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Soundview Executive Book SummariesTools For Reducing Waste And Maximizing Profits
Lean manufacturing expert Bill Carreira wants to help manufacturers make lean manufacturing a reality. He has written Lean Manufacturing That Works to show companies how to create a lean culture by integrating lean thinking into the development and support of a business plan. To help businesses eliminate wasteful activity and free up time and resources to be devoted to value-added activities, Carreira presents lean-thinking principles that top management can embrace and share with everyone in the company.
Carreira breaks down Lean Manufacturing That Works into two sections: One discusses and illustrates the logic of what can be accomplished by adopting a lean operating philosophy; the other describes many of the tools of lean and how they can be put to good use. He bases his advice on the idea that to make money, you must be a premier satisfier of customer demands. How manufacturers manage and balance people, materials and machines is what leads to competitive effectiveness, and Carreira describes a better way to direct overall resources. Since survival depends on being more competitive, his advice helps company leaders compete better by showing them how to pay more attention to what they are doing.
Give Customers What They Want
At the heart of the lean manufacturing message is the customer who is willing to buy the product being sold. Measuring all activity from the customer's point of view, Carreira writes, helps companies give the customer what he or she wants. Describing the steps along the way toward getting the product into the hands of customers — including considerations of cost and profit, metrics, cash flow, inventory and carrying cost — Carreira dissects the manufacturing process and sheds light into the shadows of inefficiencies and backward thinking.
When discussing the importance of metrics in the continuous improvement process, Carreira writes, "What we measure dictates what we do. If we don't measure it, it's not important." The trend being measured is often more important than the actual number, but the metrics control performance and business decisions. He explains that metrics must also be complementary and give everyone in the company the same message. Also, measurements should be taken of all activity across the entire value stream, rather than only of direct labor.
Carreira explains, "One of the cornerstones of the lean philosophy is waste elimination." To eliminate waste, it must first be identified. After describing how waste can be found in the time workers spend carrying a product across the production floor, or turning raw materials into product parts before they are needed, Carreira presents seven categories of waste that are addressed by lean theory. They are:
- Unnecessary inventory
- Activity resulting from rejected product
- Unnecessary motion
These activities add cost and do not cause a product to be transformed into a more complete product from the customer's point of view. They also reduce the profitability of an operation.
After defining the differences in value-added (an activity that makes a product a more complete product), non-value-added (an activity that does not advance the product to a more complete or finished state), and required non-value-added (non-value- added activities that are required by the customer), Carreira explains how their costs can be reduced.
The rest of Lean Manufacturing That Works shows manufacturers how to map out a lean manufacturing model by doing a baseline as a five-day event, performing a lean-engineering analysis, balancing the activity and creating a line or cell model. He also describes the best ways to make a 5S (sort, set in order, shine, standardize and sustain) system work: Get top management on board and firmly in the driver's seat.
Why We Like This Book
Carreira turns the topic of lean manufacturing into an exciting way to improve a company's profitability by focusing on small improvements every day. The format he uses to present his lean tips and techniques — a combination of pointed dialogues, solid examples, graphs and flow charts — makes them understandable and ready to use. Copyright © 2005 Soundview Executive Book Summaries