by George J. Whalen In the economic downturn since November 2000, smart businesses, including some that use digital printing in their manufacturing processes, are discovering the "lean manufacturing" philosophy -- that employees can be better motivated; that workflows can be re-engineered; that processes and procedures all can be improved and made more value-adding - and that productivity and profitability can jump as a result. This article explains key theory points and gives a practical example of how a business using digital printing has benefitted from its committment to being "lean and mean." Lean principles, once incorporated into the workplace, may similarly aid your business to survive and grow in the future. Why Be "Lean?" In today's manufacturing, customers determine the order quantities and delivery times. The days of "economic order quantity" are long gone. Customers expect high-quality products and fast response to their needs, all at a low cost. To meet those demands, rapid and cost-effective job changeover is an essential feature of any manufacturing cycle. Using more labor, time or expense than the barebone minimum a job requires can be suicidal in a highly competitive, price-sensitive economy. Correctly analyzing current job changeover practices and streamlining them can save time and costs, adding to productivity and profit. When you reduce inventory, expand jobs and responsibilities, have employees participate on multi-functional work teams, problem-solve at the source, benchmark, create and maintain relationships with customers, then, you will be practicing some of what the lean philosophy is all about. If you employ digital printing in your business, "thinking lean" and applying its principles to your workflow will almost surely bring you benefits.Of course, on demand digital printing is, by nature, a quick-changeover manufacturing process. But, other steps that surround it typically are not. If there are binding, trimming, collating, inserting or manual handling steps to be performed on the product, sluggish process changeover of these from one job to another can slow overall production to a crawl. By looking at the overall process of each new job, analyzing the bottlenecks and re-engineering the workflow, time and costs can be saved, meeting the customer's schedule and cost expectations. Even more, by improving the flexibility of using different combinations of those steps in any job, lean time and labor savings can be built right into the workflow, benefitting all future jobs. The result of the commitment to lean thinking can be substantial savings in job time, labor and materials. It can make your business highly successful and profitable. How "Lean Manufacturing" Evolved Years ago, auto-maker Toyota pioneered the concept of an engaged, creative workforce as the foundation of a new manufacturing discipline. The employees performed standardized work on a leveled and balanced production schedule, and they continuously improved their processes. They received the right quantity of inventory in the right mix, at the right time ("just-in-time"), and their goal was to produce products of perfect quality the first time. The entire process was engineered to achieve cost control through the elimination of waste. Over time, the Toyota model evolved into a systematic approach to finding ways to continuously improve manufacturing processes, boost productivity, and smooth workflow, all with emphasis on saving time, labor and materials. Massachusetts Institute of Technology (MIT) researchers called it "a fundamentally new system of manufacturing, encompassing all aspects of industrial operations." In the automobile industry, lean production led to outstanding cost and quality results. Lean principles have since been applied successfully worldwide in many industrial sectors. The Production System Design Laboratory of MIT now defines "lean" as "production design that is aimed at the elimination of waste in every area, including customer relations, product design, supplier networks and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand, while producing top quality products in the most efficient and economical manner possible." What It's All About And How To Get Lean Lean is all about getting the right things to the right place at the right time the first time while minimizing waste and being open to change. Lean can mean less of many things -- less waste, less design time, fewer organizational layers, and fewer suppliers. But lean can also mean "more" -- more employee empowerment, more flexibility and capability, more productivity, more customer satisfaction and long-term, more competitive success. The Five "S" Principles "Lean" starts with the worker and the workspace. No one can do their best work in a messy, cluttered, dirty environment. So, this fundamental part of lean manufacturing "gets down to basics" by focusing on improving the actual space in which work is to be done. Who has not seen a printing shop so crowded that workers can scarcely move? Or, where there is excess inventory on the floor? Or, where the equipment layout actually hinders workflow? Or, where the equipment and workspace are dusty, dirty, and not clean? Or, where workers can't find anything, because it's always lost in the welter of clutter? These are the symptoms that a 5S program is needed to renew the workspace, and instill a "team" sense in employees that self-directs them to keep their work environment in tip-top shape. 