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lean manufacturing

The Lean Benchmark Report: Closing the Reality Gap (.PDF Download)

March 27, 2006

Lean manufacturing processes have revolutionized the way that many leading enterprises deliver products to their customers and manage their supplier relationships.

Over the past few years, the use of Lean techniques has expanded well beyond the automotive industry to delivering dramatic results into other sectors including aerospace, consumer goods, and industrial equipment among others. Although C-level executives are enthusiastic about the benefits that can be derived by “Leaning out’” operations, this study uncovered a large performance gap between those companies that are simply using Lean techniques on the shop floor versus those that have built a culture based on Lean thinking.

Key Business Value Findings

Of the close to 300 manufacturers that participated in this study, 90% reported that they are committed to Lean. However, further analysis found that less than 20% of these companies can be considered best-in-class.

Companies that have achieved operational excellence through the deployment of a Lean strategy share three key characteristics:

  • Dedication to basics such as streamlining processes, creating a well-ordered work environment, and ongoing continuous improvement programs (Kaizen).
  • Lean processes have been rationalized and streamlined; Lean techniques have been memorialized and a ‘single version of the 'truth' is ubiquitous via a technology infrastructure that supports manufacturing, the enterprise, and the supplier base.
  • Lean principles are reflected in the corporate strategy, on the senior leadership team, as well as throughout manufacturing and the company.

Implications & Analysis

For those companies willing to make the commitment, Lean pays dividends in both the short and long term. It has exceeded the expectations of 25% of best-in-class companies in areas such as customer service and flexibility.

Industry sectors benefiting the most include automotive, industrial equipment, and metals. In addition, technology solutions are playing an increasingly important role in Lean. The ability to monitor and measure key control points and processes in real-time is enabling best-in-class companies to meet and exceed performance goals.

Also, ERP, Lean Specialty/MES, and homegrown solutions provide the foundation from which companies can institutionalize processes, improve productivity, prepare for new product launches, and drive culture change throughout the company and supplier base.

Recommendations for Action

Based on survey participants’ responses, Aberdeen has divided manufacturers into three categories according to our competitive framework:

  1. Best in class (those who have embraced Lean and made it part of their corporate culture)
  2. Industry average (companies that have implemented Lean in some facets of the business but have yet to complete the journey)
  3. Laggard (those who are just learning about Lean and/or are meeting with some resistance)

Here are our recommendations for each group:

  • Best in class: Raise the performance bar with Lean Six Sigma; balance long-term strategy and short-term profit objectives; improve supplier collaboration; sustain Lean momentum and culture.
  • Industry average: Create a culture of Lean; implement TPM (total productive maintenance program); conduct Kaizen Blitz workshops.
  • Laggard: Map the value stream from customer to suppliers; improve organization of the work environment; implement basic Lean production techniques; prepare for more frequent and more stringent product launches.