A lean approach to management

Posted on 29 Sep 2014 by The Manufacturer

Tuan Nguyen, senior manager of DELMIA Global Enterprise Manufacturing Intelligence at Dassault Systèmes, talks about how manufacturers can take a more lean approach to management.

Tuan Nguyen
Tuan Nguyen, senior manager of DELMIA Global Enterprise Manufacturing Intelligence at Dassault Systèmes

Manufacturing enterprises have invested heavily in Lean practices for many years, wringing the inefficiencies out of every operation in the production process. Supply chains have been tightened, inventories reduced or virtually eliminated with just-in-time processing, and production operations at every stage streamlined and optimised.

But there is one area in the Lean revolution that often is not considered—not because it doesn’t matter, but because it has been so difficult to deliver a solution. That neglected area? The management decision-making process.

Consider a global manufacturer that has practiced continuous improvement for a decade. Products roll off the assembly line with precision. The Quality team is on top of production worldwide, so yields are consistently high. Warehouses operate at top efficiency. And then one day, a supplier problem develops. A key component, let’s say, begins trending out of spec.

What does the company do? That depends on the managers who have responsibility. How quickly can they identify the problem? What actions do they take? How soon can they correct the problem, and how accurately?

Applying a Lean Approach to Management

All of these things depend on information getting to that decision-maker in a timely way. And this is where Lean systems can fall down. Global manufacturers have complex supply chains and multiple plants that often capture data in different ways and report in different formats. That data has to be gathered, transformed, cleaned, stored and analysed, and then delivered to each person in the enterprise who needs it, in a form appropriate for their role.

The plant manager may spot a problem quickly, based on local data. But what if it’s a regional problem that is only apparent when looking at aggregated data? Then it will take longer, perhaps a good deal longer. There are companies that are happy if they get aggregated global manufacturing reports on a weekly basis. But a lot can happen in a week. Faulty products can ship. Quality can get bogged down with testing. Warehouses can accumulate parts waiting for a management decision.

A New Use Case for Enterprise Manufacturing Intelligence

This is why some enterprises are now implementing a new generation of manufacturing intelligence systems that provide global management reporting and analysis in close to real-time. This approach requires more than a graphical front-end that simply “dresses up” disparate or incomplete data. It requires real-time information gathering from all the plant floors, the ability to clean and aggregate the data from multiple sources, and the means to deliver that data up the corporate chain “as it happens”— all the way to the corner office if needed.

Such a system is not trivial to implement, and IT may grumble about yet another information project that will stretch its already thin resources. But there are solutions on the market that are relatively easy to deploy, and the investment is small compared to the efforts already expended on global Lean initiatives.

Besides, without a manufacturing intelligence system, Lean organisations are only Lean when nothing unexpected happens. And, as every manufacturing enterprise knows, that is almost never the case! One unexpected event can undo months of savings and efficiencies.

For enterprises that are serious about continuous improvement, it would seem that manufacturing intelligence for managers is a necessary step. For my next post, I’ll explore this idea further—to continuously improving management performance itself.