5S emphasizes team spirit, cleanliness and organization to develop and sustain a productive work environment. The 5S steps are: (1) Sort: rid the workspace of clutter; (2) Straighten: reorganize the workspace for easy, comfortable use; (3) Scrub: clean everything (floor, equipment, storage, etc.) until it gleams; (4) Standardize: establish methods and schedules for sorting, setting in order and shining the workspace, to keep it that way; (5) Sustain: empower employees to keep their work environment in topnotch condition, through self-discipline, team spirit and a sense of pride. Maximizing Value, Eliminating Waste And Thinking Lean Value is defined as anything that positively influences a product's form, fit, function, quality and cost. Waste, on the other hand, is anything that negatively influences the process of making the product, compromises its qualty, or adds to its cost. Over-production, excessive movement, waiting, too much inventory, over-processing, rework, defective materials, and under-utilized workers all are examples of waste. In a lean enterprise, the value of a specific product is defined only by the customer. The manufacturing process is externally (not internally) focused and ignores internal assets and techniques. The business has been rethought by product line. The entire Value Stream of a product's manufacturing process has been analyzed to reveal: (1) steps that create value; (2) steps that create no value but are necessary; and (3) steps that create no value and can be avoided. By taking out the latter, the "value flow" of the process can be maximized to an optimum flow speed. The process then is designed to fit the product. It is structured so that all activities occur in a continuous flow. The needs of employees are addressed to make the value flow smoothly. The concept is to let the customer "pull" the valued product from the process, as needed (setting an inventory level), rather than "pushing" an undesirable product (excess inventory) on them. Thus, perfect quality, high-value products, as needed, become the norm. Any hidden waste residual in the value stream is exposed. Dedicated product teams find better ways to enhance the flow of value and eliminate waste. The customer "pull" determines "how much inventory?" The system goes toward "perfection: because every action creates value or improvements in the value ratio, speed or inventories. Kaizen The definition of this Japanese word is "unending, gradual refinement in little details." In other words, continuous improvement. It is a commitment to ever-honing and polishing the process to make it work better, to produce products that are better, more competitive, and to adapt the process to changing customer and market requirements. Kaizen practices are creditied with 30%...50%....even 100% increases in productivity without any major increase in capital investment. Under the umbrella of Kaizen, we find a host of change-aiding tools and techniques: a customer-orientation, total quality control (TQC), robotics, QC circles, suggestion system, automation, discipline in the workplace, total productive maintenance (TPM), Kambam (a chit recognizing on-time delivery of J-I-T parts to the next step in the process), quality improvement, just-in-time, zero defects, small group activities, cooperative labor-management relations, productivity improvement, and new product development. All contribute to maintaining a process-oriented view of manufacturing and improvements in these tools and techniques contribute to a better process - and better products. Manufacturers Need To Adopt Lean Thinking As mentioned earlier, "lean" began at Japanese giant, Toyota Motor Works, and it successfully evolved within the eastern culture. Only later was it exported to manufacturing units in western Europe and the United States, but with mixed results. It appears that U.S. manufacturing executives, in particular, have shown reluctance to lay aside manufacturing practices of the past and accept new, lean thinking. As these words are written, despite the continuing, awesome successes of Toyota and others who accept the philosophy that a customer-centric model is the reason for any manufacturing firm's existence and success, top executives of U.S. auto manufacturers continue to pooh-pooh basic lean concepts, such as "just-in-time." Even as they do so, their companies trail Japanese auto makers in productivity and profitability. Also of note: as recently as this year, Toyota invested $1.7 billion in "improvements" to its just-in-time processes. Would any company be likely to spend that kind of money on practices that don't produce results? By contrast, small manufacturing businesses in the U.S. and Europe (including digital printers) have shown the desire to learn everything they can about lean manufacturing and put it into practice without delay. Behind that enthusiasm are nine good reasons: 1. Small businesses have few people -- most already in value-adding jobs. So, there is less "unlearning of old thinking" to get to an understanding of lean thinking. Often, a few days of lean training and shop floor improvement are enough to spread a basic understanding of the process across the organization, so benefits result sooner. 2. Lean thinking says we should "go to the shop floor often and pay special attention to the people who are doing the work." Larger businesses seem to have a hard time doing this. But, small businesses rely more on views from the shop floor, so it's "doin' what comes naturally." 3. There is no greater roadblock to continuous improvement than a person who is fighting to keep a job that's not needed, especially if he's in a management role. Since small businesses already have lean staffing, that's less likely to be a problem. 