Manufacturing Strategy: Lean Take 2

Lean Manufacturing is not new, so an interesting question to ask is the following: Why then, in a recent survey of more than 150 manufacturing executives, is increasing focus on Lean one of the top two strategies being deployed across manufacturing today?

{mosimage} The answer, however, may not be too hard to discern, given what has happened in manufacturing during the past 10 years. Many of the pioneers of Lean, and even some that weren’t pioneers, experienced an unprecedented expansion in production and corporate profitability during much of the 2000s. Accompanying this growth was a new focus on just that—maximizing throughput—and a slow migration away from Lean principles such as demand-driven manufacturing, waste elimination and strict controls on inventory explosion.

The situation left many manufacturers vulnerable to the collapse in demand for their goods. Even so, the immediate pain that many organizations felt for the most part subsided. Inventory levels have been reduced, waste has been cut out, head-count was eliminated, and even in industries such as automotive, many companies returned to profitability.

Now, however, demand has begun to return, production and inventory levels have begun to increase, and there is a need to not repeat the mistakes of the past. It is this need to avoid the mistakes of the past that is acting as a great motivator to reinvigorate Lean initiatives. However, this time, Lean itself has to take a different approach as well.

Lean/software disconnect

There has always been a well documented disconnect between the use of software and the use of Lean. But now is the time to change that perception in the marketplace. The software of today has little resemblance to the software of 20 years ago, and similarly, the Lean initiatives of today should not look like the Lean initiatives of 20 years ago.

One trend that Aberdeen is following in the Manufacturing Information Technology (IT) market, which may make this transition a reality, is the convergence between BPM (Business Process Management) and MOM (Manufacturing Operations Management) software. In large manufacturing organizations, Manufacturing IT is now becoming part of the domain of Corporate IT, and the ability of line-of-business and corporate IT to collaborate will be a source of competitive advantage for these firms moving forward.

It is our hypothesis that one of the main reasons this ability to collaborate will drive competitive advantage is because of how it will enable Lean practitioners to improve industrial business processes. We are currently working with several Fortune 500 manufacturers on their strategic planning for Manufacturing IT. In each of these organizations, issues around enabling technology for engineering, product development, manufacturing and quality management are top of mind. It is the goal of these strategic planners to create an architecture that will allow manufacturers to optimize new product development, enterprise quality management and demand driven manufacturing. In accomplishing this, from a process management perspective, the following capabilities are being thought of as foundational:
• Model, automate, optimize and execute industrial business processes
• Quickly update and publish industrial business processes as new best practices emerge
• Integrate industrial business process with disparate systems, people and data sources
• Automate the management of exceptions and non-conformances.

Both IT practitioners and Lean practitioners have become adept at managing business processes during the past 20 years or so. Now, the big test moving forward will be how adept they are at sharing each other’s experiences and expertise to better manage the same business processes.

Matthew Littlefield, matthew.littlefield@aberdeen.com, is Senior Research Analyst at Aberdeen Group Inc., in Boston.

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