Lean thinking still worryingly blilnkered

A worrying majority of manufacturers’ business leaders still regard lean thinking as about factory floor initiatives, rather than the whole business improvement philosophy it has become. Also, although a substantial proportion of managers do now appear to acknowledge broader applicability of lean concepts – notably in production planning, engineering design and supply chain management – too many are failing to act on their beliefs, or to sustain projects once started. These are among top line findings of a study commissioned by Manufacturing Computer Solutions from Benchmark Research. In times of extreme cost and competitiveness pressures, UK Manufacturing plc seems to be missing out on one of the most powerful routes to desperately needed sustained business improvement. More than half of manufacturing companies senior people now believe that lean thinking can benefit most of their businesses, with only sales order processing, engineering change control, customer management and financial controls scoring below 60%. While that is encouraging – and so is the finding that most UK manufacturers are now involved or plan to be within 12—18 months – the fact that one in three manufacturers still have no plans for lean is not. And neither is the revelation that relatively few have yet progressed beyond production – even though those that have report consistently good gains. Specifically on the IT front, lean thinking is most likely to have changed things in three ways. It’s driven improved access to current information from existing databases, spreadsheets and ERP systems. It’s also changed the MRPII aspects of firms’ ERP systems, in terms of reports and production management from existing systems. And it’s prompted implementation of more shop floor data collection (SFDC) subsystems. Similarly, replacing paper-based works management with electronic supervisory production monitoring and management systems, providing appropriate information for managers, cell leaders and operators, is significant on the list for change. Lean demands accurate, up-to-date relevant information flow, and easy, local access to it for all concerned. But better information for lean doesn’t stop at there. It’s also the case that MRPII, within core business ERP systems, in many cases needs to be changed in terms at least of its outputs and their use. Adding new and/or modifying existing MRPII reports is high on the agenda both at the production and the planning levels. Indeed, that is the main requirement of Lean Thinking of MRPII/ERP – to ensure that more meaningful and useful information is extracted and presented. A minority also refer to MRPII being switched off in terms of driving day-to-day production. Interestingly, in one in five instances, lean initiatives also appear to prompt the implementation of new MRPII/ERP systems – less surprising when you remember that many factories (especially those with under 200 staff) still do not have MRPII/ERP. Benchmark’s 2003 IT in Manufacturing survey found that 36% of factories with 50-199 staff only have IT for stock control. Additionally, it revealed that many MRP/ERP solutions are now quite old: more than one in three were implemented over six years ago and one in 10 date back over a decade, suggesting that Lean initiatives – as the catalyst for change – can also be part of an ERP system justification. Lean Thinking has not yet resulted in substantive measurable uptake of other applications, especially those that reach outside organisations’ four walls into their supply chain or to partners. It is there, but remains small compared with the main thrust: IT as part of the drive to improve internal processes and systems associated with production. Lean initiatives in and around factory operations prompt de-centralised planning and scheduling, moving responsibility, quite rightly, down the command chain, to cell leaders, and supporting them with appropriate systems and information as outlined above. In this regard, however, lean thinking seems to have done relatively little to encourage the adoption of advanced planning and scheduling (APS) tools or finite schedulers to supplant at least the scheduling aspects of MRPII. However, both have been prompted in a significant minority of cases, suggesting that APS’s decision-support facilities are proving beneficial at the very least with manufacturers needing to operate in mixed-mode. Areas where a need for lean thinking is acknowledged but where the gap for actual application is greatest include engineering/product design, customer/account management and financial management. The gap for the rest is between 15 and 20%, suggesting not that Lean is hard to apply, but that there are other priorities and initiatives from other quarters in the business yet to catch on – a common reported problem in light of the potential number of departments potentially involved.