4. In smaller manufacturers, the entire business process is visible to most employees. There is a likelihood that some cross-training has also taken place. So, smaller manufacturers are able to introduce the process of continuous flow with far less separation between functions than can larger companies. 5. Small manufacturers are typically less structured and regimented than larger companies. It's easier to introduce change. The infrastructure and systems that stabilize large organizations act with enormous inertia to oppose changing to the improvement process. Status quo, when written in a thousand-page, large-company book of policies and procedures, can be an insurmountable obstacle to change. When those policies dictate outmoded measures, such as machine utilization, economic lot sizing or acceptable quality level, it may become a major struggle to show why time should be invested in continuous improvement. 6. Computer systems can become another form of enforcing the status quo in larger companies. When lean thinking says that "the customer should pull production at the same time computer models are pushing batches into the factory," pushing too often wins. Managers frequently complain that they must "work around their ERP systems," in order to create a pull system. Among smaller manufacturers, computer models tend to be less dictatorial. 7. Smaller manufacturers are often privately held and thus not subject to corporate directives and covenants that can disrupt the continuous improvement process. Decision-making can be fast, as can communication of decisions. And certainly, small business owners are closer to the shop floor, so decisions have a greater chance of being based upon direct observation. Continuity, critical to continuous improvement, is usual for smaller shops -- while rather unusual in larger manufacturers. 8. Small companies don't have lots of money. This can be advantageous because it helps them approach lean thinking more effectively: Lean teaches that process improvement arises from identifying and eliminating waste from a process -- an effort that frequently requires little investment. Yet, traditional thinking will tempt us to mechanize or automate to achieve improvement. That temptation is proportional to budget money available. Lean teaches to simplify first, lest you run the risk of automating a wasteful activity. 9. Small companies don't have lots of time. While this may hardly seem like an advantage, the lack of free time enables small firms to change over to lean very quickly. Most large companies will seem to need "forever" to change, because of inertia and status quo. Small, nimble companies can boost the productivity and profitability of their processes, while larger competitors stumble, trying to get their act together. Getting To Lean The timetable for becoming a lean thinking business can stretch from months to years, depending upon the nature and size of your business. Because it will touch every aspect of your business and alter the ways people make decisions, behave and interact, it is best to bring in a "change or conversion agent" who can provide the counselling, training and specific knowledge required to become lean. The actual design of the business is your decision, of course, and can proceed at any pace you set. But the results of putting it into effect should not only be tracked on a milestone chart, but measured through your customers, as well. Increases in customer satisfaction and productivity, increases in your company's ability to survive and thrive in any business environment, and improvements in your financial picture without major investment all will soon confirm that your effort to be "lean and mean" is really paying-off. A Case In Point: PRIDE Industries, Inc. PRIDE Industries is a diversified contract manufacturing firm headquartered in Roseville, California, USA. The company's annual revenue grew 10%, to nearly $87 million, in the fiscal year ended July 2002. Its many-faceted contract manufacturing operations were carried out at facilities in nine states, where nearly 4,300 people are employed, making products largely sold under other companies' identities. Contract manufacturing enables manufacturers to scale-up their production on-demand. PRIDE supplies the facilities and labor PRIDE is a nonprofit company and its mission is simple and unchanging: to create jobs for people with disabilities. Of particular note: more than 2,800 of its employees are people who typically would have been excluded from employment because of a disability or some other barrier to employment. Yet, the company continues to experience tremendous success because of the products and services its business units deliver to customers. Part of this success results from PRIDE's brilliant implementation of lean manufacturing. Steve Twitchell, Business Development Manager explains, "PRIDE is in the business of product transformation. We turn raw materials into finished goods for our customers. Interestingly enough, the only dynamic that changes from one job to another is "what are you doing to accomplish this?" Now, since we have a direct labor force that is challenged, we really task our engineering team to come up with processing, fixturing, templates and other advances that we can add to the assembly line to really enhance every employee's performance. Quality is not a separate function, but built right into every process We align the process with each employee's specific challenge, so that the process is engineered, but human-focused, too." Training is also intensive. "We use a wide variety of training methods to ensure that every employee precisely understands what is to be done and what is the optimum way to do it. Training is one of the essential details of 'running lean.' But, because of our employees' challenges, we