Change is inevitable in the world of manufacturing, but how do you know when your facility is ready to adapt to take the next step into a new process or expand to take on more business? If everything is going well and you and your team have put in the work, pounded the pavement, and gotten your feet in doors that you once thought were locked tight, expanding your business may seem like the most logical and appropriate next course of action. But is it?
Considering Growth Opportunities
While countless businesses have found themselves in a similar position throughout history, this is an all too common misstep and one that has been the downfall of many. When business is booming and profits are on the rise, hiring a premium sales staff and investing in more machinery is an easy sell, but that doesn’t necessarily mean it’s the right move—or, at least, not right now.
It's important to note that each business is different. Each has its own needs and goals in mind, and, therefore, it should go without saying that you should assess and identify your own unique situation before considering your options.
One facet to first look at is your company’s current efficiency metrics. As a business grows, any of its problems and inefficiencies are magnified. What was once an easily correctable, yet overlooked, scheduling cost could become a gross expenditure, now ingrained in your company culture and difficult to correct. That’s where lean manufacturing comes into play.
What is lean manufacturing?
Lean manufacturing is the practice of eliminating wasteful practices that fail to add value from the customer’s prospective. Sure, having excess inventory on hand brings some piece of mind in knowing that you have an extra supply in case of unplanned demand, and it can also limit the need for stringent oversight. But these shortsighted interests are easily outweighed by the added costs that either deduct from the company’s profits or are passed on to the customer. Either way, it’s important to identify and correct these types of wasteful activities before they become a much larger problem.
The idea of lean manufacturing was first utilized in the 1930's by Toyota and later expanded upon by James Womack and Daniel Jones in Lean Thinking (1996). Their thoughts on lean identified what is known as the five core principles of lean manufacturing. These principles are still heavily relied upon today and extend beyond the manufacturing industry.
The 5 Core Principles of Lean Manufacturing
Identify what value is from the customer’s perspective and what they are willing to pay for. Your sales team may be thrilled to have luxury company vehicles, but if they are not being used to better meet your customers’ needs, they are not adding value for the customer.
Value Stream Mapping
By mapping out your company’s workflow, you can identify where value is being added and to what degree.
This is where you need to ensure that your value stream remains smooth and products are easily transferred from one value-added station to the next.
The idea of having a pull system ensures that work is only pulled when there is a demand for it.
Effectively implementing a lean production system is no simple task, and it needs to be continuously assessed and improved upon as needed.
When implemented correctly, lean manufacturing can be very impactful for you and your business—especially when paired with an effective MES. For more information about lean manufacturing and additional ways to enhance your shop business productivity, subscribe to our blog!