one piece flow, you can get consistently on time delivery of product.
An aerospace company i worked with in 2012 had an assembly area that produced parts for landing gear. Before the project, their on time delivery to plan was around 5%. They never really got anything out on time.
We used the essential lean tools to drive waste out of their processes. Within 6 months, they consistently achieved on time delivery of 100% every single week.
Become a Renowned Supplier of Choice
The workplace is gleaming. The performance has been improved. There are systems and processes which drive optimum efficiency. Both your suppliers and customers are now partners. Each working to the systems and processes that help optimise delivery.
It’ll soon give your business a great name in the industry for efficiency and high quality. Your customers will love you and so too your suppliers.
A small electronics company won a large order on the spot, once they walked their prospective client around their facility. The company was so impressed with how they worked and the cleanliness and sophistication of the workplace, they were blown away. They signed the work off and placed an order there and then!
As you can see, a large number of these lean manufacturing results are interlinked. If you improve your efficiency from end to end, you’ll get the following:
- systemised processes
- faster lead times
- better quality
- reduced costs
Lean is like a snowball effect. What must happen first is teh hard work to get you there. This hard work should equally be matched by perseverance. There’ll be roadblocks in the way, but maintaining progress will ensure you get there sooner than you think.
What companies use lean manufacturing? The large organisations use it as standard. Companies like Eaton Corporation, Tyco, BAE Systems, Motorola, Dyson, John Deer, Parker Hannifin, Intel, Microsoft, Nike, BMW, VW, Ford… The list goes on. This is method is over 30 years old and is proven to get results. However, companies are still trying to implement it today. If you’re a small business, it’s an absolute must to implement, but sadly, too many small businesses still haven’t adopted these techniques, yet.
What are the lean manufacturing principles? Lean is built around 5 key principles in everything it does. They are:
- Understand what your customers see as value
- Understand your value streams (the end to end processes that make this value)
- Make the value stream flow (by removing waste)
- Pull work through the business and make just in time
- Continuously improve