Lean Manufacturing Is Perfect for Smaller Businesses (Part I)

Over the last couple years, disruption has exaggerated a lot of manufacturers’ inefficiencies. In some industries, demand surged, as in the demand for home technology and networking because people suddenly needed to connect online for work and personal and family interests.

However, the bottom line is that variability is the enemy of efficiency. To be efficient in manufacturing (or be Lean), you need to be able to respond to and cope effectively with unpredictability. Unpredictability happens in daily life, as it has since the early days of car manufacturing, for example, that led to Toyota’s Production System (TPS).

Larger companies were impacted heavily, but many of them were buffered by significant cash reserves that smaller companies lacked, so many smaller businesses were impacted to a greater degree.

The Advantage of Small

Lean has always been a goal, in one form or another, in the manufacturing world, but it’s become more critical in the last couple of years, and certainly more companies have realized that they’re ill prepared to suffer disruption on a large scale. But ironically, smaller companies have less in overhead to adapt to changes. As they say, “it’s easier to turn a speedboat than a cruise ship,” so small companies’ size is an advantage in that respect. They can change more easily, but the question is, “how?”. Or what tools and methodologies can they put in place to help them transform?

Change is difficult for any size company. No large company suddenly says, “Hey, we’re going to be Lean,” and then it happens in a snap or even over six months or a year. Regardless of company size, Lean starts small—likely in a specific area—and grows over time. Lean manufacturing is adopted slowly and expands organically.

In smaller companies you have more direct access to the executive team to make a company-wide transformation and, make no mistake, executive buy-in is critical to Lean success. Below are a few fundamental principles of Lean manufacturing worth considering for smaller organizations.

Fundamental Principle #1: Customer First

The primary principle of Lean is customer first. There’s nothing more important than what the customer wants. Everything should be aligned around that need, whether it’s designing a product or manufacturing a product based on customer demand. Companies sometimes forget about this very simple but critically important principle when they’re looking at how to change internally or why they should change. The driving force should always be what’s important to the customer or what the customer needs. Sometimes the customer could be internal. For example, a manufacturing department delivering to a distribution network: the distribution network, then, is a customer. Nonetheless, customer first is the most important principle of Lean.

Fundamental Principle #2: Waste Not

Another Lean principle, derived from muda, the Japanese term for waste, is only produce what’s needed. In other words, minimize waste as much as possible. One of the most important of the seven types of waste in Lean, especially for smaller companies, is not overproduce, which is wasteful of time, effort, materials, and parts. Small companies don’t have the luxury or the budgets to overproduce.

Satisfy the customer but do so by being efficient and by producing only what’s needed to meet that customer need and no more—even if more can be done. It is more efficient to repurpose that time and effort somewhere else.

Fundamental Principle #3: Standardize Products and Operations

Standardize products, if possible. However, consumers today want customized products, so this Lean principal is less of a focus, depending upon the industry. An extreme analogy is no one wants a black Ford Model T anymore. We all prefer custom products precisely tailored to what we want. So, standardization of product is difficult these days.

Standardization of operations to balance and even out workload, however, is still a key part of Lean manufacturing, described by another Japanese term, mura. Again, larger companies, with a litany of legacy processes and systems and people, find it much harder to change direction and standardize. Smaller companies typically have fewer legacy processes and systems; so theoretically, they enact change and remove inconsistencies easier because the list of things to change is much smaller.

Fundamental Principle #4: Keep Asking Why?

Smaller companies face endless daily problems either on the manufacturing shop floor or at the more strategic level with product engineering and design. Lean tools have been developed along with lean principles that help companies stretch their problem-solving so their teams can be more adept at facing challenges and solving them effectively.

The Five Whys is a classic Lean manufacturing tool to help you get to the root cause of a problem or expose potential problems in your processes.

It’s really a simple approach.

If you have a problem, ask Why? five times:

I couldn’t get to work on time this morning.

Why? I got up late.

Why? I didn’t set my alarm clock last night.

Why? I forgot.

Why? I was out too late.

Why? I didn’t drive to pub and my friends wanted to stay late.

And so on.

You can use this with your kids, spouses, and anybody else. Sometimes teams—and manufacturing teams, especially—lack some of these basic structures and disciplines to effectively address challenges and problems. The five whys is a classic and very helpful Lean tool.

Lean provides a number of these simple techniques as part of its tool kit, if you will, that empower company teams to dig in and find the right answers to nagging problems, which enable smaller companies to solve their customer and operational problems in the most efficient way.

Where the Rubber Meets the Road

Next time we will discuss how to apply these principals at your company, associated challenges, and what kind of results you can expect.

If this discussion has piqued your interest in how to implement Lean principles at your company, please contact your local SOLIDWORKS reseller to learn about DELMIA 3DLean, which makes it easier to collaborate with Lean teams—internally and externally—while automatically capturing all data securely in the cloud on the 3DEXPERIENCE® platform.

Adrian Wood

Adrian has spent over 20 years in customer-facing positions ranging from sales and marketing, to fulfilment and account management. His career focus has been on problem solving and development within emerging and rapid growth segments to enable customer success across a wide range of industries from High Tech to Retail and Logistics and across multiple disciplines such as Supply Chain, Manufacturing Simulation and Analytics.