If you want results in manufacturing the current English trend is to go ‘Lean’. However this concept of ‘Lean’ manufacturing has been around since the 1960’s if not earlier. During this time post-WW2 Japan was rebuilding its manufacturing infrastructure and trying get rid of its reputation for low-quality products. American experts were sent to Japan to help the automotive manufacturers improve quality. Companies like Toyota and Yamaha embraced this quality driven Lean manufacturing style. From there, the Japanese made Lean manufacturing their own with unsurpassed levels of quality and manufacturing efficiency. Soon Europe began to implement its own style of lean manufacture. Nissan, Toyota, and Honda brought Lean manufacturing principles to the UK during the 90’s. Now these UK plants are leading the way in manufacturing innovation and efficiency.

Day 7 and 8 of the NPD course were delivered by Colin Allaway from London Manufacturing Advisory Service. He has worked in manufacturing for the past 37 years, for a wide range of companies from plastic caps to aerospace, so he soon had us up to speed on the KISS (keep it simple stupid) principles that lean manufacture is based around.

Day 7

How do we compete on price with China? Beat ‘em or Join ‘em?
The ‘China’ subject came up early on in the discussion - with China being able to get such a low unit price why not just go there and reap the profits? That maybe an option for established brands in China, but it is a different story for a small manufacturer when you look at the total cost rather than just unit cost. Things like lead-time, shipping costs, batch sizes, exchange rates, and even payment of goods can cripple a small company if not drive them out of business. Colin added that most companies working with Chinese manufacturers fold due to their cash-flow being tied up in stock before their goods have even arrived on UK soil. This doesn’t mean to say “stay away from China”, more advising you to do your sums first and don’t leave anything out of the equation or you might be unpleasantly surprised. On the other hand, UK based manufacturing maybe more cost effective than you may have first thought. Short lead times, easier communication, less transport cost, and smaller batch sizes all reduce costs in the overall picture.

How efficiently are you working? 80% 70%…… try 5%?
When producing a product only about 5% of the time is spent adding value - value being defined as things that the customer expects and pays for e.g. cutting, packaging, material, etc. — the rest is non-value added time. Non valued added time is necessary to the development of a product but often is full of wasteful processes. The object of lean manufacture is not to try eke the last little percent out of the 5% of the processes where you are adding value, it focuses on the 95% where you are not. It is basic maths a 10% gain in productivity is either worth 9.5% or 0.5% to the overall process.

The waste streams can be broken down into 8 categories, these included transport, overstocking, and defects. Reducing any of these waste streams can give you some quite hefty gains from some simple thinking. For example reorganising your manufacturing line so you cut down the distance products travel between stations could save you kilometers and hours a year. It sounds simple because the basics of Lean manufacture is plain common sense with a bit of ‘thinking outside the square’.

Colin then took us through “5S” which is the philosophy behind Lean thinking. These five steps don’t only have to apply to manufacture but can optimise every part of development and production. Translated from Japanese into sort, set, shine, standardise, and stick. Using these five steps you can organise and reshape any process or environment into effective solution.

• Sort - eliminates distractions that don’t need to be there
• Set - organises elements to become more focused to puprose
• Shine - creates a environment to be proud of and encourages productivity
• Standardise - develop processes into standard and repeatable solutions
• Stick - allows you to continue to use the previous steps productively

Traditionally UK manufacturing gets the first three sort, set, and shine right. European manufacturers get standardise as well as the first three and the Japanese get all five. This allows the some companies like Toyota to run at around 100 defects per million parts, where as traditional UK manufacturing generally runs at about a 15% defect rate, that is around 100,000 ppm. Those defects hit a businesses profit directly even if they are caught early in the supply chain and those costs keeping increasing ten-fold for every process step they slip through.

That was day one, pretty eventfully and interesting. The next day we got to play with Lego — stay tuned.