Complexity requires simplicity for Lean manufacturing
Lean manufacturing and the advent of Big Data have made operations more complex and the company needs to make the operational process as simple as possible to avoid chaos.
Gone are the days when ASAP was good enough for a manufacturing business. The growth of Lean manufacturing has provided faster delivery to customers. Now, combining Lean, technology, analysis of Big Data and creative thinking, we’ve trained the customer to expect things to happen immediately. Being competitive requires customization at that same speed.
So, we add sizes, colors, capability options, and every other distinguishing characteristic we can conceive. Done well, that results in increased sales and profits. Done poorly, it can kill a business. Understanding customer use of a product and focus on simplifying complexity are requirements of success.
Complexity costs are not easily quantified, but they must be appreciated. Product derivative and customization strategies that ignore the very real impacts of complexity can slice margins, induce errors, and engulf an organization in chaos. Standard costs will mislead decision-making even more than usual and the executive team needs to acknowledge that.
Added options inject inventory management ramifications, opportunities for error in order entry, production and shipping, and additional transactions from BOMs to purchasing to receiving to accounts payable. This potential waste and confusion can be eliminated or minimized by creating systems that consider strategic implications from the beginning.
Postponement processes–waiting until the last possible moment to finalize an item for a specific customer–can simplify execution of mass customization. A product design team that doesn’t understand postponement or design products to facilitate it will undermine that operational strategy.
Too many non-operational executives believe that shipping to one more country is easy. They fail to understand that adding one more color or size or software option or customer label grows complexity. Operational leadership must ensure scalable processes and parts rationalization. Modular product design using common parts and processes designed to eliminate costly transactions are requisite to simplification thinking.
Design engineers and product marketing may well not understand how important simplicity is to creating and meeting market expectations. We can’t afford not to. Lean alone didn’t enable rising customer expectations and alone it won’t ensure simplification. Perhaps not intuitively obvious, technology and analytics are integral to simplification. We have access to more data more quickly than ever, and to ignore it as “not Lean” is silly. If data is valuable, use it. If it’s not, don’t create it in the first place. That thinking is at the core of simplification and of Lean.
What additional opportunities do you have to simplify work lives within your organization?
Original content can be found at www.ame.org.