Lean Manufacturing: The Required Ticket to Doing Business Today with OEMs

Posted by Craig Zoberis

Apr 21, 2015 6:57:00 PM

Rob_McCannQuality products. Low prices. On-time deliveries. As an original equipment manufacturer (OEM), you’ve likely heard that you can only offer two of these qualities out of three to the market. Clients are becoming more demanding, markets are now more customized, and product life cycles are getting shorter. However, applying lean principles will give you the competitive advantage required to have all these qualities, without excess strain on your employees or budget. No longer an optional methodology, lean manufacturing is now an essential component to keeping up with the changes in the industry.

Lean thinking is about removing waste in the organization to generate real, tangible benefits for the manufacturer. According to Rob McCann, Vice President of Operations of the Illinois Manufacturing Excellence Center (IMEC), “Lean manufacturing is the systematic approach to identify and eliminate waste from processes whiles educating and improving the skills and environment of workflow”. This increases the value for the customer and improves your company’s bottom line.

Increased Efficiency for a Competitive Advantage

Lean principles address the Nine Areas of Waste: motion, inventory, waiting time, transportation, information, quality, overproduction, processing and creativity. By eliminating waste, a manufacturer has the opportunity to abolish time spent on unnecessary tasks. Implementing Lean allows a manufacturer to streamline their processes throughout the entire organization, from the front office all the way to distribution. Efficiencies are developed and the manufacturer is able to work at its full potential. This results in reduced manufacturing costs and increased speed to market. 

A Culture of Continuous Improvement

With a lean mindset, employees are aware that the job of improving is never done. “Business excellence is delighting customers through continually improving the performance of people, product and processes,” McCann states. Once the lean manufacturing mindset permeates your team’s culture – from top leaders to front-line workers – then your one-time process improvements become continuous improvements, which ensures you never again have to initiate new improvement projects.

Focused Efforts with Lean Thinking

The 80/20 rule (or Pareto principle) states that 80% of your revenue comes from just 20% of your products. This means a large number of your products are bogging down your business and consuming valuable time, budget and floor space. A lean manufacturing mindset helps you improve your manufacturing processes by eliminating or outsourcing legacy products and letting you focus on the product lines with the most profitability.

Lean manufacturing is more than just a trend or a fad; it’s a serious mentality that every OEM and contract manufacturer needs to adopt. Because when you make the transition to a lean mindset, your process improvements and your profits perform better than ever before.

 

Topics: original equipment manufacturer, lean manufacturing

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