Lean sigma: Just one vital piece of the strategy puzzle
The ideas behind lean manufacturing have may have been around for years, but the revolution is not over yet.
For the last 20 years UK engineers pursuing a career in operations have been involved in a tumultuous world that has gone through the revolutions of ‘lean’ and supply chain globalisation. The industry has seen business leaders enthusing about the savings and rigour of Lean Six Sigma techniques and the prospect of margin enhancement by off-shoring manufacturing to China.
Many of the engineers working in this area have, in quick succession, gone from being Six Sigma black belt pioneers achieving unprecedented sustainable savings in factories, to being in charge of moving whole operations to the periphery of Europe and the Far East. We have been the ones tasked with making it all happen. The result is that manufacturing in the UK makes a much smaller contribution to our economy and is now almost synonymous with lean. Indeed, many of the large remaining factories (e.g. Nissan in Sunderland) have become stalwarts of lean manufacturing.
Today we are wiser, leaner, and indeed fewer, than we were in the 1990s – but the lean revolution is just getting started, and this is not only because lean isn’t an exact science or standard. The truth is that the UK’s mid-sized companies have yet to experience lean in the intensity it needs for sizeable productivity gains.
This, coupled with two decades of under-investment in technology and automation hampers prospects of growth in scale and exports. Is this insight enough to focus our efforts as UK operations professionals for the next 20 years? The answer is no, this is but one dimension of the challenge facing UK manufacturing.
At Altro, where we have been making vinyl safety flooring for generations, our lean journey has yielded notable savings and productivity gains. In the last three years our employees have learned and used Lean Sigma tools, executed improvement projects and reduced waste. This is not revolutionary per se, though Altro’s culture of employee engagement has helped the quick adoption of lean practices, and the company continues to embrace its usage. The savings generated have been ploughed back into the business in pursuit of innovation and automation.
We are funding and exploring things that a mid-sized UK company rarely considers: Industry 4.0, supply chain integration and the internet of things (IoT) – transitioning from products to services and placing the customers’ hidden needs right in the core of our innovation thinking and execution. This has enabled us to embark on strategic operational and technological initiatives that hitherto have been the domain of the large multi-nationals. It has brought us into close collaboration with our customers and a dozen of the UK’s best universities and has instilled in us the unshakable belief that we can indeed achieve our company’s vision to become a billion-dollar company while remaining in the private sphere.
In this journey, our Lean Sigma efforts have been just one strategic initiative, albeit a very important one. Had it not been a deliberate element of our business model but only the traditional ‘show me the money’ initiative that just saves some waste, it would not have been sustainable. This is the unique insight we want to share with the rest of UK manufacturing industry.
Every business needs a set of deliberate strategic initiatives in which Lean Sigma can act as a nice multiplier of resources, but this has to be in the context of achieving a clearly articulated and tangible vision, which in turn needs to be firmly underpinned with a clear sense of purpose and a set of practised values. Crucially, only within this enterprise model can operational professionals in the UK fully enact the strategic role which they are called to fulfil: the development of capabilities to dynamically match processes and infrastructure to order-winning criteria, whilst building innovative technologies, products and services that competitors find hard to match. These aspects are strategic in nature because they involve structural decisions and actions that are important to get right first time.
In the absence of such a context the role of operations management will continue to be limited to the realms of operational control and disjointed lean improvements which is short-termist and reactive in nature. The future can be brighter.