Manufacturers look to leanness as path to profitability

2013-09-26T14:30:00Z 2013-09-26T16:48:15Z Manufacturers look to leanness as path to profitabilityJoseph S. Pete, (219) 933-3316
September 26, 2013 2:30 pm  • 

OAK FOREST | A growing number of manufacturers have been pursuing lean initiatives, and they need to know leanness means more than cost-cutting, a consultant said.

A lean strategy is more about shedding needless steps that do not add value or increase profit, said Steve Barnhart, an innovation and growth specialist with the Illinois Manufacturing Excellence Center.

Barnhart presented a workshop on leadership in lean manufacturing during a Calumet Area Industrial Commission breakfast at the South Suburban College center in Oak Forest on Thursday. Barnhart, who's worked for multinational conglomerate 3M and as a consultant, told local business leaders lean processes could benefit their companies, whether they work in manufacturing or other sectors.

Japanese companies first adopted lean strategies, which spread to the United States in the 1980s and have since become widespread.

"It went through its adolescence and matured in Japan," Barnhart said. "Toyota is supposed to be king of the lean environment. Most people, including all the mid-market leaders, have dabbled in lean by now."

Lean manufacturers differ greatly from traditional factories, which have more complex operations, excess inventory and longer lead times, Barnhart said. Traditional factories tend to be forecast-driven and produce goods in large batches.

Companies that take the lean route have simpler, less cluttered processes that have a lot of visual cues to help workers avoid mistakes. They have shorter lead times, produce smaller batches as needed and are driven by demand instead of forecasts that guess what customers want. Lean businesses do not stockpile any unneeded inventory.

"There are two kinds of activity within an organization," Barnhart said. "One type adds value to your product or service, and is something your customer is willing to pay for. The other type is other activities and stuff you do that your customer is not willing to pay you for. If you move around products 10 times in your warehouse, you pay for all that activity but it does not add to the value of your product. A lean business eliminates the non-value added activity."

Lean strategies should involve redeploying workers to more productive roles instead of cutting them, Barnhart said.

Workers know better than anyone where to find efficiencies on the production floor, he said. They also must buy into the lean philosophy for it to really take hold and be effective.

If workers were to suggest ways a company could be more efficient and management responded by cutting jobs, they would be reluctant to help make the business any more productive in the future, Barnhart said. The goal of streamlining should be growth that benefits everyone, he said.

Workers can contribute valuable ideas that would make their companies run more efficiently, said Ted Stalnos, president of the Calumet Area Industrial Commission.

"When I was an hourly steelworker guy, I had an idea about how to reduce scrap and increase yield in the mill where I was working," he said. "I was told, 'we pay you to work, not to think.' Years later, I hired that guy."



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