Leaner and meaner - the way forward?

LEAN isn’t a target to be a achieved in itself, more a frame of mind that gets you where you want to be, argues JEZ DAVISON.

LEAN isn’t a target to be a achieved in itself, more a frame of mind that gets you where you want to be, argues JEZ DAVISON. And it’s paying off for companies on Teesside

“The beauty about lean manufacturing is its simplicity,” says Simon Bliss, project director of Billingham timber frame maker Datum.

“It breaks down processes, design and manufacture into bite-size chunks and adds tangible value to your bottom line.”

Simon can back up the clichés with impressive figures. One year after completing a programme run by the Lean Consortium – an organisation that sells lean training programmes for around £20,000 - Datum has boosted output by a whopping 30%.

So why are companies still sceptical of lean manufacturing and similar spin-offs including Six Sigma, claimed to be the fastest-growing business management system in industry?

Six Sigma uses complex statistical data to continually review and re-tune operations within a business. Almost 38% of respondents to a poll conducted by isixsigma.com claimed Six Sigma was pure hype, while a further 23.6% said they weren’t sure whether they believed in it.

While some have attributed this uncertainty to industry’s traditional wariness of fly-by-night management consultants, John Macdonald of the Lean Consortium, which, with the manufacturers’ association EEF is working with companies on Teesside, believes the real problem is a fundamental misunderstanding of lean benefits among bosses.

“People think that it’s about saving money, but it’s about adding value to the business,” he says.

“Also, they assume that the quickest route to efficiency is reducing headcount. Lean is focused on growing the business.”

“Teesside companies have demonstrated that it can work. Through the consortium, a window manufacturer increased capacity by 40% in two months.”

But others who have adopted the lean model say it’s a smiling assassin.

Nas Khan, MD of Stockton-based car retailer Jennings, has seen its best and worst traits. He says: “In our industry it has definitely improved supply chain efficiency and visibility. We can monitor where the vehicle is at any stage in the process, while turnaround times can be as quick as four weeks.

“Having said this, there is an argument to have an available surplus to cater for extra demand. At times we’ve had a desperate shortage of commercial vehicles.”

An incident last year ruthlessly exposed the inflexibility of the lean model, in which stock levels are regularly reduced - in some cases to zero - to save on working capital.

When an earthquake disrupted production at Riken Corporation - a supplier of piston rings - it halted production across the entire Japanese car industry. Major factories at Mazda and Honda had to stop work because there simply weren’t enough spare parts.

Critics questioned how a supposedly groundbreaking initiative - first tested in 1948 by Toyota and adopted vigorously by Nissan and its supply chain from the 1980s - could overlook the basic principle of inventory control. But despite the model’s deficiencies, Teesside firms are giving it the thumbs-up.

Kevin Maw, managing director of R W Injection Moulding in Barnard Castle, believes it allows bosses to step back from “everyday noise” and take an objective view of the business.

He says: “It’s surprising how many managers forget the basics. The trouble with common sense is that it isn’t all that common!”

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