Lean manufacturing still matters

It’s surprising how many businesses believe that lean manufacturing methods are ingrained in their operations when in fact they are only really scratching the surface. Despite the paybacks that can be gained by optimising processes, improving product quality and eliminating waste, many manufacturers have not maintained their focus on lean. Some manufacturers think they have ‘gone lean’ and that they’ve ‘been there and done that’, but in truth they have dropped the ball – and it’s worth picking up again.

We are talking here mostly (though not exclusively) of SMEs. In my experience, leading transformation programmes at manufacturers of all sizes and across many sectors, Tier 1 companies have typically been good at systemising and retaining working practices as part of their manufacturing systems. On the other hand, smaller businesses – although often more agile and entrepreneurial – can be dependent on approaches and knowledge being driven forward by individuals.

In reality some businesses, whilst still talking about lean practices have really reverted to the old industrial engineering approach – activities driven by manufacturing engineers in which shop floor workers have improvements applied to them rather than being truly involved in shaping them to improve performance. Some companies that had developed lean as part of daily life, building an ‘unconscious competence’ around its application have let the focus drift. They have lost this embedded capability, missing out on lean’s benefits without realising it.

One reason for the loss in lean focus dates to the financial crisis of 2007-2008. At a time when businesses were reducing headcount, lean experts were absorbed into other roles and the lean drive they championed was seen as secondary. Whilst many of these experts have now been promoted to more senior posts, their deep understanding of lean wasn’t fully passed on or rebuilt in the ranks below them.

Another reason for lean’s neglect is distraction. It’s more exciting activating new ideas, such as digitalisation and Industry 4.0, than it is maintaining older ones. But when preparing for the future, businesses need solid foundations to build on, and lean provides these. Lean leads to continuous improvements made on a solid platform of operational stability. Many businesses believe they have this solid platform when actually it is – as a lean audit would show – rather wobbly, reliant on individuals making manufacturing processes work.

It is surprising that companies have become so complacent about lean when its benefits have been so well-proven over so many years. In the late 1980s, the Massachusetts Institute of Technology conducted a five-year comparative study into automotive assembly plants in Europe, the USA and Japan, and in 1991 a book based on this study (‘The Machine That Changed the World’) revealed how Japan’s competitive advantage was rooted in distinctive thinking and working practices. To summarise those concepts and practices, the authors coined the phrase ‘lean’, and it caught on. So too did the practices, not only in automotive manufacturing but other industries too. By adopting lean – and, crucially, by linking it to output targets – manufacturers around the world set out to recover ground lost to the Japanese.

In the last two decades, however, lean hasn’t only been forgotten in some quarters of industry, in others it has also fallen out of favour. By the mid-1990s lean consultancy had become a commodity, too often sold on price and convenience rather than thoroughness and quality. This led to some disappointing results because lean implementation wasn’t what it should be. Too many businesses regarded lean as an isolated set of initiatives without embedding it in their day-to-day operations and managing it as part of overall business strategy. Lean tools and techniques were not – are still not – applied as they should be. To give just one, highly visible example: SQDCP (Safety, Quality, Delivery, Cost and People) visual management boards are often used solely to fix current problems when they should also trigger the steps necessary to prevent the same problems recurring.

Far from being dead, however, lean is still practiced effectively by many larger manufacturers and could well be on the brink of a revival at other large manufacturers and SMEs. Ironically, this is partly due to digitalisation occupying the headspace once afforded to lean. Digitalisation is providing masses of data which can help identify where lean practices aren’t fully embedded, and where there would be efficiency gains if they were. Businesses are being progressive, not backward-looking, in considering afresh the benefits of lean!

Proof that lean is still alive but evolving was seen last year with the launch of the new UK government-funded National Manufacturing 9Competitiveness Levels (NMCL) programme. It’s an approach designed to make the UK’s advanced automotive manufacturing supply chain, as well as other manufacturers in other sectors, improve competitiveness, raise workforce capacity and increase productivity. And at its heart is much lean thinking.

NMCL is designed to help manufacturers of all sizes and stages of development understand how competitive they currently are and develop the specific business capabilities needed to boost their performance. The programme includes an in-depth competitiveness assessment based on company capabilities and the views of key customers. This data is then applied to investment decisions across six areas of competitiveness: quality, cost, delivery (all traditional areas of lean), flexibility, products/technology, and customer experience.

There is no ‘one size fits all’ with NMCL, just as there is no off-the-shelf ‘cookbook’ for lean. Introducing, reviving or extending lean practices must be tailor-made for each individual manufacturer and directly related to their business strategy. Every lean activity must drive benefit, with clearly defined objectives and measurable outcomes. Far from being a toolbox to be applied everywhere or a box-ticking exercise to be done once and then forgotten, lean must be deeply embedded in day-to-day activities and practiced continuously. When this is done, the rewards are so worthwhile that manufacturers kick themselves for not going lean earlier or staying lean after they did.

Andy Spence
Andy Spence is General Manager – Aerospace at SMMT Industry Forum. Industry Forum’s integrated team of consultants and practitioners help major global manufacturers and SMEs understand, optimise and improve manufacturing capability and performance.

Organisations can register their interest to take part in the NMCL programme by completing by completing a short questionnaire on the NMCL website: www.nmcl.co.uk.