Lean manufacturing relies on a steady stream of data analysis to make sure a manufacturer remains profitable. Continuous improvement is one way to accomplish that goal, but companies must learn to figure out how to keep improving their processes while still making money. Pat Lancaster, CEO of Lantech, learned his lesson all too well.
Lantech turned to lean manufacturing in 1994, and the company improved its processes and financial standing. By the early 2000s, it started to lose income despite showing it was saving money on a daily basis. Lancaster brought in experts to help remedy the problem, and he found out the difficulty was in how the company managed its workers. That's when Lancaster moved to a continuous improvement model that turned Lantech around and made it profitable again.
Standardizing the Work
Lean manufacturing relies on putting the right talent in the right place with the right process. It lets people do their jobs to the best of their abilities so they stay engaged with their work. Management established standard work at Lantech, and then it was the goal of supervisors to improve and maintain that work as much as possible. As soon as something needed a correction, teams took action to fix the problem. Standard work involved entry-level workers on the floor, management and even Lancaster himself. It was a company-wide decision, and it paid off in droves.
The key to standardizing work in Lantech's model of lean manufacturing is constant communication. Daily meetings happen every morning to pinpoint problems in any work situation. Teams reach out for assistance to fix anything that's a priority, and a visual white board tracks key metrics for the day for everyone to see.
The End Result
Rather than track quality of work, Lancaster tracked run rates over a 90-day period as the focal key performance indicator, or KPI. Run rates measure a company's financial performance as a predictor of future success. An improving run rate means the company is working efficiently while making money with lean manufacturing. Run rates also show how a company is actually performing, not just how management perceives it is performing.
Lancaster found out he didn't have all of the answers for Lantech. The beauty of continual improvement is that answers can come from any staffer at any time, which is why the company holds daily meetings to assess quality control and work processes. Meetings give employees ownership and pride over their own work, and tell everyone what has to happen to make money.
Lancaster noted that the unexpected challenges of lean principles became the silent enemy of his overall plan. Rooting out this enemy meant talking, communicating and solving problems as they arose rather than not listening and becoming complacent.
Lean manufacturing is a great cause when it works properly. Fixing issues quickly and efficiently is just as important as steady supply chains, great logistics, quality products and steady customers. Don't forget to include a culture of continuous feedback if you intend for your lean operation to work well.
Photo courtesy of Geerati at FreeDigitalPhotos.net
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