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Lean Manufacturing for the Small Business

January 18, 2018 by Susan Brooks

Lean Manufacturing for the Small Business

 

We have Toyota to thank for the concept of lean manufacturing – it’s all about doing away with waste and focusing on efficiency. The idea is to cut stock levels to an optimum amount. Although Toyota can be credited with developing this anti-waste concept it’s not just for the big boys. Small companies can share in the notion too. Lean manufacturing principles can be implemented in any company, large or small.

A way to explain lean in its simplest form is to imagine a mechanic running his car repair company. He has a basic stock of parts but doesn’t order more specialised or expensive items until a job comes in that requires them. He only procures the stock he needs when the job is live. This is a very basic level of lean but it illustrates the principles – if the mechanic were to order 10 of the specialised part “just in case” they could be sitting in his workshop for months before another car comes in and needs one. If each specialised part cost £100 that’s £900 left sitting idle. That money would be better spent on making improvements to the workshop or purchasing parts that are needed, not parts that might be needed.

To introduce lean manufacturing, you need to get a handle on your stock (inventory) this is not just about finished parts that are sitting ready to go. If you produce or create a product it’s also about work in progress (WIP) and raw materials that are sitting around waiting to be used. Many companies order too much from their supplier and this not only takes valuable money (working capital), but also valuable space in the warehouse. This can lead to overcrowding and cause additional work as fork-lift truck drivers battle to keep the aisles and floors free in line with your health and safety policy.

For real integrated logistics solutions, you need to reduce the inventory in all areas – raw materials, WIP and finished stock. Get material in, get it through the process and get it out.  It’s about getting the right parts through when they are needed. It’s not easy and it may take a while to get to grips with the whole “lean” process. There are few things you can so that will assist you. You could look at implementing manufacturing software, if you don’t already have this it’s something you should invest in if you’re serious about lean manufacturing.

You can also explore reducing the batch sizes you produce. This will prevent you having to order in large quantities of raw material and won’t leave you with a pile of finished goods sitting in your warehouse for an inordinate amount of time. You need to get into the habit of only producing parts when they are required, you are effectively forming a queue rather than panic producing. Again, it might be tricky at the start, but it’s worth doing!

The main point is to work hard at refining your business and its logistics solutions. Continuous improvement is essential and regular review of stock levels should give you some idea of how you are developing in terms of “going lean.”