Change the name of lean. It scares people.” I must admit I was startled to hear this comment made by a manufacturing leader at a recent business meeting. A group of us had gotten together to discuss critical challenges faced by the industry and share ideas on how to address them.
The gentleman who made the comment was describing his difficulty in “selling” lean manufacturing to his associates. He also described a perception that lean is over-hyped and the gains companies can make have all but been exhausted.
To be sure, there are many local companies who have made excellent progress in improving their competitive position by implementing some of the more well-known lean manufacturing methods. In a world where price is dictated by customers, progressive manufacturers are recognizing that one way to increase margins is to operate as efficiently as possible. However, despite the proven return on investment lean yields (as much as 10 to 1 on IMEC projects), an estimated 70 percent of the potential benefits of lean implementation remain unrealized.
So, why is the perception by some that we’ve done all we can to improve? I believe it may be due in part to the growth in manufacturing over the last few years. The industrial sector, while still shedding lower-paying jobs, has seen resurgence. Many manufacturers are bursting at the seams, trying to fulfill customer orders and meet aggressive schedules and product launches. And yet this increase in activity reveals one of the inherent, yet often misunderstood benefits of continuous improvement: the ability to increase flexibility and capacity. For Caterpillar suppliers in particular, the more agile you are, the more likely you are to become a long-term supplier and partner.
It also seems that perhaps the term lean has indeed become stigmatized as a tool that can be deployed once. The comments I heard at the meeting underscore one of the biggest challenges we face at IMEC: convincing companies that lean is a journey that must be practiced each day. Without leadership and commitment, it is simply not sustainable. Companies who develop and implement a comprehensive lean deployment strategy realize greater benefits than those who merely view lean as a flavor of the month.
As evidenced by past struggles we’ve faced in the Peoria area, now is not the time for the manufacturing sector to become complacent. When times are “good,” invest in updating your business practices, benchmark against other successful manufacturers and do what you can to keep a competitive edge. Plan for a future where business won’t be as robust.
Toyota Motor Corporation, internationally recognized as the benchmark for continuous improvement practices and now the second leading automobile manufacturer in the world, estimates that even after several decades of practicing lean, up 90 percent of its production processes still qualify as waste. If that isn’t evidence that there’s more we can do to create a competitive future for the Peoria manufacturing sector I don’t know what is. IBI