Executive Summary
Under the ever-widening Lean umbrella, manufacturers are left grasping for what it means to be Lean, which aspects of today’s Lean initiative are delivering tangible results, and where to turn for the answers to these questions. In response to these needs, The Lean Scheduling and Execution Benchmark, based on the survey responses of over 400 manufacturing enterprises, highlights the operational performance benefits that Best-in-Class manufacturers attribute to the use of Lean scheduling and execution principles.
Best in Class Performance
The value of Lean principles and technologies is tied to the results attributed to their use. In the following analysis, Aberdeen used three KPIs to distinguish Best-in-Class. Across these metrics Bestin- Class manufacturers averaged the following performances:
- 95% On Time Delivery
- 91% Throughput
- 79% Reduction in Manufacturing Cycle Time
Competitive Maturity Assessment
Survey results show that firms enjoying Best-in-Class performance shared several common characteristics which include:
- Standardized Lean scheduling and execution best practices based on Continuous Improvement team findings.
- Autonomous Lean decision-makers enabled with actionable factory floor intelligence.
- Established Lean centers for excellence.
Required Actions
To achieve Best-in-Class performance, manufacturers must:
- Measure Throughput and Manufacturing Cycle Time at least daily.
- Measure On Time Delivery, WIP, and Scrap in real-time.
- Deliver factory floor data as actionable intelligence to Lean scheduling and execution decision-makers.
- Implement Lean Software Applications.
- Integrate Lean Software Applications with ERP and automate Lean tools.
Chapter One: Benchmarking the Best in Class Aberdeen Analysis
This benchmark study showcases the operational performance benefits manufacturers are currently enjoying due to the adoption of Lean scheduling and execution principles. In the Lean universe, two of the major tenets are “continuous improvement” and “waste removal”, which in the eyes of many Lean purists leaves no room for technology adoption. Fortunately, a new generation of manufacturing professionals has come of age and is, to a large extent, implementing Lean scheduling and execution principles with an entirely new set of technology applications.
These newer manufacturers are just as vigilant as their predecessors; with a laser focus on reducing overall manufacturing costs. However, these manufacturers focus on more than the traditional pillars of Lean or TQM by concentrating on such things as integrating enabling technologies with ERP, synchronizing demand with execution, and smoothing production schedules. Finally, this benchmark shows which enabling technologies Best-in- Class manufacturers are using to improve KPI performance and ultimately reduce operating costs. Maturity Class Framework The value of Lean principles and technologies is tied to the results derived from use. In the following analysis, Aberdeen uses three KPIs to distinguish the Best-in-Class from Industry Average and Laggard manufacturers.
- On Time Delivery
- Throughput
- Manufacturing Cycle Time Reductions
A weighted average was defined and calculated based on these three KPIs, and the market was segmented with Best-in-Class manufacturers defined as the top 20% of performers, Industry Average manufacturers defined as the middle 50%, and Industry Laggard manufacturers defined as the bottom 30% of performers.
The defined KPIs were chosen because they are standard calculations used across the manufacturing industry to measure specific aspects of scheduling or execution. Specifically, On Time Delivery measures how well demand management is connected to production execution; Throughput measures how well manufacturers are executing against schedules; and Manufacturing Cycle Time Reductions measures how well Continuous Improvement teams are improving the manufacturing process itself. When all three are considered in tandem, the overall success of Lean scheduling and execution initiatives becomes apparent.
Metrics Measured
On Time Delivery, Throughput, and Reductions in Manufacturing Cycle Times are essential to measuring success but are not allinclusive. There are many other KPIs measured by the Best-in- Class. Insights gained by examining the second tier of KPIs can be just as valuable as the above analysis; especially when the findings shown below are considered in conjunction with the frequency of measurement findings in Chapter 2.
Best in Class PACE Model
Aberdeen’s PACE framework enables Industry Average and Laggard manufacturers attempting to become Best-in-Class a structured way to understand how Best-in-Class manufacturers achieved their superior performance. Not surprisingly, among the highly competitive manufacturing markets, the number one force driving manufacturers’ focus on Lean initiatives is the pressure to reduce overall manufacturing costs.
