What is in this article?:
- Viewpoint: Manufacturing: Offshore Out; Lean In
- Process to Productivity to Profits
Don't be fooled. All too often, pressure to protect the bottom line coupled with tales of low wages, low overhead, and less restrictive regulation cause manufacturers to jump ship and move overseas. But offshoring isn't a panacea. In fact, what might appear to be the most cost effective solution on paper can often lead to an expensive disaster in reality.
A rush to offshore in an attempt to achieve rapid cost reduction for production activities by simply "plugging in" new low-cost labor in place of seasoned production workers brings with it significant challenges and unforeseen costs. Furthermore the ever-increasing production wages in historically low-wage countries makes the option even less attractive. Couple this with it the risks of repeating (or worsening) bad production behaviors from the existing operations and you've formulated a recipe for disaster. This recipe often results in more expensive operating costs than the firm experienced prior to offshoring.
There is another option. When companies opt to implement lean manufacturing techniques correctly they achieve necessary cost improvements, optimize productivity, develop corporate community relations all while maintaining operational control that only on-shore, in-sourced production offers.
Before any company considers offshoring their manufacturing operations they should have experienced stringent lean methodologies. This goes beyond installation of colorful posters in the facility and teaching staff to use key buzzwords like "kaizen" and "muda." To truly embrace the power of lean, executives and their staff must develop exceptional process knowledge, process discipline, and a burning passion for continuous improvement. Likely the single biggest benefit of lean implementation is the deep knowledge of processes that is obtained within the organization.
Step by Step
In almost all cases, the first step to lean implementation is process mapping (followed in quick succession by value stream mapping). The activity of mapping the processes within the organization and communication of these maps for validation by the entire organization makes everyone within the firm more knowledgeable of how things are done within the firm.
Often, senior executives have become so removed from the day-to-day tactical actions of their employees, they fail to see time wasting barriers and bureaucracy that their staff face in trying to implement strategic initiatives. By sharing the value-stream maps throughout the organization during lean implementation, all levels of the organization become aware of non-value adding activities that staff members may carry out daily.