Platform one for the lean bandwagon

A quarter point on interest rates and more threatened, probably before the end of the year. No-one is talking about a return to the nightmare of the mid '90s, but it's plain that pressure on costs is set to rise for all but those with a very significant dependence on materials from the US and other countries where currencies are gently sliding. Sadly, the latest PMI (Purchasing Managers' Index) figures that show robust recoveries of output and new business growth (domestic and export) in the UK manufacturing economy in June - indeed the best since since July 2004 - are of little comfort. While Roy Ayliffe, director of professional practice at CIPS, reports improvements in manufacturers' pricing power, he also alludes to mounting cost pressures and a lack of spare capacity at suppliers, which, combined with increased global demand for raw materials, is contributing to lengthening average lead-times that in turn threaten competitiveness. Small wonder management teams are increasingly looking to the one cost-cutting, improvement-instilling initiative likely to be able to solve their problems. One that is proven to work not just in the short term, but sustainably into the future. Lean thinking: the ideas, methods, tools and techniques for identifying and removing 'waste' while promoting continuous improvement on the shop floor - but, crucially, extended potentially to every facet of their businesses and even supply chains. If demand for lean-orientated business conferences, like that run by this journal for AME (the Association for Manufacturing Excellence) last month, is anything to go by, we're looking at a veritable landslide for lean. It's anecdotal evidence, of course, but the sheer number of manufacturers and IT systems developers also talking vociferously about their trail-blazing lean implementations adds credibility. And they're not just in industries like the automotive sector that traditionally benefited from earlier, so-called 'pure' lean. Everyone is doing it or looking at joining the cool lean club. All of which is very encouraging for UK manufacturing plc - unless, that is, business leaders think they have stumbled on a silver bullet. Because even with lean thinking, there just isn't one. Lean is a lot of excellent things and without doubt essential for manufacturing companies today if we're to survive and prosper in the competitive global village we inhabit. But sorry, one thing lean is not is a panacea. That's the first of the caveats. The second concerns that word 'pure'. Modern, 'impure' broader church lean interpretation, which takes into account most manufacturers' inevitable requirements for greater production and business flexibility to respond to changing product mixes, engineering developments and customer demand, is what you need. Forget simple lean with its visual-only pull signals for production. That's not what this is about. You're going to need a bit more sophistication and some solid IT to deliver it. And that's particularly the case when it comes to spreading lean ideas throughout as many of your business processes as is humanly possible - or using its techniques to gain some robust analytics preparatory to reshaping your business and driving it forward to a better future. Finally, 'going lean' will not just be rewarding: it will also mean hard work over a long period, requiring sustained effort and time from the senior management team up-front and your best people across all the departments it touches thereafter. Think of your last ERP implementation and its subsequent developments, and you're on the right track. It may well also require some investment - including, but not exclusively, in good, modern IT, augmenting or renewing what you already have. There is no truth in the assertion that a wholesale 'rip and replace' job is needed, but it's highly likely that you will find changes and additions on the agenda, most of which should be self-funding with a fairly rapid ROI against hard and some softer KPIs around the company. See page 22 for some detail: you'll find plenty of observations from the AME conference. And if you think you could benefit from learning from others' hard-won experience, invest a day in the next Best of British Manufacturing IT_Conference, running at Haydock Park on 26 September (www.bestofbritishmfg.co.uk). You'll get 'warts and all' advice from 20 manufacturers, including Lotus, Bentley Motors, Red Bull Racing (formerly Jaguar Racing), Stannah Lifts, Stadco, Worldmark, Unipart, Deltron-Emcon, Bendalls Engineering and LycoRed - all offering the secrets of their success. No company already under pressure can afford to get lean or their future even slightly wrong. Make sure you get your lean and IT transformation right first time.