Technology's Role in Lean Today

November 10, 2009

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Early adopters of lean methodologies were satisfied with the flexibility provided by manual solutions. Today, technological advances and external pressures are making technology less likely to go head-to-head with lean.

In the last couple of decades, lean manufacturing has seen huge growth as a way of identifying and eliminating waste, or activities and resources that do not add value. By focusing on value-added activity, customer requirements and removing wasteful processes, organizations have optimized business processes and improved customer satisfaction.

Early adopters of lean methodologies were satisfied with simple, manual solutions and the flexibility they provided, which may help explain why some practitioners say the most high-tech tools that lean should involve is paper, pencils and spreadsheets.

Yet a number of technological advances and external pressures — ever-escalating customer expectations, pricing pressures and expanding supply chains — are making technology less likely to go head-to-head with lean today.

According to an Aberdeen Group report earlier this year, titled Lean Manufacturing: Five Tips for Reducing Waste in the Supply Chain, organizations applying proven technology to lean manufacturing today are significantly improving speed, efficiency and profitability.

Based on a survey of 117 companies, Aberdeen's findings show that the top-performing companies are using lean principles and software solutions "as a long-term strategy for improving people, processes and business results."

"Lean advocates often get a bad rap for being against technology in all forms — such as using paper kanban cards and doing value stream maps with pencil and paper — but this is not true," Mark Graban, a Senior Fellow with the Lean Enterprise Institute and founder of the Lean Blog, told IMT. (See today's Expert's Corner.) "Lean thinkers are willing to use technology, but only, as Principle No. 8 of The Toyota Way says, when it is tested technology that serves the people and processes."

As much as lean initiatives have developed through processes and organizational structure, lean-enabling technology has also evolved.

In recent years, manufacturers have become more sophisticated with their lean-enabling technology implementation, moving beyond electronic kanban (using an electronic signal to notify plant employees when other departments need materials). For instance, they're integrating modeling and simulation into their applications and using value stream mapping to document the production process and value-added activities.

Aberdeen reports that these measures, along with supermarket sizing ("inventory levels planned based on uncertainty of demand and attainments") and order management integration ("visibility into manufacturing constraints when order promising") are among the "lean automation" tools being used by manufacturing firms today.

Moreover, 63 percent of top-performing manufacturers (top 20 percent) have enabled lean manufacturing practices through demand planning and forecasting systems. Best-in-class manufacturers are using such solutions to determine forward-looking inventory targets by customer, location and so forth, for production planning and scheduling.

The best-in-class manufacturers cited manufacturing execution systems (MES) and advanced planning and scheduling (APS) as rounding out the top three lean-enabling technologies, all of which are more likely to be used in tandem with the lean tools discussed above.

The MES allow manufacturers to more efficiently track and trace production across the organization, optimize production schedules that have real constraints and improve quality from both a process and finished product perspective.

APS results in the creation of production plans at different levels of granularity (from monthly to near real-time) using a variety of approaches, such as theory of constraints and takt time scheduling.

A critical caveat for manufacturers who decide to leverage technology in a lean environment is that it should be reliable and thoroughly tested to serve the organization's processes and people, according to The Toyota Way. That is, the technology should be pulled by manufacturing rather than pushed to manufacturing.

Instead of fixing the dysfunctions of day-to-day business processes, companies often throw technology at the issue. Yet, as Kevin Meyer at Evolving Excellence makes clear, "automating the management of a problem is not managing the problem."

While the implementation of technology to aggregate, update and distribute optimal plans and schedules can complement a lean environment, the benefits are never a substitute for companies' continuous-improvement programs.

Earlier

The Toyota Way Forward

Is Your Lean LAME?

Resources

Lean Manufacturing: Five Tips for Reducing Waste in the Supply Chain by Matthew Littlefield and Nari Viswanathan Aberdeen Group, April 2009

Five Proven Practices to Achieve a Lean Supply Chain Aberdeen Group, May 6, 2009

The Lean Benchmark Report: Closing the Reality Gap Aberdeen Group, March 2006

Still At Odds or Has the Time Come? by Jane Biddle APICS e-News (Vol. 6, No. 8), May 2, 2006

The Theory Of Constraints Exposed IndustryWeek, March 1, 2007

The False God Opens a New Front by Kevin Meyer Evolving Excellence, Nov. 1, 2007

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