have a built-in need to train our people to perfection. In this way, they get genuine satisfaction from doing a job well, while production efficiency is always maximized. The fine-tuned engineering of our process is the value we add to our manufacturing." PRIDE also uses customer data and supply chain management techniques to control the inflow of materials needed for production, saving time and keeping employees constantly busy. "No one is ever sitting around waiting for goods to arrive and we maximize inventory turns," Twitchell says. The result of all this is a lean enterprise that is constantly busy, turning-out reasonably priced, high-quality products for repeat customers, and earning good paychecks for individuals whose disabilities have been completely neutralized by careful process engineering. Twitchell comments, "We tend to run as lean as possible on every job, but we have waiting lists of people hopeful of becoming employees. So, it is easily possible for us to scale-up nearly immediately to meet any demand from our customers. We simply re-engineer the process to fit the larger workforce." One of PRIDE's business units specializes in direct-mail marketing and fulfillment. It provides turn-key contract services to customers, including any mix of designing and digital printing of marketing literature, personalizing letters and mailing pieces, as well as inserting, addressing and mailing. HealthNet, a provider of health care services to former military personnel, is a PRIDE customer. All of its marketing, enrollment and fulfillment work is handled by PRIDE. A great many waves of direct mail go out throughout the year to thousands of HealthNet subscribers and prospects, with all services provided by PRIDE. Twitchell explains, "We use high-speed Canon digital printers with variable-data capabilities. These allow us to pre-print and send out enrollment documents daily, adding variable-data from each individual's region and file, as needed. Our information technology team manages and safeguards all confidential data that goes into each household's enrollment kit. We also use special database software that analyzes different household make-ups, genders, military branches and social security numbers and consolidates multiple forms going to one address into one envelope. This results in very substantial postage savings to our customer. As a result, we are able to assemble and send truly 'custom' kits to every household." The kits also include HealthNet color literature, designed by PRIDE, then printed and finished on the Canon digital printers and inserted into each envelope. The end result is true, custom assembled enrollment kit packages, mailed to each and every address. All components of each mailing package are assigned SKUs, so that they can be retrieved and re-used or updated for subsequent mailings. PRIDE typically works with HealthNet on an annual contract basis, although it has the flexibility to handle one-time fulfillments, when required. Twitchell concludes, "PRIDE strives to exemplify lean thinking in all its manufacturing processes. We find digital printing an ideal fit in those processes. We feel that all our core competencies contribute to the success of those processes and we apply our efforts to continuously improve every detail of what we do." Take Away * Lean manufacturing is an evolving, dynamic process of production covering the total enterprise. * It is governed by a systematic set of principles, methods and practices. * It embraces all aspects of industrial operations (product development, manufacturing, organization, human resources, and customer support). * It includes customer and supplier networks. * Lean production combines the best features of craft production (high-quality, individualized, custom-made products) and mass production (manufacturing at great quantities to satisfy broad consumer needs at lower prices). * Chief benefits of lean production include the use of fewer resources, rapid and efficient product development cycles, higher quality at lower cost, and greater flexibility. * Within a true, lean manufacturing operation, one might expect to encounter zero inventory and zero waiting time; scheduling based on "customer pull" instead of "push;" batch to flow, reduced batch sizes; line balancing; actual reductions in process times; perfect first-time quality through a continuous quest for zero defects; revelation and solution of problems at their sources; simultaneous achievement of higher quality and productivity; teamwork and worker empowerment; waste minimization by removing all non-value added activities; making the most efficient use of scarce resources (capital, people, space); just-in-time inventory, eliminating any "safety nets;" continuous improvement (reducing costs, improving quality, increasing productivity) through a dynamic process of change; simultaneous and integrated product/process development; rapid cycle time and time-to-market; openness and information sharing; flexibility in producing different mixes or greater diversity of products quickly without sacrificing efficiency at lower volumes of production, through rapid set-up and manufacturing in small lot sizes; long-term relationships between suppliers and primary producers (assemblers, system integrators) through collaborative risk-sharing, cost-sharing and information-sharing arrangements. * In the case cited, careful engineering of manufacturing processes involving digital printing effectively nullifies any disabilities of employees performing the work. The resulting productivity, efficiency and quality of its production place this contract manufacturing firm among the top performers in its region.