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An increasing number of manufacturers are implementing lean initiatives to create competitive advantage. Such initiatives can help manufacturers achieve on-time delivery, operational excellence, and continuous improvement as well as shorten order cycles, reduce costs, and increase revenue. However, despite the obvious benefits, many manufacturers of complex equipment have not yet begun or are only just beginning lean initiatives and programs.
This white paper is for those complex equipment manufacturers new to lean strategies, practices, and techniques, or for manufacturers who feel they are not fully achieving their lean goals. It explores the lean areas of focus in play by complex equipment manufacturers determined to differentiate themselves from the competition. The intent of the paper is to help you set the right overall lean direction for your company.
As more manufacturers take lean seriously and the industry swing to lean continues, you cannot stand still. The first question to answer in deciding your company’s lean direction is this: can your company afford not to go lean?
Answering that question can be a difficult process and the first of many obstacles to successful lean-manufacturing initiatives. What are the other obstacles to watch out for on the road to lean? This white paper identifies the common barriers to adopting and executing a lean strategy. For example, some companies take a shortsighted view of lean, engaging in sporadic lean projects and fixes with no long-term lean strategy to follow. Others have difficulty gaining executive sponsorship or commitment, leading to compromised lean results. Managing cultural change and engaging employee participation are also challenges, but the ultimate goal is to move beyond lean methodology into practical, actionable control.
However, before a manufacturer can reach that goal, it first needs to master the basics of lean. It can then execute its lean strategy and take specific actions to ensure its success. This white paper outlines some of these key actions. Such actions cannot substitute, however, for the need to partner with a solution provider that has extensive experience in lean manufacturing. Such a partner can provide the enabling technology to give you actionable control over your lean-manufacturing processes. For this purpose, SAP® software from the SAP for Industrial Machinery & Components solution portfolio can help manufacturers of complex products and equipment on their lean journey. This software offers full solution coverage of all the processes needed to support lean manufacturing in your organization.
As customer demand increases, complex product and equipment manufacturers continue to improve operational performance by adopting lean practices and strategies. Impressive strides are being made, such as increased growth with no increase in workforce and reduced work in process to speed time to market. A March 2 006 AberdeenGroup report1 focuses on these strides. The report includes a survey of manufacturing companies that reveals those companies taking a best-in-class approach to lean deployment are already reaping benefits from lean initiatives. A number of competitive threats drive companies to these initiatives, leading with on-time delivery. The report says 75% of manufacturers surveyed ranked meeting customer delivery dates as a key competitive differentiator. Many of these companies are already able to correlate their current success directly to their lean strategy.
For some manufacturers whose expected delivery times have dropped dramatically – from weeks to just days or hours – lean manufacturing is emerging as a requirement of doing business. These manufacturers rank the need to improve operational performance – that is, reduce costs and increase revenue – as their top driver for adopting a lean strategy.
Another important lean driver for manufacturers is customerdriven demand for a shorter order cycle. To meet this demand, a finished goods manufacturer, for example, may start a just-intime lean initiative requiring process redesign, consolidated supply-chain information, and the implementation of advanced planning and optimization software.
Finally, competitive advantage in price and service is fueling lean initiatives for manufacturers. As lean manufacturing becomes more commonplace in the industry, some manufacturers caught in the price and service squeeze find themselves at a disadvantage by not implementing lean operations, especially where lean processes can lead to double and triple gains in workforce productivity.
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