Lean Manufacturing: A Paradigm Shift in Attacking Waste
As a consultant of Lean Manufacturing I interact with multiple companies every year wanting to learn if there is something their company could work on to give them a strategic advantage in their marketplace. During these interactions I often ask how their company uses measurement to drive improvement and more specifically, how do they measure waste? This key question is the driving force behind Lean, since the way traditional companies measure waste is very different to the way a Lean company measures waste.
I find it very interesting when the traditional “Quality Driven” company only tracks their waste by the amount of un-sellable product it produces. While this can be a useful measurement, in itself it is not very lean. Since raw material costs in manufacturing are usually quite high and our accounting systems are built to track the product it can sell versus raw material costs, this type of waste measurement is clearly the most common. The problem with using this as your sole measurement of waste is that it promotes an organization to only focus on the product rather than the process that produces the product. Lean companies believe that bad product is a symptom of a bad process. Just like a runny nose is a symptom of a cold. The idea is to track the causes of waste and not the symptoms. If you focus on fixing the causes of waste then the symptoms (bad product) should go away. This is definitely a paradigm shift for most traditional companies but when used to attack the root cause it proves to be very valuable. In my experience, most companies see a minimum of a 10% reduction in waste over the first year by tracking and attacking the causes of waste and not their symptoms.
If you’d like to learn more about waste measurement and the classifications of Lean waste please contact scottheilmann@psquaredusa.com