Using tech to support lean transformation

Learnings from manufacturers using technology to improve operational performance and change mindsets.

Whatever product your company manufactures, whether that be fast moving perishable food products or giant, long lead time capital machinery, the challenge is the same: execute all the activity that the customer values with minimum waste along the way.

This sounds simple, but anyone who does this for a living knows there’s a lot to unpack in that last statement. Quite apart from exploring and defining to our mutual satisfaction each key word such as ‘execute’, ‘activity’, ‘customer’, ‘values’, ‘minimum’ and ‘waste’ and even what we might mean by ‘along the way’, actually doing it is anything but simple.

A manufacturer will have a Target Operating Model of some kind, a ‘playbook’ of ‘this is how we do what we do’, and this will be supported by technology of one form or another; this may be very basic – pen and paper, or super sophisticated, such as automated, robotic control systems. Most often it’s a mixture, depending on which piece of the value stream is being considered.

The complexity of the value stream necessitates the development of specific solutions, in the same manner that an organisation is typically partitioned to handle specific aspects of the business: finance, sales, production and so on. ERP systems were (are) an attempt to unify all the various functions within one core system umbrella, but despite best efforts and, to be frank, false claims these can and will never satisfy all needs end to end.

The result is that even those businesses that have invested countless millions in such ‘unifying’ solutions, there will be found other ‘bolt-on’ packages that are developed or procured to handle specific tasks somewhere in the value chain.

Obvious examples include web-shops at the ‘front end’, operations data capture and reporting in the middle, and transport management apps at the other end. Whilst it would be nice to believe that such ‘bolt-ons’ only exist at the periphery of a ‘main’ system to support core process, the truth is that not only are there many such function-specific solutions in play, there also always exists an additional minefield of spreadsheets in every single part of every business, without which everything would soon grind to a halt.

If we accept that this is the playing field we are on, what is your game plan?

We put this question to a number of Senior Managers to ask how they approached the challenge. “Get your data capture right at the sharp end first”. advised one experienced COO. “Start with getting the basics right, and don’t automate what you have without challenging it first…[we] went from trying to be clever measuring and displaying OEE and a host of other things from the Toyota playbook, to only focussing upon those things that the operator can measure and impact”.

A Senior Manager from the same business agrees. “Yes, we struggled with our lean deployment in getting engagement. We assumed it was the administrative burden of data collection and reporting, or people’s understanding, so we just automated what we had and did more training. We hadn’t challenged those assumptions [which were entirely wrong]”.

In another business a lean deployment had struggled for different reasons. “We had all manner of reports telling us this and that, but somehow none of them aligned with any other and we spent hours debating what was real and what was not. By the time we thought we had answers, time had rolled on and we had a whole new set of issues to debate”. We press for more detail and context for this comment:

“Take something as simple as recorded labour hours. The basic need of an operation, to manage costs and profitability, is to have a planned number of labour hours, and to track the actual used hours against this plan. This is a fundamental, right? But even for this basic requirement we will have multiple data sources, processes and systems involved.

“There’s the T&A [time and attendance] system, the payroll system, the financial cost accounting and allocation systems, the planning and scheduling system and the underlying systems for standards and controls upon which the planning should be based, the shop floor data capture systems, and the reporting systems. It’s an administrative and systems nightmare in most companies, a drain on management time at best, a black hole at worst.

You can’t make sustained improvement in an environment where no one trusts the numbers. The obvious conclusion for this company (and the many others with similar challenges) was to explore how third parties could help.

“You have to be careful because on the one hand you get software providers who ‘don’t get’ operations, or who have a particular app they’re trying to sell you (like a T&A system, or Production Planning software), and on the other you have operations consultants who can help challenge your process but often don’t seem to bring anything other than bigger, scarier spreadsheets…and big bills.

This sentiment was echoed by several others surveyed, and some common themes emerge.

“I have 3 reports here showing me 3 different stock results for yesterday. One is from finance, one is from the system here, and one is from the Shift Manager. I need an independent to tell me who’s right and fix it.” “My company is drowning is data, but not insight” “I’ve given up asking IT for help, they’ve got a new ERP version to install”.

“Our planning is done on a spreadsheet; our reports are all spreadsheets” So when all the talk on manufacturing technology is of sexy automation and robotics, let’s consider the less glamorous reality: your $XXXM business is propped up by spreadsheets, by a few smart managers, by under-utilised operators, by piecemeal software and repeated squeezes on operational leadership to be more efficient.

Time to search out that third party.

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