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by Maura Buxton, Contributing Editor Posted on Wednesday, December 06, 2006 3:16:23 PM   | Abstract: | Companies embarking on lean initiatives would do well to focus on improving the visibility and control of their operations. |
Manufacturers pursuing lean are already well on their way to achieving competitive differentiation by satisfying customers and driving operational improvements. AberdeenGroup's new "Roadmap to Lean Success: Measurement and Control" study characterizes some of the lean efforts already under way: - 92% of best-in-class companies are pursuing lean for operational excellence
- 69% of best-in-class are looking to improve profitability
- 39% of companies have improved schedule attainment by over 40%
- 29% have boosted first-time quality results by 40% or more
- 14% enjoy at least a 6% uptick in bottom-line profitability
Given the successes achieved by companies overall, it's not surprising that best-in-class performers are gravitating to lean for operational performance improvements and bottom-line results, and have the highest expectations for their lean initiatives. Of those best-in-class companies that have started lean initiatives, 100% expect to recoup their investment within one year; 59% are even more ambitious, setting their sights on breaking even within six months. Value Stream Management Best-in-class lean companies are dedicated to pleasing their customers, and this philosophy is reflected in their organizational structures and business models. As shown in Figure 1, 54% of best-in-class companies have appointed business leaders to manage their value streams and emphasize a customer-focused approach to processes. Such operational efforts begin with cross-functional teams dedicated to developing an accurate picture of processes -- one that stretches from the customer through the organization and the supply chain. Resulting value stream maps depict the resources, product flows, and metrics required to deliver value-added products and services to meet specific customer requirements. As business managers, value-stream leaders are responsible for setting goals, managing performance, and delivering profits to the company. Measurements and controls must be set so that the enterprise achieves quality and on-time delivery metrics for the ultimate goal of customer satisfaction. It is imperative that value-stream leaders take into account both value-added and non-value-added efforts in their measurements in order to contain and eliminate waste as part of any best-in-class lean initiative. On the other hand, 80% of laggard organizations restrict lean efforts to departmental silos and have few plans to change. These companies may have specific, low-level efforts toward lean philosophies and techniques within individual areas of manufacturing operations, but those efforts will not achieve the desired outcomes or get the needed recognition by senior management without the appropriate investment in value-stream mapping and the associated definition of measurements and controls that lead toward operational excellence. Lean "spot" solutions, both manual and technology-enabled, are only a small first step toward leaning out the enterprise. Improved Control and Visibility While all lean manufacturers seek to leverage proven techniques that eliminate waste, support pull-based processes, and promote continuous improvement, the definitive driver for best-in-class distinction appears to be the desire to improve visibility and control over operations. Aberdeen's study results confirmed that an overwhelming majority of best-in-class companies are placing a priority on technology-enabled systems to analyze root cause and effect and to immediately take corrective action (see Figure 2). Most manufacturers operate on a reactionary model. As soon as a production cell underperforms or finished-product QA inspections begin to drift outside of tolerance, technology-enabled processes kick in to notify management. Ideally, more predictive monitoring would send warnings in advance, enabling a more preventative response. Page : 1 2 ... NEXT |