The future of the manufacturing industry is often discussed in the local scenario and although every effort is made to keep a positive outlook on the matter, it is universally accepted that our attitude to manufacturing must change. The pressure for change has never been so great owing to the current economic crisis, which poses great challenges to any manufacturing company.
Post-World War II Japan was also pressured to change with Toyota having a very limited time window in which it had to compete with large American automobile firms. After observation of their own manufacturing processes, the Japanese soon identified the large amount of wasteful activities that were part of their processes. This led them to engage in a war on waste, giving them a head start which they are still enjoying to this day - more than 60 years later.
Toyota's manufacturing science was a source of inspiration to many Western business academics who have imported this management style to many American, then European, companies. The success of lean production is now universally accepted, and its principles have often even been exploited by companies for their marketing purposes.
Gone are the days when "you could choose any colour of your vehicle as long as it was black" (Henry Ford remarking about his Model T). We live in a world where customisation should be at the top of any business's agenda. One only has to think of cars that come in hundreds of different configurations, or personal computers that are fabricated in tens of different colours.
Such customisations create a huge logistical problem for our "mass production" mentality. We have long been investing in enormous equipment that can produce huge amounts of the same thing 24 hours daily, when now there is a shift in need where we require smaller amounts of different items. This problem also extends to our accounting departments which have to excuse the large cost of the equipment by spreading investment onto as many numbers of produced units as possible.
Admittedly, lean does not offer a magical formula that can be applied universally leading to instant success. Many gurus advocate the importance of viewing lean as a long-term solution requiring a substantial commitment from top management which must effectively permeate to all employees by means of effective training and "leading by example".
Lean production looks at how the resources during production are spent and considers anything that is not used to create value as waste, or as the Japanese call it, "muda". The practice also stresses that value is anything during the process that the customer is willing to pay for. For instance, if you are buying a refrigerator, do you really want to pay for the cost of processing your order, for the storage of the item until it is shipped, or wait a long time until you receive it because you ordered it with an extra shelf? Although you are not willing to pay for it, you probably are. And so is your customer.
Lean thinking is built upon five principles which guarantee success to any company in any industry sector. First and foremost is the principle of specifying value to your product or service. Successful businesses start with an idea of a product or service that the customer requires; however, many fall into the trap of starting to look at that product through their perspective rather than the customer. These businesses start losing focus on what the customer wants and start to design their product around what their machines can produce, or round convenient lunch breaks for their service personnel.
Secondly, the manufacturing or service process is analysed thoroughly to identify the value stream - all the activities that are of value to the end customer. Organisations that are fortunate enough to go ahead with lean transformation usually start their journey by mapping all their processes which always result in exposing the massive amount of "built-in" waste.
Thirdly, the value adding activities are made to flow smoothly by eliminating all activities that are wasteful. Fourthly, the company must produce the product or service according to customer demand - pull. The application of the lean concept requires constant commitment and training which brings us to the fifth and final lean principle - the constant search of the most efficient process - the pursuit of perfection.
The Maltese manufacturing industry is exposed to many challenges, some natural such as being based on an island cut off from the trade mainland, but also other challenges that can be met with proper training and guidance. One of these challenges is to transform our manufacturing methods into state-of-the-art processes that promote efficiency and eliminate waste.
There are already companies in Malta that have embarked on the lean journey, however many argue that there are little available resources locally to sustain companies through this challenging path. Conversely, the situation is changing and the potential for success is soaring.
Mr Zarb-Piscopo is director of Nascence Training and Development specialising in 'lean management' courses.
info@nascencemalta.com, www.nascencemalta.com