Please wait.'

Page is loading'

Home  > Publications  > Blog  > LEAN manufacturing and JIT under pressure.

Thursday, 01 October 2020

LEAN manufacturing and JIT under pressure.

Thursday, 25 August 2011 | Posted by: Peter A. Rieck, Marcmoor Ltd.

What looks like a short term supply issue may yet turn into an important challenge to Just In Time and Lean manufacturing.  In the current uncertain business climate many are experiencing either shortages or unreliable supply of raw materials.   Last minute changes to delivery times and quantities are forcing companies to carry greater stock than they would like while facing disruption to production scheduling, testing management’s resolve over their approach to LEAN manufacturing.   Companies in the middle of the supply chain are coming under the greatest pressure.   They are being squeezed between customers refusing to carry high stocks and suppliers taking advantage of the strength of their position.

It is widely accepted that good supply performance, increased efficiency, minimum stocks, reduced waste and improved cash flow are key benefits from adopting the LEAN manufacturing and JIT approach.   However to make this approach work successfully requires a very well co-ordinated organisation with good reliable information upon which to base the scheduling of its manufacturing activities.

Recent reports indicate that we are seeing reliability of supply being added to other issues such as transport costs, delivery times and distance from supplier.   It is uncertain whether the situation is short or long term, what is certain is that it is beginning to give rise to higher levels of stock at many companies in an effort to safeguard their supplies to customers and protect sales.   Hardest hit are smaller companies who have less critical mass or bargaining power and are facing even greater demands on their working capital at a time when they can least afford it.

Emerging from the summer shutdown, with serious questions being asked about the economic climate and slowing of growth in GDP, particularly in the European and American economies, competition for sales is growing ever stronger.   Against that background, the trend by customers is increasingly to demand products and services tailored to fit their particular needs.   That means that it is difficult to rationalise product ranges, stock becomes a liability and there is an increased risk of waste.

We appear to be at a tipping point where we may see a shift away from LEAN manufacturing emerging, driven by a reaction to seek the comfort of making for stock when all else is uncertain.   Such a reaction though, is also a possible symptom of a company that lacks confidence, is not well integrated, probably has poor real time reporting systems and generally has an over departmentalised organisation.

Now is the time to take fresh look at these areas of the business.   It is time to move even further in the direction of LEAN manufacturing.   That starts with improving and updating the interface with customers and suppliers as prime sources of information.   Good reliable and up to date information is the key to good planning and scheduling.   Good planning and scheduling is the foundation of LEAN manufacturing.   For example, it means reviewing forecasting even at times daily, it means changing the relationship and contact with customers and it places far higher demands on communication within the organisation.   The strength of that communication will depend on the internal sales team and the pivotal role of production planning.   Much will also be determined by the quality of the tools available in the form of IT applications.   But above all, the team has to want to make it all happen, which is inevitably the starting place for top management’s involvement.

So instead of resorting to good old fashioned re-stocking or dramatically restricting product ranges and technologies it is essential to take the opposite view and take a good long look at how LEAN manufacturing can handle these factors.    By accepting that to be competitive in future a company has to have a wide number of products and technologies backed by a variety of services on offer to the customers of today and tomorrow.   Then it is also necessary to adopt a different approach and rational to deal with the scenario.  

Rather than shying away from LEAN and JIT, to meet the challenges of the market, it may be necessary to whole heartedly embrace them to deliver what the market wants, enhancing competitive edge, improving performance and increasing profitability.

Peter Rieck,

Peter Rieck Consulting

Marcmoor Limited  

Comments (0)
Add Comment

Post comment

You are not logged in