Almost a century ago, Toyota started to develop its Toyota Production System, the archetype of every lean manufacturing system. Almost every manufacturing company nowadays seems to try to implement lean manufacturing. At the same time, most also seem to fail miserably, creating a lot of huff and puff with little benefit. However, occasionally there are (very) few companies that have implemented lean manufacturing successfully. Trumpf and its Synchro production system is such a successful example of Lean manufacturing, and one of the finest production system for machine tool builders. Due to the length I have split this post into two parts, the second part being available here.
The speed of modern business is continually increasing. Product life cycles of cars and mobile phones are decreasing, and customer demand is more volatile. Gone are the days of Henry Ford, who produced his Model T for almost 28 years without much change. Modern manufacturing systems need to be prepared for a constantly changing environment. The challenge has been realized for quite some time now, and there are a multitude of expressions related to this problem. This post will discuss many of these terms related to the challenge of change.
The cost of complexity can significantly impact the bottom line of manufacturing companies. According to A. T. Kearney, the top 30 companies in Germany could earn €30 billion more if they would reduce complexity, increasing their EBIT by three to five percentage points. After discussing the cost of complexity in a previous post, using the Maybach as an example, this post describes the general levers influencing complexity cost.
With the end of last year, Daimler stopped selling its flagship vehicle, Maybach. I would like to use this opportunity to talk about the danger and harm to your company by increasing the number of product types sold. As an illustrative (and expensive) example, I would like to split the total cost of the Maybach in its individual parts (as far as I can estimate them). My hope is that this motivates you to reduce, or at least no longer increase, the number of variants in your product portfolio.
The concept of lean manufacturing originated on the shop floor at Toyota. Since then it has expanded into many other areas, including but not limited to lean healthcare, lean administration, lean logistics, lean services, lean hotel, lean military, lean banking, or any lean whatever topic. There is even a lean government, albeit I am somehow skeptical on that one. Even so, most practitioners of lean work in manufacturing. Hence it comes as no surprise that most lean efforts are focused on the shop floor. However, while there is usually much improvement potential on any given shop floor, it is not necessarily the area you most want to improve.