High-Tech's Role in Lean

Technology isn't a panacea for plant-floor problems but it can help manufacturers take lean to the next level.

A common beginning approach to lean manufacturing is the "technology agnostic" philosophy, says Michael Burkett, vice president of research at AMR Research Inc.

"One of the principles of lean is to keep it simple," he says. "One of the things we see happening is companies start lean in a very visual way. So what they start to try to figure out is, how can we simply eliminate wasteful processes?" As a result, companies put technology purchases on the back burner.

But as lean matures within a localized area of a plant, manufacturers begin seeking ways to extend the continuous-improvement process throughout the entire operations level. That's when technology can come into play. Many plants start with basic solutions, such as electronic kanban, which allows plant employees to see when other departments need materials via an electronic signal sent to a computer terminal.

Over the years, manufacturers have become more sophisticated with their lean technology implementations, using applications with modeling and simulation, value-stream mapping, and demand planning and forecasting functionality.

More manufacturers are providing their plant-floor operators with access to information through portals that allow them to solve problems and adjust production schedules, Burkett says. Solutions provider CellFusion Inc. has developed demand-based "early-warning" portals that help manufacturers react to market fluctuations and minimize inventory levels.

For instance, if a company is introducing a new product, the early-warning portal can be integrated with enterprise resource planning systems and other shop-floor applications and measurements to provide detailed information about additional materials that may be required at assembly line supply points, says CellFusion CEO Kersten Ellerbrock. By clicking on a particular workstation in the system, plant personnel can view color-coded kanban alerts that show where a demand or engineering change may impact supply cycles.

Nearly two-thirds (63%) of top-performing manufacturers have enabled lean manufacturing practices through demand planning and forecasting systems, according to an April 2009 Aberdeen Group survey of 117 companies.

Other systems can help manufacturers design a cell or work area when new products are introduced. Manufacturing execution systems (MES) have automated production scheduling for many manufacturers, and product lifecycle management applications feature plant design functionality that can lay out work areas based on new product introductions, Burkett says.

The Aberdeen report rates MES applications as the second-most widely used system by "best-in-class" manufacturers, with 43% reporting that they use such enterprise tools. (Aberdeen identifies best-in-class manufacturers as companies that have 96% perfect order delivery, 3% decrease in inventory carrying costs, 2% decrease in inventory write-off, 4% decrease in customer lead times and 4% decrease in manufacturing cycle time.)

The report's authors, Nari Viswanathan and Matthew Littlefield, say lean technology can no longer be avoided by manufacturers that are trying to optimize their continuous-improvement programs.

"Pure lean principles need to be looked at in tandem with industry-leading best practices in supply chain, such as intelligent inventory management, response management and demand management, in order to create the ideal lean plant," Viswanathan and Littlefield conclude. "Also, the approach of avoiding software is no longer realistic in today's environment due to the simple fact that there are too many constraints, which cannot be handled manually with ad hoc tools."

Enterprise Applications Enabling Lean

The Aberdeen Group surveyed 117 companies in its April report entitled "Lean Manufacturing: Five Tips for Reducing Waste in the Supply Chain" and asked them questions about their lean manufacturing practices. Companies were broken down into best-in-class (top 20%), industry average (middle 50%) and laggard (bottom 30%). When measuring the use of lean-enabling technologies, the top-performing manufacturers cite demand planning and forecasting, manufacturing execution systems and advanced planning and scheduling systems as the top three solutions they're utilizing on the plant floor.

Best-in-Class

Average

Laggard

Demand Planning and Forecasting

63%

54%

37%

Manufacturing Execution System

43%

41%

18%

Advanced Planning and Scheduling

42%

29%

12%

Supply Chain Visibility (including Event Management)

33%

30%

3%

Enterprise Manufacturing Intelligence

25%

21%

6%


Source: Aberdeen Group

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