Understanding 'lean thinking' for the SME supply chain

The Seven Deadly Sins

By Pratik Kajaria, Regional Sales Supervisor at Zebra Technologies

1. Speculative production: While thinking ahead is an important part of any business strategy, the result of producing to high speculative demand or supposed economic batches is rarely rewarded in today's economic environment—viewed more and more by local businesses as excessive, time consuming and costly to store.

2. Employee waiting: Whether for the previous, current or next step in the manufacturing process, we must remember that for many local SMEs the most valuable—and variable—investment in the supply chain is workers time. Many enterprises forget this as there tends to be an abundance of talent available in the GCC. Nonetheless, the goal in the modern workplace should be to maximise the utilisation and efficiency of operatives first, machines second.

3. Transportation: Unnecessary transport of materials, WIP (work in progress) and finished goods adds zero value to the product. Instead of improving transportation processes and systems, lean thinking favors minimising or eliminating them altogether.

4. Non-value added tools: Doing more work than is necessary according to the 'value' principle is often due to poor facility layout or misguided attempts to recover expensive machinery costs. Lean essentially advocates using simpler multifunctional tools, as well as "cell manufacturing" processes which can combine several steps into one.

5. Unnecessary motion: Relating to people bending, stretching or walking too far, due primarily to the inappropriate location (and potentially also design) of tools, parts inventories and fixtures. Instead of simply automating wasted motion, lean goes a step beyond that and requires that the operations themselves be fundamentally rethought and (ideally) eliminated.

6. Excess inventory: This specifically refers to the relationship between operations and automated tools within the SME supply chain; frequently resulting in overproduction and usually due to processes with excessively long cycle times - leading in turn to cost and clutter. This waste also creates additional waste in the form of increased lead-times, extra floor space requirements & handling, high-interest charges, and again, the associated costs.

7. Defects: Although sometimes hard to evade, producing defective product always results in rework and scrap, invariably adding to manufacturing costs. Lean focuses on preventing the occurrence of defects altogether, which SMEs need to realise is different than just improving processes to find and repair defects post-product. Such an approach usually requires more long-term investments but the benefits are equally lasting.

Where do we go from here?

This is a clear warning for lean manufacturing "wannabes" to avoid cherry picking lean initiatives such as simply setting up kanban replenishment or reducing set-up times. The IT sector is in fact responding to the market's current needs, seen in the recent boom of locally available Lean Application Solutions. These can be found in the form of e-kanbans, lean loop-replenishment sizing applications, Web EDI, and most recently real-time asset management solutions.

Whether tracking containers through a port, optimising assembly lines or managing support equipment at a warehouse, today's automated IT solutions provide complete visibility and greater velocity to deliver measurable business improvement. In fact, modern enterprise solutions can provide an integrated infrastructure for real-time location, digital messaging, and wireless networking applications. Together these can give local SME manufacturers the power to continuously manage the physical status of their business's equipment and their people.

This is the case no matter how prone one's production and supply chains are to the challenges of demand variability and the realities of material availability.

Underpinning all of this is the removal of the 'Seven Deadly Sins' of lean SME manufacturing; the goal of course being to eliminate non value-added processing from the customers' perspective by enabling less inventory, less space, less resources, and less time to produce more - all highly responsive to customer demand.