Industry Market Trends

Does Lean Manufacturing Work for Small-Run Job Shops?

Oct 30, 2013

Lean manufacturing tends to be associated with large-scale, mass-production manufacturing. But can smaller-scale job shops benefit from such process-improvement programs as well? 

Shahrukh Irani, director of industrial engineering research at Hoerbiger, a Swiss manufacturer of automation and drive technologies, believes so. One problem, he told IMT, is that "low-mix, high-volume production was beaten to death because it was handed to us by Toyota." So knowledge about lean implementation is biased toward large manufacturers capable of large runs.

Most manufacturers, though, are smaller enterprises. Nearly three-quarters of manufacturing firms have fewer than 20 employees, according to data from the U.S. Census bureau. Such businesses often trend toward contract work and lower-volume production. To remain competitive, the business has to be flexible and resilient, prepared to retool efficiently and move quickly from one job to the next.

The Lean Enterprise Institute (LEI), a Cambridge, Mass.-based nonprofit organization founded by James P. Womack, says that the core idea behind lean thinking is "to maximize customer value while minimizing waste," in other words, "creating more value for customers with fewer resources."

In the 1980s, Womack coined the term "lean" to describe the thinking behind Toyota's highly-successful Toyota Production System (TPS). According to Toyota, TPS is based on two primary principles:

  • Jidoka, a Japanese term referring to the TPS rule requiring that the production line come to halt when a problem occurs to prevent the production of defective products.
  • Just-in-time, meaning that the firm makes only what is needed, when it is needed, and in the amount needed.

Forrest Breyfogle III, CEO of consulting firm Smarter Solutions Inc., agrees that contract manufacturers can benefit significantly from process improvement programs. After all, he told IMT, such manufacturers "have processes and should have related performance measures relative to how well these processes are performing."

Hoerbiger's Irani wrote in Industrial Engineer magazine that the problem with lean thinking for smaller manufacturers is that "the majority of the popular lean tools never were designed to handle the operating conditions of HMLV [high-mix, low-volume] manufacturing facilities."

An HMLV shop has to deal with "a large variety of components," resulting in an extremely complex material flow network. Job shops also tend to group their equipment by function, resulting in a "process layout" that in turn results in the kind of wasteful "batch-and-queue" production system that is the antithesis of lean manufacturing, Irani wrote.

He maintains that other challenges arise from the business conditions of the low-volume producer: "volatility in demand and delivery dates, more variety in products, highly variable setup times and cycle times between different routings, a more diverse customer base, limited ability to train the workforce, limited finances to hire full-time staff devoted to continuous improvement, more complex production control and scheduling, and limited influence on supplier delivery schedules."

The list of challenges is long, but Irani believes there are lean manufacturing tools that will work in job shops. For example, he said, any job shop should be able to implement jidoka, 5S (Sort, Set in Order, Shine, Standardize, and Sustain), TPM (total productive maintenance), setup reduction, error-proofing, quality-at-source, employee involvement, strategic planning, standardization of tools and processes, and right-sized machines. A study of Toyota's practices around leadership, cultural change, process improvement, and workforce development -- the "soft side of lean," as Irani calls it -- should convince smaller operations that they can benefit from "knowledge-driven leadership, humanization of work, and employee-driven improvement."

Chet Marchwinski, communications director at the Lean Enterprise Institute, agrees that "companies in a variety of industries are reaping big gains from lean thinking," and that such gains "aren't restricted to repetitive manufacturing environments, such as the automotive industry." Writing in Cast Polymer Connection magazine, Marchwinski asserts that job-shop producers can benefit from lean manufacturing, particularly by focusing on creating "continuous flow production," in which "items are processed and moved immediately to the next step," resulting in "very short lead times, rapid identification of problems, quick communication between steps, increased productivity, higher output and conservation of resources." Even value-stream mapping can work for job shops, although Marchwinski acknowledges that this is more complex for such manufacturers.

Marchwinski cautions, though that lean-thinking techniques "are meant to be applied as part of a system ... that gives customers what they want, when they want it, at the lowest cost, and with the highest quality," and if managers try to "cherry pick isolated lean techniques to apply, they implement only bits and pieces of lean and reap only partial benefits."