Prof Richard Keegan outlines the principles behind Lean manufacturing, examines the results that can be achieved by adopting Lean philosophy and stresses that it is an ongoing journey and not a once-off exercise
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Dr Richard Keegan is set to speak at ‘Taking Lean to the Next Level’, an Engineers Ireland/Enterprise Ireland seminar on Tuesday, 29 April at 22 Clyde Road. Lean experts – such as Ella Bennett, Fujitsu HR director (UK and Ireland) and Denis Hayes, MD, Industry Research and Development Group – will help you understand how to grow your business, from mapping value streams to approaching workplace innovation. Early-bird offer expires 11 April. Book online for further 10% discount. Click here for more details.

Author: Prof Richard Keegan FIEI, manager – competitiveness department, Enterprise Ireland 

If we are to take on the global giants and be successful, it is very unlikely that we will launch a frontal assault on their businesses. It is more likely that we will look at the market, understand the needs of customers and find ways that we can support their needs by being more responsive, agile and competitive than the global giants.

We certainly need to be competitive if we want to secure our places in the global marketplace. Ireland, as a small island country, faces many challenges in today’s global market environment. We are good at what we do, in what we produce and in how we work with and serve customers. But, our exporters are facing major challenges when facing major global competitors. We can and need to be agile and responsive in how we work.

MANUFACTURING CAPABILITIES

Ireland is currently engaged in a major national effort to make a step change in our manufacturing capabilities and performance through the widespread adoption and development of Lean tools and techniques, combined with leadership at all levels of business to collectively improve our competitiveness.

Part of this national step-change relates to productivity, but it also relates to having real facts on the elves of competition required by the marketplace, and benchmarking provides an insight into just what is required to compete globally. The importance of sustainable environmental practice is, and will continue to be, at the core of business differentiation in the global market.

Lean tools and techniques are helping companies across the globe to address competitiveness issues within their businesses, building the capability of their people to identify issues and improve their operations. Lean is shorthand for focusing on effectiveness and efficiency across all areas of a business. Lean works most effectively where it has become the ‘way of doing business’, where it is a fundamental part of the business strategy and not just ‘using some tools’.

Lean was defined in America, based on what was being done in the Toyota Production System. The Americans were trying to understand what the Japanese were doing that made them so competitive. America tried to identify the trick, the magic wand that allowed the Japanese to produce and sell products at high quality and at reasonable prices.

The truth of the matter is that Lean is based on an absolutely focused and relentless pursuit of efficiency and effectiveness. Successful Lean implementation requires the engagement of people to realise the potential of a business.

Enterprise Ireland produces a booklet that provides the basics of Lean to help you on your journey to achieve world-class levels of competitiveness. It outlines the first steps along the Lean journey and signposts you to the next parts of that journey.

WHAT IS LEAN?

Lean is about being effective and efficient. It is about doing what is right and doing it as well as can be done. It starts from the point of knowing what a customer wants, values and needs and works to find the best way to deliver that to them. Lean is focused on providing customers with the best products at the best prices, at the best quality levels and at the best delivery times. Lean needs to be integrated into the strategy of a company if it is to deliver the true results from a Lean effort.

Lean started in the manufacturing area and has spread right along the value chain from sales through logistics, manufacturing, purchasing, administration, product design and development and back to sales. This holistic approach is becoming known as ‘Lean Business’.

Companies need to understand where they are, who they are, what their customers value, what problems their customers have, what problems the company has and what they need to do to improve to better meet their customers, needs, wants and expectations while making and retaining profit.

Lean does this by focusing on finding and removing waste. Nobody wants to do wasteful things, or spend their day doing no-value work. The Lean approach provides people with the tools to help them and their companies to find hidden wastes and to tackle them. Toyota is known as the ‘father of Lean’. On a recent visit to one of their factories, located in Wales, the deputy managing director of the plant stated that Toyota benchmarked itself constantly, always looking to examine the standards of competitors and how well it compares against them.

Enterprise Ireland can provide clients with access to the best SME benchmarking systems and data in the world through our Company Health Check Service, providing clients with an objective view of just how good the competition is and where their own strengths and weaknesses lie, helping them to prioritise areas for action to improve competitiveness.

Becoming Lean is about becoming competitive. Becoming competitive can often mean that a business can grow its sales with the same number of staff, and this is why the Lean Business approach includes the areas of sales, design, support and administration, to help the business grow. Sometimes there may be the need to reduce staff to ensure that the business can survive; there may be some people who will relish the opportunity of moving on to other challenges. The objective of Lean is to build sustainable competitive businesses, not to cut job numbers.

THE JOURNEY OF LEAN

Figure 1: The Lean Spiral of Performance (click to enlarge)

As an organisation moves up the spiral, it builds the capability to address ever more important and demanding issues and challenges. It moves to be truly world class and able to compete on the highest and harder playing fields.

Enterprise Ireland launched a Lean Business Offer in 2010, following a pilot in 2009. The Lean Business Offer provides support at three progressive levels, ‘Start’, ‘Plus’ and ‘Transform’. Lean Start projects provide a simple entry to outstanding and using lean tools techniques. Lean Plus projects help companies develop their understanding while Lean Transform projects are for companies who want to make serious developments in their capabilities, by building their people’s skills and abilities, to be able to compete at global levels of competition.

Since the launch in 2010, over 550 projects have been supported in companies across all sectors with our clients. We have seen an average improvement of over €50,000 for companies engaging in Lean Start projects, savings of over €150,000 on average from Lean Plus projects and hundreds of thousands of savings from those involved in Lean transform projects.

It is clear from the results being achieved by Irish companies, operating in Ireland with Irish people, that Lean works and can help Irish companies compete against the global giants. Enterprise Ireland also provides a benchmarking service to clients to let them see how they compare against competitors in the sector, internationally.

Enterprise Ireland has also launched a Green Start and Green Plus offer to help Irish companies to develop their green credentials to drive their international competitiveness. Information on Enterprise Ireland’s supports for business are available on www.enterprise-ireland.com.

Prof Richard Keegan is a specialist in the areas of Lean/world-class business and benchmarking with Enterprise Ireland. He advises major companies in Europe. He is an adjunct assistant professor in the Business School at Trinity College Dublin, lecturing to MBA on Operations Strategy and undergraduate level on Operations Management. Working with Toyota, he has led best practice missions for over 1,000 managers to the Deeside plant, as well as leading a mission by An Taoiseach to Toyota Japan. His concept of integrating, benchmarking and Lean/best practice concepts has been adopted by the United Nations Industrial Development Organisation as a means of helping sub-Saharan African and companies in the developing world to improve their operational effectiveness and competitiveness. Prof Keegan has worked previously for DAF Trucks, Nokia , Nestle and the ESB.

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  Dr Richard Keegan is set to speak at ‘Taking Lean to the Next Level’, an Engineers Ireland/Enterprise Ireland seminar on Tuesday, 29 April at 22 Clyde Road. Lean experts – such as Ella Bennett, Fujitsu HR director (UK and Ireland) and Denis Hayes, MD, Industry Research and Development Group...