A look at where lean stands in electronics manufacturing.
Both lean and six sigma are terms associated with manufacturing in all its forms for a number of years. Whilst Henry Ford began to design his assembly lines in 1910s on flow production principles, it is recognised lean as we know it today started with the development of the Toyota production system (TPS) in the 1940s.
In the face of continual customer pressure for cost reduction, performance improvement and to maintain competitive advantage, it has become a necessity for electronics manufacturers to drive continuous improvement in their business performance.
Electronics companies who have successfully integrated lean six sigma into their organisations hav
e learned developing a lean six sigma culture is not just about the tools and techniques. It is more importantly about involving everyone in their business to help drive the change.
Undoubtedly the benefits of lean six sigma can be attributed to the effective use of lean six sigma methodology, principles and tools.
However, sustainability can only be achieved by creating a culture of employee engagement where people at every level of the organisation embrace and believe in the change.
This not only involves employees participating in kaizen activity. It is also about job satisfaction, job variety, job relevance, understanding of business vision and strategy, personal development, reward and recognition, but most importantly, listening and acting upon the voice of the employee. This approach takes a significant amount of time and, to be successful, requires an understanding of change psychology and the human reaction to change. However, it is the key to driving sustainable change, though it can require time and effort with little immediate return.
Many manufacturing companies have tried to replicate the Toyota lean principles without considering the psychological impact of issues, such as implementing new working methods, will have on their employees. This has led to a failure to sustain lean six sigma. To prevent this it is critical for the executives and leaders who are driving the change in operating philosophy towards lean six sigma to understand about the human reaction to change. This reaction directly impacts the effective management of how these changes are introduced and will ultimately define whether implementation is successful.
Surprisingly, every year industry spends millions of dollars educating
people how to use lean six sigma tools and techniques, but there is less emphasis placed upon equipping change leaders or agents to deal with the human side of change. It is people who will make the change happen. Therefore, educating the change leaders it will provide immense benefit to the user.
Understanding and effective management of the influences driving organisational culture is another critical success factor that needs to be addressed in the overall context of moving a company towards lean six sigma adoption. Organisationa
l culture is influenced by the dominant leader/leadership style, national/local culture, business size/demographics, existing business practices and type of products or services.
Convincing the dominant leader or leaders is an essential step in gaining executive sponsorship for cultural change but, to be successful, all of the other cultural influences need to be addressed. The introduction of cultural awareness programmes for executives, change leaders and managers is used by some companies to create understanding and competence in this area.
Another area of debate is the confusion as to whether lean or six sigma is the better way forward. In reality the two are complementary. Lean is focused on identifying value in the eyes of the customer (what they are prepared to pay for) and removal of waste (what they are not willing to pay for). Whereas six sigma takes a structured approach to reducing variation in processes to ensure products are manufactured without defects.
As business models and technology become more complex and time to market expectations are reduced, a company wishing to maintain a competitive advantage needs to embrace the application of both lean and six sigma principles. This should be introduced throughout the entire organisation and through the product life cycle from design through to obsolescence.
Within the electronics manufacturing arena improvement focus areas will ultimately differ, depending upon the dynamics of the business. For example, reducing the cycle time of a product by one second in a low mix high volume environment will produce a significant benefit. Conversely, in a high mix low volume environment the same approach will produce minimal benefit and the focus will be more around driving optimisation of equipment changeovers.
The question is how far does each company take it and what does the future of lean six sigma hold for
Over the last 30 years, the manufacturing industry globally has increasingly driven to be more effective and reduce operating costs. Consequently, lean six sigma improvements within the manufacturing area itself do not typically present as big an opportunity as those found in the rest of the value stream. Increasingly the emphasis in mature LSS manufacturing operations has been around achieving zero defects (especially in the aerospace, defence and medical sectors) and creating products that can be manufactured on processes engineered to run an optimal capability level and produce little, if no, variation. the electronics industry?
Consequently this has switched the emphasis for designers to focus on design for lean six sigma and create defect free products; equipment suppliers to develop processes that can operate at six sigma quality levels and suppliers to provide components and materials that fall within six sigma quality levels.
Despite this focus there is still a lot of room for improvement. Electronics manufacturers who still employ receiving inspection and testing of purchased product as a means of protecting customers from receiving poor quality need to review their whole supplier development strategy from a lean six sigma perspective. The emphasis in this area has to be to drive improvement back into the supply base and engineer in the quality of supplied product and consequently reduce the need to inspect and test.
Supply chain management is increasingly being focused upon and is a key area with a significant impact on the value stream. Lean six sigma development of the supply chain can lead to significant benefits in many areas; e.g. improved delivery performance, inventory reduction, inventory holding space reduction, reduction of working capital, cash cycle improvement and lower operating margins.
Waste and variation are everywhere. They exist in every process and every interaction between humans, systems and functions. They create performance issues, soak up cost and affect customer satisfaction, health and safety and potentially job security.
Adoption of lean six sigma principles goes a long way towards identifying and removing waste and variation; but to be sustainable, we need to ensure we create an environment where continuous improvement is a part of the organisational culture. Only then will lean six sigma be successful within electronics manufacturing.
On a final note; after over 70 years of lean at Toyota, the company still believes it has a long way to way to go to remove waste entirely from its value streams. So there is a lot of room for further improvement within electronics manufacturing.