Using Lean to reduce costs
Lean principles can be used to reduce inefficiency and waste in all departments and functions of an organisation. Lean thinking and principles has been used in the manufacturing sector for many years and has, in some cases, produced impressive reductions in cost. These principles are now being adopted in other sectors.
What is Lean?
The basis of lean is the concept of Value Add and Non Value Adding activities. Organisations which have adopted these concepts have minimised Non Value added activities, which reduces errors and costs and increases customer satisfaction. The basic lean tools are:
- The 7 wastes
- 5S workplace organisation
- Product flow and pull
- Value Stream Mapping
- Process Mapping
- Continuous Improvement
- Eliminate Errors
- Visual Management
- Overall Equipment Effectiveness
The concepts of ‘Lean’ business processes have been known for over 25 years. Developed by the Japanese automotive industry, they are based on a common sense approach to business – with the basic principle being to eliminate wasted effort by only performing the activities that are necessary, and doing so in the shortest and safest manner.
There are a variety of tools and techniques that can be applied to a company’s maintenance department and, if used and supported, will: reduce maintenance costs, improve equipment reliability, improve safety performance and increase workforce productivity.
Typical results will show: costs reduced by 20-30 per cent, equipment performance and reliability increased by up to 50 per cent, labour utilisation increased by 100 per cent, and accidents significantly reduced…Read More
Example of using Lean in the service sector
You can reduce non value adding activities by using the flow and pull technique. You can improve flow by ensuring that your customers have access to information so that they do not have to call/wait for predictable information when they need it. Automating simple processes such as expense reimbursement and travel booking will improve pull. It speeds up completion, reduces human error and increases productivity.
Lean is also used within a maintenance and asset management context to reduce costs and ensure high performance in manufacturing and maintenance service contract provision. Without reliable equipment, optimized equipment changeover/set-up times and optimum costs, manufacturers will not be able to achieve optimum cost and reliable customer service with minimal inventory.
- Using the improvement tools of lean within a maintenance context involve:
- Reviewing maintenance processes and procedures
- Revising maintenance plans
- Improving spare parts management
- Tender and contract management
- Implementing operator asset care (OAC) and TPM
- Equipment Changeover (SMED)
- Workshop organisation
- Failure analysis
One of the main performance measures in a manufacturing facility is OEE (Overall equipment effectiveness) OEE is a single measure used to identify and report all of the losses within a manufacturing process. OEE is measured as Availability x Performance x Quality
- Availability = Actual run time ÷ Scheduled run time
- Performance = Quantity produced ÷Target Quantity
- Quality = Quantity rejected ÷ Total Quantity Produced
Identifying the sources of loss* is the first step to improving OEE performance. Losses can be caused through:
- Poor equipment reliability
- Excessive maintenance
- Long changeovers and set-ups
- Poor labour control
- Product, material or process design.
Adopting continuous improvement processes and best practice manufacturing and maintenance will drive out losses and increase OEE levels.
Maintenance to support your Lean Manufacturing Strategy
MCP provide lean consultancy which has developed an engineering diagnostic approach which incorporates the principles of Lean with best practice in maintenance engineering. The diagnostic is seen as the first stage in an ongoing improvement programme.
Programme Objectives – Combining Lean with Best Practice Maintenance:
- Achieve productivity and efficiency improvements
- Identify the scope for any cost efficiencies
- Develop and provide best practice maintenance and engineering solutions
- Understand what maintenance engineering excellence looks like
- Determine the performance measures needed to drive improvements
- Identify the size of potential benefits
- Develop an outline action plan for your site
Programme Benefits – Combining Lean with Best Practice Maintenance:
- Improved plant reliability and performance
- Reduction in the cost of maintenance
- Implementation of best practice solutions to drive improvement
The phases of the project will be:
- Diagnosis and assessment, incorporating Process Mapping
- Development of improvement plans – Continuous Improvement
- Implementation of improvements – including 5S and the 7 Wastes.
Find out more about MCP’s approach to help you support your manufacturingprogramme.
Training to Support your lean manufacturing programme
If you are new to maintenance or work in production or operations, and need an understanding of how maintenance can be the determining factor in whether your manufacturing strategy succeeds or fails, then MCP’s new course might just be the one for you. Launching this new, 2 day training course entitled ‘Maintenance Explained’, MCP will teach how, the fundamentals of good maintenance management in a manufacturing or service environment, can lead to cost savings, efficiency improvement and most importantly reliable equipment. Tell me more about the Maintenance Explained training course.
Reduce your costs within 6 weeks with our Production Improvement Programme, which utilises Lean manufacturing techniques…..
The Scottish Manufacturing Advisory Service (SMAS) asked MCP to develop a Lean toolkit for their consultants in assisting organisations – find out more.