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Dangers for not implementing Lean manufacturing in down economy

Business Is Poor, We Must Improve

Another challenge, but also a learning opportunity as a Lean leader, is knowing when to enhance a process and when to not . This sounds kind of self-defeating, but there is a company to run and you have to learn to bal ance the day-to-day needs and continuous improvement. There are four thoughts here and that i want to hit on all four:

1. Business is good, why improve?
2. Business is good, we must improve.
3. Business is poor, why improve?
4. Business is poor, we must improve.

Business Is Good, Why Improve?

If you think that this manner, then your reasoning could also be borne out of fear. I have encountered a couple of leaders in my time who think this manner and are proud of the established order. Revenue is sweet, costs are down, margins are healthy, and other people are happy … why improve? I can see the rationale behind this, but it’s not forward-thinking.

What an excellent time to take a position in Lean and make it even better. Often when a leader has this mentality, the business is busy, work is steady, and there is fear of disrupting it.

Why do anything to the car if dials indicate it’s running smoothly? Well, this is often an excellent time for Lean manufacturing: check out the potential growth coming, evaluate your processes, and find ways to enhance even more. Wouldn’t more profits and lower costs be better?

Now, on the opposite hand, tons of firms begin reinvesting within the company at this stage because they need the cash and resources to try to do so. Time may be an issue because employees may be swamped keeping up with the work and, thus, adding continuous improvement projects may be overload.

As long as companies grow and increase profits, they often don’t see waste. Sometimes organizational leaders are conscious of the waste but do nothing. Left unchanged, the method just inherits the waste as “part of the method,” and this added cost is now checked out as general operating expense. Good times could be blinders to problems.

Business Is Good, We Must Improve

This is the right mindset and everything is in your corner. This falls under the model of using Lean to achieve growth, create a stable workforce, and improve things even more. This is Lean thinking and the proper leadership quality.

Taking time to prevent an appearance at the corporate during healthy times is sensible. Like the scenario above, healthy revenue often means a busy company. As a pacesetter under this theme, you’ll be asking an equivalent sorts of questions.

Why should I add yet another layer of work with continuous improvement projects? Part of your Lean journey is evaluating your processes, collecting data, and capturing what we call the present state. Successful evaluations of the company happen when there is actual work to analyze.

If your efforts are centered on a production process, well, there must be the product being built. If office improvements are desired, office workers need a healthy stream of labor orders, purchase orders, customer calls, etc. to watch and analyze.

So, starting Lean manufacturing when you are quite busy is great for that purpose. Kaizen Assembly has a client that fell within this category. The organization also was experiencing some healthy growth and commenced to ascertain that its current processes from marketing, customer service, production, and warehouse wouldn’t be ready to operate in its current state.

The pain of steady work added to continued growth was reaching the verge of collapse. I did a full evaluation of the company’s internal value stream, which was a macro look from receiving customer orders to shipping the merchandise.

Major overhauls were needed if they were going to successfully capture and process the added orders that would be coming in during the next couple of years.

Although they were quite busy, they went forward with an entire Lean transformation of the business, including a whole layout change of the office, production, and warehouse. It was crazy sometimes, but they achieved remarkable results.

Business Is Poor, Why Improve?

This is far and away from the foremost common scenario when it involves avoiding change and continuous improvement. I have held various high-level positions in companies and now as a business owner, I understand the hesitation here.

Money could also be tight, with little or no to take a position. The most recent economic downturn revealed tons about the facility of Lean and continuous improvement.

During this point, we didn’t lose one customer. We had a few contract reductions, but we stayed quite busy. The level of our workload is contingent on our customer’s revenue stream. Companies implementing Lean principles often (not always, but often) can blaze through a slow economy because they need to embrace Lean manufacturing.

The company doesn’t buy excessive amounts of inventory and traffic jam needed money. Its workplaces are extremely organized, and it challenges the necessity to shop for stuff unless it’s absolutely necessary. The organization believes in a highly cross-trained workforce where people have acquired multiple skills.

Machines and equipment are maintained through comprehensive total productive maintenance programs, which reduce cost, spare inventory, and downtime. The production processes are streamlined with less waste, reduced travel distance, standard work, and fewer add processes.

This all equates to higher productivity and quality. I could continue and on, but one among the good attributes of Lean manufacturing is the best income and shorter inputs to outputs.

Simply put, faster return on the investment parturient and material. When the economy drops off, yes, they’ll got to make some cuts, but maybe not as bad as if they weren’t Lean. One of our longest-running customers witnessed this scenario. After four years of what i might consider heavy Lean implementations, the recession hit.

I spoke with the vice-chairman of operations and he stated that some cuts did happen, but they weren’t nearly as severe as others within the area experienced. He attributed this to what he called “a small bump within the road,” instead of a serious downsize thanks to Lean and therefore the continuous improvement over the past four years.

He also stated that when it did hamper, they accelerated their Lean projects. Long-term Lean journeys are, at their core, strategic and critical to surviving a recession or a slower economy. When times are slow, it’s the simplest time to take a seat back and take a glance at the large picture. What are you able to do to enhance the business now in order that you’re prepared when it picks up again

Business Is Poor, We Must Improve

Reality must be kicking in here if you’re during this scenario. Now, this might mean you’ve got reached a catastrophic stage of the business, or it’s going to be just slow, and you now have an excellent opportunity to evaluate the needs of the business.

Time may be available to do so and the change can be small, but it is yet another good time to begin Lean. As mentioned before, I’m a firm believer in preparing your operation when business picks up again because in most cases it does.

As of this writing in the corona Pandemic situation, the still price are doubled,  unemployment is still hovering around.

However, there are several positive economic indicators with manufacturing picking up; Most companies are not hiring due to fear. I can understand this as an employer. Adding payroll is about evaluating risk and nobody wants to rent someone then rotate and allow them to enter eight months.

Turnover is expensive. We also juggle risk when deciding to take a position or innovate. The innovation i’m suggesting here is in reference to Lean manufacturing and lean tools.

Let’s be honest, a Lean journey requires a financial investment in such things as consulting, training, supplies, contractors, employee involvement, etc.

I can think of two companies we support that are aggressively implementing Lean during a slow time for them with this mindset. “Reduce cost, open up floor space, and cross-train everyone.” The cost reduction is not in resources, but inefficient processes, excessive inventory, and poor suppliers.

When a business starts an upward trend for them, they’re going to got to hire again and their current processes won’t enable them to handle another dip within the economy.

They have come to the belief that they have to be better prepared next time. Cuts to the workforce won’t be needed or as drastic if they hit the waste reduction path.

Beginning a Lean journey and embarking on continuous improvement may be a bold move. Trying to seek out the proper timing for it’s nearly impossible.

You can juggle all four of the above scenarios but, truly, there’s no right time or wrong time to start out. Just let it begin

Comments
  • Excellent blog on subject and very well explained various scenarios and how Lean methodologies can help in each one of this.
    It’s imperative in modern times to continuously improve Nd be better in everything we do in operation and lean can help a lot!
    In my career I used it successfully across plants, sites in various countries and I strongly advocate Lean as culture in organisation to have resilient and sustainable business!
    Thanks Nirav for very insightful, thought provoking and motivating blog on Lean!
    Keep up enlightening us!

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