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The Lean Benchmark Report

For instance, by implementing Lean, Husqvarna Turf Care was able to dramatically im- prove its operational performance. This division of Electrolux simultaneously doubled its on-time shipping performance for its spare parts business from 45%-50% to 95%-99% as it reduced WIP by 50% and floor space requirements. See the Lean Best Practices: The Momentum Builds for the entire case study.

Competitive advantage in price and service was cited by 45% of respondents among their top three Lean drivers. However, since Lean is prevalent in many industries, today the question of competitive advantage is more about being at a disadvantage if companies are not operating a Lean operation. The companies that supply ThermoFab with raw materi- als help to crystallize this issue. A leader in forming high-quality plastic enclosures, a few years ago the company implemented Lean manufacturing using EasyLean (Infor); within a few months, the company was able deliver product on-time to its customers for the very first time. However, as ThermoFab continued to rollout Lean, it soon discovered that very few of the 80 vendors that served the company were able to respond to its just- in-time, Lean supplier initiative. Since that time, ThermoFab has upgraded the criteria that it uses for supplier selection to include the ability to collaborate and respond to its just-in-time requirements. As a result, the company has dramatically improved customer satisfaction while at the same time dramatically reducing the number of suppliers.

The third most important driver cited by 44% of respondents, customers demanding shorter order cycle times, is particularly common for those companies whose products ultimately serve the consumer. Leupold & Stevens exemplifies this challenge. A leading provider of precision rifle scopes, the company recently expanded its traditional customer base beyond specialty rifle distributors to include large retailers. It was immediately faced with the challenge of meeting reduced customer order delivery times of three days versus the traditional four weeks that distributors were satisfied with. To meet this re- quirement Leupold & Stevens revamped its manufacturing processes so that it could as- semble-to-order, or postpone the final coating processes, until the customer order was received.

Although product quality was reported as the seventh most important driver of Lean, Ab- erdeen is of the opinion that it should be placed higher on the priority list. Each industry is placing higher standards on product quality; for example in the automotive industry Delphi quality standards include FTQ (first time quality), ISO/TS16949 certification, zero disruptions, flawless launch (on-time delivery and zero problem cases), executive leadership on the plant floor, and proactive responses to problem cases (initial response, final response, “5 why” analysis, proactive containment, and continuous follow-up.)

The Best-in-Class Tackle Lean: Strategic Actions

Companies that are ultimately most successful with their Lean initiatives begin the proc- ess with a “blue sky” attitude unencumbered by current constraints. Cross-functional teams start with a white board (either physical or virtual) and collaboratively define and design their ideal “to be” processes beginning with the customer and moving back through production to the supplier.

Reducing non value-added manufacturing and supply chain costs was recognized by 66% of the respondents in Figure 4 as one of the most important strategic action relative to pursuing Lean. Value Stream Mapping (VSM) is the technique of choice for accom- plishing this goal. VSM has evolved over time from leveraging simplistic flow charting

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