Lebanese industries face stiff competition in their main market, the Gulf. Their competitors, Gulf companies themselves, have the advantage of proximity to the marketplace and lower manufacturing costs.
Therefore it is upon Lebanese manufacturers to deliver, on very short notice, differentiated and customized products. To do so, they have to apply time-based management. One such approach is “Lean” manufacturing. Lean, which originated in Japan, is now widely applied and has become a staple for many successful industries.
Lean is a production management system based on waste reduction and continuous improvement, aiming at safely applying the “Just-In-Time” concept, or aligning production with customer needs. While it offers a well-known toolkit of principles and techniques, knowing how to apply them and in what order is a constant challenge for manufacturers.
Lean implementation applies its different tools in parallel so they all reinforce and synergize. During the whole process, through every action, the end goal is always to eliminate wasteful activities that customers are not willing to pay for. In fact, waste elimination is the concept underlying continuous improvement; it is an ongoing and never-ending effort.
Going against instinct
Lean manufacturing is a corporate cultural revolution. Its application requires a change in our mindset, a reversal in our way of thinking, shifts in our professional paradigms and changes to some principles that we have imbued throughout our education. As such, Lean principles may sometimes feel counter-intuitive.
For example, when I started to work in a factory as a fresh graduate engineer, my boss taught me that a factory in which one or several machines are not running is an inefficient factory. I lived by this principle until I was trained on Lean. In Lean, the new rule that governs this domain dictates that any factory in which all the machines are running all the time is an inefficient factory; the complete opposite to my supervisor’s earlier teachings.
The reason is simple: A manufacturing process cannot be balanced all the time, for all product types. Consequently, if all the machines are running all the time, they will build an inventory of work-in-process. This is a sure-fire recipe for failure. We can deduce from the above that the difficulty in implementing Lean will be to get employees, employers and customers committed to this change.
Most employees I have worked with in Lebanon are smart and open-minded people. Furthermore, while cooperation may not be a trait us Lebanese are famous for, I am regularly surprised by how well employees work as a team when necessary. When they meet in quality circles, they are able to come up with proposals for improvements that are simple, cheap and efficient.
However, in the presence of technical or managerial staff, they are often reluctant to participate for fear of making blunders or being ridiculed in front of their superiors or colleagues. As such I have learned to give them sufficient autonomy to unleash their creativity. The management facilitates from the sidelines, scheduling meetings, encouraging participation and perhaps most importantly, executing the proposed improvements.
A problem I regularly face that undermines the Lean process is a lack of discipline. Without discipline, all improvement will vanish in a short period, and things will slip back to their original state. Unfortunately, in Lebanon people are not properly educated in respecting the rules and regulations in force, and this often carries into the workplace. This invariably leads to mediocre results that can discourage the workers from persisting with the Lean implementation program.
The individual egos of staff can also interfere with what is essentially a finely tuned team process. Workers often start testing improvement ideas without following the established procedures, hoping to take credit for them. To avoid this problem, it is important to equally reward the team when they come up with a bright idea. Teamwork should be promoted through training.
Change starts at the top
Management also plays an integral role in ensuring the success of Lean. Negative vibes propagate very rapidly within the company when management falters in the enforcement of Lean application. Managers should be trained on their leadership role in Lean implementation, and they should sponsor Lean culture, deploy a communication strategy, review application progress, motivate their teams, solve conflicts and hold people accountable.
Even when committed to Lean, executive managers, chief executive officers and other senior managers oftentimes do not feel comfortable with the initial changes on the work floor. They are accustomed to seeing piles of accumulated work-in-process and subassemblies lying idle on the shop floor between machines. The sight comforts them, as it gives the illusion that the factory is adequately loaded with orders and consequently production output is high.
However, with the application of one-piece flow, products after processing are directly sent from one machine to the next instead of being loaded into boxes or on pallets. This dramatically reduces the amount of work-in-process, giving the impression that capacity utilization is much lower than its optimal value. In my experience it often takes them quite some time to get used to the new panorama and to overcome their initial negative reaction.
The customer leans, too
Bringing the customer on board is essential to the successful adoption of the new Lean production system. If customers can be convinced to break down their monthly orders into smaller, weekly ones, they will enable the producer to balance load and capacity more finely.
In my experience, distributors almost always reject this proposal out of hand, even though it is to their full advantage. Segmenting orders allows them to reduce the volume of their stocks, be more flexible and maintain a streamlined cash flow. The reason for their reticence is that they are afraid they would not deliver within shorter periods of time; instead of having one late delivery per month, they would end up with four late deliveries.
Moreover, instead of running an inventory analysis once per month, they would now have to do it weekly. However, by highlighting the advantages, stringently committing to delivery dates with a penalty clause, and moving progressively by increasing order frequency step-by-step, customers would come to accept the win-win scenario of adapting to the Lean processes.
Lean forward, not back
Applying Lean manufacturing is a time-proven model that consistently delivers results. Within the parameters and principles it lays down, there is flexibility for innovation and development, and, as such, it can be applied to any manufacturing process.
While Lean may require a change in mentality, sustained training and close follow-up under strong leadership, the outcome makes it a worthwhile endeavor — essential, even. The only alternative is to watch the competition steal the market and wither away into yesteryear’s realm.
Samer Tabbal is a partner at Takt Consulting