Lean Manufacturing and related Continuous Improvement used widely in the Automotive Industry have stood the test of time. However, businesses typically with easy large batch processes selling their products from large distribution or product mixing centres perceive that because they manufacture to a forecast, the variable combination of lead times and growing cycle times add complexity to an already complex business.

The food industry consider that the Lean Manufacturing  approaches to improvement present obstacles within the processes but, the food manufacturing industry has many similarities to other industries, not the least of these is the fact that product is processed just like other forms of manufacturing. Health and safety considerations add to the complexity of processes but again, do not alter the fact that they are still processes that can be improved.

As with all industries, companies in this sector have the same cost, quality and delivery pressures as the automotive industry but the food industry have not progressed as the automotive sector have and the following obstacles remain the same:

• Lack of persistent and challenging leadership
• Lack of clear vision of the future and of what is possible to achieve
• Failure to link the processes in Kaizen with normal work. It is often seen as a separate program and not part of everyone’s formal work
• Lack of patience to follow through
• Failure to perceive that lean is a variable strategy to help achieve competitive advantage
• Failure to engage and involve employees at all levels in the process from an early stage
• Lack of constant visibility by management on the shop floor
• Holding to the presumption that lean methods cost a lot of money. This results in indecision and failure to act
• Failure to see that management must use lean methods to change the culture. The usual view of lean is that it is a narrow technical means to save cost.
• Failure of management to take a whole system view of the business and to see the connections between all processes.
• Persistent focus only on demanding results without a balanced focus on improving the processes that achieve the results. The goal is to have a proper balance between these two facets
• Perpetuating a blaming and judgemental culture

So what are the typical waste or non-value added activities (Muda):

• Muda of Production
• Muda of inventory
• Muda of transport (of material)
• Muda of motion (of people)
• Muda of over – processing
• Muda of rework
• Muda of waiting

Muda of poor quality is a constant issue and the application of “Total Quality” or 6 Sigma strategies to improve quality are most relevant. There is a misconception that quality is relevant only in the finished product and what the paying customer considers. “Total Quality” is by its very definition, “quality in everything we do” and quality is not something you inspect into the product, quality is what everyone willingly contributes by following the process of the production cycle, from design concept to the point of sale.

The application of Lean here is the same as for other industries, to remove all forms of waste in the production process, to ensure excellent quality and reduced lead-time through the transformation processes typically indentifying ‘non value’ added and converting to ‘value added’. Other areas for consideration are identifying the variability in the process and implementing improvement to reduce. PITVR (Process Improvement Through Variation Reduction).

Quality International UK Limited (QI) is a Kaizen driven company which lives and breathes this philosophy and has driven the implementation of “World Class” manufacturing strategies extensively within its own business and within the Automotive sector. Kaizen strategies which include Just In Time (JIT), Total Quality Management (TQM), Total Productive Maintenance (TPM) and Total Employee Involvement (TEI), all result in improved cost, quality and delivery to the customer. The involvement of every employee in Kaizen or Continuous Improvement can be started very easily. There are two levels of involvement designed to maximise employee involvement.

One level of the most basic Kaizen practices is 5 ’S’ or work place organisation. 5S stands for the five steps of improving workplace organisation namely; Separate and Scrap, Straighten, Scrub (Clean), Standardise (the practices) and Systemise and special methods. There are some variations to the wording that different companies adopt but the fundamental message is the same.

The second level is a focused improvement activity that is applied to the work areas and would involve the employees in that area.  Each time a session is held, a different improvement approach will be adopted depending on the constraint or need. The employees learn lean practices as they are implementing them.

Overall Effect On Financials

Kaizen will impact on the financial statements in a variety of ways. Much of it will be improved opportunity costs, in other words the “cost of quality” for example, labour savings would directly affect the bottom line and improved productivity would result in a better overhead or burden absorption, thus reducing unit cost. Improved machine uptime as a result of TPM implementation usually results in improved capacity utilisation, improving the ROI / ROA calculations. Also in addition, capital expenditure can be avoided if capacity was a constraint, resulting in lower depreciation charges against margins. This also improves operating capital ratios. Improvement in quality obviously results in less waste of material and this directly affects material costs in the income statement.

Resistance To Change

There are no secret or mysterious ways to prevent resistance to change. Hard work is required mainly by management who must lead in a challenging and visionary way. They should never accept current conditions as being acceptable. Employees and engineers should be shown how to make improvements through training and best practices.

Management must ensure that no one suggests that their situation is unique and that improvement practices or Kaizen cannot be applied to them. Management should focus on using those people’s resources that support the notion that things can be improved and not worry about those who resist. It is not proactive to wait until everyone sees ‘the light at the end of the tunnel’, there could be a train coming.

Quality International can help you make the improvements and then people will come round.