Lean Manufacturing: lessons for logistics

Companies that will survive the current harsh environment will be those that strive to the utmost to survive and improve – and sometimes, it pays to look at others’ successful practices and adopt them. Several logistics companies are now looking at Lean Manufacturing in the quest to improve their processes.

Gian Schiava considers how logistics is getting Lean and has a closer look at 5S methodology.

1. Improved Profits by eliminating waste
2. Just In Time (JIT)
3. 7 Wastes
   – 5S
   – Continuous improvement (Kaizen)
   – SMED
   – (Single Minute Exchange of Dies)
   – Visual Management
   – Mistake Proofing
   – TPM (Total Productivity Management)
   – Standardised Work
4. Preventing Reoccurrence
   (Jidoka)
   Quality and Productivity
5. Production Levelling

First, we need to have an understanding of what Lean Manufacturing is. Essentially, it is a management approach that endeavours to eliminate or reduce all activities that do not add value. The core idea is that, by making production ‘leaner’, product quality will improve and manufacturing costs should decrease. There is a strong focus on current activities and ways in which they can be made as efficient as possible. While the Lean approach and its various techniques are best known from Japanese examples, its origins can actually be traced back to British and American principles, as conceived by people like W. Edwards Deming and Henry Ford. However, it took decades before Western companies started to re-learn and implement the techniques and disciplines involved.

“The core idea is that, by making production ‘leaner’, product quality will improve and manufacturing costs should decrease.”

In any business area, a new thought process will be embraced by many new ‘gurus’ who will put their own spin on a concept. In some cases, this is merely a quest to become an opinion leader but, sometimes, a bright thinker will add new insights, which lead to a new management approach. Among the methods developed in the second half of the last century were Kaizen, Throughput reduction, Pull production, Line balancing, 5S, TQM, Quality Circles, SPC, PDCA (also called PDSA) and OEE. New ideas are quite possibly being added right now.

The Big Guns

We will have a closer look at 5S later, but we can safely say that all these approaches seek to identify problems, eliminate superfluous activity, reduce the total number of process steps or redesign the problem areas. Word of the success of these discipline-based methods soon spread and led to their wide adoption.

Six Sigma has become one of the bestknown quality management methods. It is about much more than just improving manufacturing; it shines a light on all business processes. It is founded on statistical process control (SPC), which calculates sigma (standard deviation) from three to six units, in 0.5 unit steps. It incorporates elements from Quality Circle programs and Deming-derived sampling methods. Deming’s approach contrasted focus on quality, which leads to rise in quality and fall in costs, with focus on costs, which leads to decline in quality and rise in costs.

Fixed procedures, which are founded on data collection, are used to solve problems. Six Sigma has a particular focus on customers and client satisfaction and the term is often heard within project teams. Large companies like General Electric, Motorola, Siemens, Caterpillar, Microsoft and Xerox have implemented Six Sigma.

“Deming’s approach contrasted focus on quality, which leads to rise in quality and fall in costs, with focus on costs, which leads to decline in quality and rise in costs. ”

Most methods use multi-functional teams, which investigate designated problem areas. Process steps are analysed and their costs are may also be determined – which is why financial representatives are often involved in the teams. Ultimately, recommendations will be made on the elimination, reduction or enforcement of the steps.

Lean logistics

Logistic professionals have thoroughly looked at these methods in the quest to improve logistic processes and the term ‘lean logistics’ began to be heard from the beginning of this millennium. It seeks to reduce stock as much as possible, to reduce the time taken in getting products from A to B and, in the meantime, to save as much costs as possible. The results vary from case to case. Working in a very disciplined manner, based on the sharing of all kinds of statistics and data, is something employees have to get used to. Whatever method is adopted, management has to lead by example. If they start getting sloppy, lessen the drive and seem to be losing interest, then everyone else will soon follow suit.

Some outstanding results have been achieved with the implementation of Kaizen, Visual Management and the 5S method. The panel alongside this article goes into detail about 5S, which aimed at the improvement of the work environment.
By optimising the surroundings of the employees, waste can be reduced and a foundation is made for improved quality. A wellorganized workplace has many advantages, including improvements in safety and better work, flowing from better organisation. It does not end: it is about continuous improvement, as is the case with Kaizen – which actually means ‘continuous improvement’. The system is actually based on a major clean-up. Sloppiness and lack of cleanliness lead to accidents. 5S demands a clean, well-organized and clear workplace. Safety will increase and the quality of the work will benefit accordingly.

All-round benefits

All of the above should lead to reduced set-up times, reduced cycle times, increased floor space, lower safety incident/accident rates, less wasted labour and/or better equipment reliability. It sounds really good, doesn’t it? It certainly can be too good to be true and there have been failures. Lack of leadership or management support leads to failure to sustain. An excess of ambition can lead to businesses trying to run before they can walk. Trying to go from a messy workplace to a LeanSigma enterprise in one leap is like trying to jump onto an express train as it thunders through a station at 100mph. It cannot be done, and disappointment leads to abandonment. Start with 5S and build from there.

Conclusion

Logistics professionals can learn from proven management methods in Lean Manufacturing. The rate of success will depend on adapting the ideas for the particular working area, and on persevering to ensure they are implemented. Nothing is impossible, but it only comes with hard work.