Applying Lean Principles to Optimize the Manufacturer’s Back Office
Last Updated Thursday, June 15, 2017
Lean manufacturing is about doing more for less by eliminating redundancy. Lean manufacturers put their resources where they need them – and not where they don’t. In the twentieth century, Toyota became the first company to implement lean manufacturing principles.
In this blog, we’re giving you the framework you need to apply lean principles to optimize your back office.
The five key lean principles are:
1. Specify value
Define value from the customer’s perspective. What do they want? How will your product be of use to them?
2. Map the value stream
Work out your process for creating value for the customer, from beginning to end. What steps go toward creating your product?
3. Create flow
Flow is about having a system where materials and other elements move smoothly through as required. There are no delays or interruptions. All steps should add value.
4. Respond to pull
In order to see your process in action, you need the “pull” of customer demand at the end. Provide what people want – but no more than that.
5. Seek perfection
Aim to eliminate waste entirely, making continuous improvements.
The seven types of waste
The aim of applying lean manufacturing principles is to eliminate waste. This can be broken down into seven different types, summed up by the acronym TIMWOOD. These are:
Transport (unnecessary movement of materials, parts or information between process steps).
Inventory (holding more materials or information than you need).
Motion (of people or equipment within a process step).
Wait time (between process steps or shifts).
Over-production (making too much of a product, or making it before it’s needed).
Over-processing (adding more value than customers will pay for).
Defects (this includes any aspect of a product that doesn’t address a need).
Lean manufacturing: kanban and “just in time”
A key lean manufacturing idea is “just in time” – matching production to demand as closely as possible. Toyota developed a system called kanban which helps to deliver this. When a product is consumed, this sends a demand signal upwards through the different steps in the manufacturing process, stimulating more production. In turn, stock is then replenished as required.
The role of the back office in implementing lean manufacturing
Applying lean manufacturing principles isn’t just about the factory floor. It also means assessing complex systems closely and changing them often. This can be a real challenge in modern manufacturing, where global organizations have often grown quickly through mergers and acquisitions. But smart back-office systems can help you apply lean principles throughout your business. Here are some areas where you can optimize your processes:
Resource planning and inventory management – Paper documents and multiple IT systems can slow down processes and cause errors. There may be several data entry points or several versions of documents. Key information might be on shipping labels or purchase orders. But with the right systems, you’ll always be on top of how many parts have been used or products shipped. You’ll no longer have to stop a process while waiting to find something out
Safety – It’s important to keep policy and procedures up to date with the latest regulations. But keeping track of everything can be tricky. That’s where solutions that optimize and pull together the data in your backend systems can help .With the right infrastructure, you’ll also be able to automate the way your policies are distributed, reviewed and agreed on. The end result is that your policies and procedures will be easier to manage and audit.
Support services – A lean back office can streamline HR and accounting processes, making tasks like assessing job applications or paying employees much simpler. With improved efficiency and compliancy, you’ll be able to focus on the bigger picture.
Boost your business with a lean back office
Complex processes and impenetrable workflows can really cost your business. But it’s possible to improve quality and efficiency by bringing things together. Alongside the areas above, a lean back office can help with quality control, customer support, sales and marketing.
You may decide to optimize individual processes, combine different legacy systems, or even implement lean practices from end to end. What’s certain is that at a time of change and uncertainty, the right solutions can set you apart from your competitors by making your operations smarter and more flexible.