Is lean manufacturing right for you?

In a world where local manufacturers are under increasing pressure, many are seeking better ways to work efficiently. For some, lean manufacturing is a valuable tool that gets productivity rising – but it’s not for everyone.

Here’s our big-picture view on the matter; drawn from a fusion of on-the-ground experience and industry analysis. Get a feel for where you stand on the “leanworthy spectrum” and ask yourself: is this tool right for me?

Who benefits from the lean manufacturing process?

Imagine that you’re heading a thriving Stone shop, producing custom benchtops for clients in the construction space. Orders are streaming in faster than ever, and clients are satisfied with your work. Naturally, demand rises. The trouble is, you’re at capacity and don’t see how you could possibly stretch things further.

Labour, as we all know, is hard to come by. If you do manage to find it, training new hires  will take precious time out of your day. New machinery is a better option, but in order to get it, you’ve got to crunch some numbers and see what’s feasible. So, what’s the solution?

Lean manufacturing could be your best bet. It’s all about maximally leveraging what you have – or making smart investments that support expansion with minimal growing pains.

How do you know if it’s the right tool for you? The only real way is to speak to experts like our sales reps, who have seen factories transformed by lean manufacturing principles. In saying that, there’s nothing stopping you from doing your own research before coming to the experts. The facts and figures below are a great starting point.

How to use lean manufacturing as a growth tool

In Lessons from the Titans: What Companies in the New Economy Can Learn From the Great Industrial Giants to Drive Sustainable Success, three Wall Street financial analysts took a thorough look at global leaders in the industrial sector. They came to some interesting conclusions. While examining Danaher, former Morgan Stenley industrial analyst Scott Davis saw lean manufacturing principles take the company from a firm desperately in need of help to one that became an industry leader.

Here’s what Danaher discovered throughout the process:

“The company found that lean manufacturing, and productivity in general, worked best in companies with steady growth; neither high nor low. As Jack Welch in GE realised in his early days at Six Sigma, the ideal unit volume growth cadence for rising productivity is somewhere between 4-5%. A higher rate can work, but requires putting a lot more capital in place; often at a lower return.”

In other words, a shop exceeding the 4-5% productivity growth rate would likely benefit from a machinery upgrade, allowing for greater production capacity. But what if they had neither the time nor capital to acquire such a machine?

The next best thing for those with existing CNCs could be a software solution like the DDX EasyStone suite. This solution allows for greater control over production cycles, making it easy to program multiple machines. Existing employees can be trained to use it in a matter of days – and it’s packed with time-saving features.

Another strategic investment is efficient materials handling solutions, like our Mistrello automatic slab storage system for the stone industry. The semi-automatic model is ideal for keeping Stone shops in order, minimising the time it takes to get materials onto the CNC bed.

While these lean manufacturing tools make the day-to-day operations easier, expecting them to double productivity is neither reasonable, nor in most cases, desirable. Scott gives us a much more realistic figure for steady, sustainable growth – one that’s achievable with the right equipment and processes.

“At its best, lean and other manufacturing tools allow a company to add 2-3% of manufacturing capacity without adding equipment, people, or footprint. It’s “free” capacity. With intensive, but not usually that expensive upfront training to implement lean,  a growing manufacturer can therefore supply 2-3% more revenue with limited extra costs. The result is a higher ROI on the factory assets. With a little bit of capital to keep equipment up-to-date or enable the productivity that can come with software investments, the result is even more reasonable cost-capacity, taking the 2-3% “free” up to 4-6% in total. Above that 4-6% growth range, you may lose many of the benefits of lean, as over time, wages are required and supply chain partners struggle to keep pace. You may make suboptimal decisions just to get goods out the door. Slow or negative growth that comes with a recession becomes even more problematic. If you resort to layoffs to offset the weaker demand, then you’re dismissing people trained in lean and immersed in your culture, which will mightily discourage remaining employees from adopting best practices needed to get there in the first place.”

We suggest starting by taking a good look at your overall operations and setup, then determining how you can make the most of what you’ve got. It’s often a good idea to get a third-party perspective on this matter as fresh eyes see what yours don’t. We know this from experience!

Sometimes, a new floor plan does the trick. At other times, we may suggest a truly revolutionary acquisition, like the CMS Kreator. This hybrid machine 3D prints jigs and molds, cutting down on both production time and materials used. Printed parts are then milled to perfection, making it a simple, lower-cost 2-part process that speeds up production time by up to 50%. That’s the epitome of a transformational machine – but again, it’s not for everyone.

One thing is for sure: no matter what your growth challenge is, a solution can be found. We always put ourselves in your shoes before we present the options – which is why we’re so good at finding a feasible fit for your needs.

Speak with one of our reps and you’ll experience this first-hand. You might just find the missing piece needed to get you ahead.