Over the last few years, the rise of cloud, mobile and other digital technologies have allowed organizations to put a fresh spin on the lean philosophy, particularly in the manufacturing and distribution space.
Though popularized more than two decades ago, the lean philosophy in manufacturing has effectively weathered the cycle of business trends. The idea of eliminating waste in all points of operation, maximizing customer value and doing more with less may resonate more with companies today than it did in the late ’80s and early ’90s. Over the last few years, the rise of cloud, mobile and other digital technologies have allowed organizations to put a fresh spin on lean, particularly in the manufacturing and distribution space.
Pioneered by major brands like Toyota and Boeing, the original tenets of lean – optimizing production line flow, simplifying complex processes, reducing costs and defects – still drive business success today. But these concepts alone aren’t enough to solve manufacturers’ and distributors’ modern challenges; others include a growing skills gap and constantly fluctuating customer demands.
As a result, industrial organizations are experimenting with and adopting technology that puts lean thinking into (supercharged) practice.
A recent study by Softchoice found that the majority (71 percent) of North American manufacturing employees use cloud applications at work. According to Aberdeen Group research, manufacturers using cloud-based ERP systems achieve a positive return on investment 75 percent faster than those with on-premise deployments. Sensor-based hardware, wearables and automation have become commonplace on factory and warehouse floors. With manufacturing sector productivity holding strong, something seems to be working.
A critical component of lean is the ability to adapt quickly to customers’ changing needs. Flipping through data-filled trend reports and staying current on macro indicators informs this process, but nothing is more valuable than fast and direct feedback. Manufacturers and distributors can and should create more digital mechanisms for collecting customer thoughts and disseminating them in real time.
A variety of touch points, from website review boxes and post-transaction email marketing to mobile apps, accelerate the customer feedback loop and encourage more frequent contact. Rather than keep this feedback locked in an executive silo, companies should share it with those who can use it most immediately, i.e. product engineering, product management and even production line personnel — offering more visibility into customers’ needs and expectations.
Manufacturers and distributors don’t operate alone or independently, but rather as vital links in a larger, more complicated supply chain. Coordinating with a sea of partner suppliers and logistics firms has been a historical drag on industrial organizations’ resources, contributing to inventory waste, production delays and botched fulfillment.
Equipping factory and warehouse staff with mobile applications or other software can streamline “just-in-time” processes and scheduling. These tools help integrate suppliers into day-today (even hourly) decision-making, enabling line workers to procure the right parts precisely when they’re needed to complete a product or fulfill an order. Internal collaboration apps can bring a variety of employees “virtually” into the challenge of solving a problem.
Another traditional principle of lean involves eliminating or at least minimizing defects and guaranteeing quality throughout the manufacturing process. For example, outfitting production and warehouse machinery with Wi-Fi sensors could signal when equipment is due for maintenance, or some other anomaly is detected. In a cloud-based environment, these notifications might be pushed to support staff (or the equipment vendor) almost instantaneously. Getting such information in the hands of the right people faster than ever before permits quick response to possible quality issues, heading off poor product release and/or eliminating wasteful rework and returns.
SUPPLY CHAIN REPORTING
Along with production monitoring comes reporting. Most manufacturing and distribution team leaders report on a number of key performance indicators, including hourly output and percent defects. Externally, organizations are increasingly expected to report order progress and delivery status to customers.
Some organizations already use connected sensors and radio frequency identification tags to create this transparency throughout their supply chains. Data captured through these tools, paired with business intelligence platforms, helps production leaders’ make necessary changes to simplify employee workflow, procurement and delivery.
One of the most interesting facets of the lean philosophy is its emphasis on giving employees responsibility and authority over process improvements. Rather than reinforce a top-down management structure, lean holds all levels of staff accountable for maintaining efficiency and proposing new ideas. With technology, organizations make this figurative empowerment tangible.
For example, employees become more self-sufficient if they can access operating manuals, manufacturer data sheets and ordering platforms from the operations floor (via a smartphone, tablet or other mobile device). Being able to order new parts for a broken machine or submit a service request from the production line minimizes downtown.
In an effort to form tighter, lasting bonds with customers, lean organizations should consider embedding digital technology within their products. Solid-state circuitry is entering a new era, one widely defined by the Internet of Things. By integrating sensors and attendant connectivity into their products, manufacturers create value-add for customers and funnel useful data back into their own systems
Digitally-enabled products both enhance customer utility (e.g., sending users real-time diagnostic information so they know when it’s time for maintenance or a replacement) and help vendors forecast demand.
Capitalizing on any of these digital opportunities requires time, planning and companywide support. Manufacturers and distributors just now graduating from on-premise systems to cloud environments may want to prioritize modest change, such as building additional customer feedback loops or hosting employee manuals on a corporate intranet. Supplier integration and connected product development initiatives demand intricate third-party coordination, as well as additional investment in data-skilled labor and sophisticated analytics software.
With so many relevant advancements in digital, manufacturers and distributors must no longer simply ask, “Where can we eliminate waste?” but also “Where can we leverage digital communication to advance lean forward?”
Acquity Group is a leading Brand eCommerce® and digital marketing company, now part of Accenture Interactive, a group within Accenture Digital that helps the world’s leading brands drive superior marketing performance across the full multichannel customer experience. Acquity Group leverages the Internet, mobile devices and social media to enhance its clients’ brands and eCommerce performance.