The Benefits of Lean IT in Manufacturing

The Benefits of Lean IT in Manufacturing

Applying lean to IT can mean better performance, less stress and significant cost savings.

A conversation with Ryan King is peppered with terms like kanban, kaizen, process improvement and cycle count. Not unusual for a plant manager, but King is director of information technology at ARPAC, a packaging machinery manufacturer based in Schiller Park, Ill. And like his counterparts on the shop floor, King is intent on using lean concepts to improve ARPAC's performance.

King views lean IT as a way to "use technology to improve processes and eliminate waste from those processes." In many cases, that means finding areas where human error can be eliminated or where people can be removed from a process entirely. He says IT costs are too high to view IT as a sort of maintenance function that changes batteries out of a mouse. Instead, he says, IT needs to be focused on making processes simpler, more consistent and less expensive.

Reduce waste by removing nonvalue-added activities such as excessive reviews and authorizations, establishing standard work practices and helping to ensure a manageable work level.
When ARPAC implemented an Epicor ERP system in 2007, King used it as an opportunity to automate routine practices and remove time-consuming paperwork processes. For example, employees can simply scan a barcode to generate a purchase order and replenish needed parts, which are then typically delivered in a day or two. "It has saved us an average of 20 hours per week on our master schedule for manufacture," King notes. "And for our purchasing buyers, it eliminates a day of their week from worrying about stocked kanban parts."

Using the ARPAC vendor inventory system (AVIS), when ARPAC's inventory level drops, an email alert is sent to the vendor who can log onto the AVIS site and see what part is needed. The system provides a purchase order with the part type, quantity and a contractually agreed-upon price. A packing slip with a barcode is automatically generated. When the parts are delivered, an ARPAC employee scans the barcode to enter the parts into the company's system.

Fixing Broken Processes

IT is often the last area in a manufacturing company to implement lean methodology, says Mike Orzen, a consultant with Lean Enterprise Institute and coauthor of "Lean IT, Enabling and Sustaining Your Lean Transformation." One reason for that, he says, is that IT environments often are so stressful and behind schedule that managers are reluctant to "take our people away from daily work to improve the way we do work." Instead, he says, IT organizations can best be described as a "collection of broken processes held together by heroic efforts."

Orzen says lean IT can benefit companies by introducing basic lean principles:

  • Develop a flow of work where delivery of services matches the pace that customers want to consume it.
  • Reduce waste by removing nonvalue-added activities such as excessive reviews and authorizations, establishing standard work practices and helping to ensure a manageable work level.
  • Introduce a problem-solving approach to IT work based on Plan-Do-Check-Act. Orzen says IT departments are focused on implementation, which can imply that "we know the solutions." PDCA instills a "trial and discovery" mentality that determines success with a process or project by whether the evidence bears out its success or calls for further changes.
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