strategy

Embedding Lean Manufacturing: A Blueprint for Manufacturers’ Success

Posted on by Adam Payne

As a manufacturing professional in the UK, you’re likely all too familiar with the constant pressure to improve efficiency, reduce costs, and stay competitive in an increasingly global marketplace. Over the years, I’ve worked with numerous British manufacturers who have faced these challenges head-on, and time and time again, I’ve seen one approach stand out as a game-changer: lean manufacturing.

Lean manufacturing isn’t just another buzzword or passing trend. It’s a proven methodology that has transformed industries worldwide, and it’s particularly relevant for UK manufacturers looking to thrive. In this post, we’ll explore the essential steps to embed lean manufacturing in your business and highlight why so many manufacturers are embracing this approach. We’ll also look at some inspiring success stories that demonstrate the transformative power of lean principles.

Essential Steps to Implement Lean Manufacturing

Implementing lean manufacturing is a journey, not a destination. It requires commitment, patience, and a willingness to challenge the status quo. Here are the key steps you’ll need to take to successfully embed lean principles in your organisation:

a) Align your organisation around lean principles

The first and perhaps most crucial step is to ensure that everyone in your organisation understands and buys into the lean philosophy. This means educating your team about the core principles of lean manufacturing, such as:

  • Identifying and eliminating waste
  • Continuous improvement (Kaizen)
  • Respect for people
  • Creating flow in processes

In my experience, resistance to change is one of the biggest hurdles in implementing lean. That’s why it’s essential to communicate the benefits of lean manufacturing clearly and consistently. Emphasise how it can make everyone’s job easier, more satisfying, and more secure in the long run.

b) Map the value stream to identify waste

Value stream mapping is a powerful tool that helps you visualise your entire production process, from raw materials to finished product. By creating a detailed map, you can identify areas of waste, inefficiency, and bottlenecks.

I once worked with a UK-based casting manufacturer who was struggling with long lead times. Through value stream mapping, we discovered that components were spending an average of 15 days in various queues throughout the production process. By addressing these queues, we were able to reduce lead times by over 50%. (Reducing Lead-time Case Study)

c) Create flow and pull systems for smoother operations

Once you’ve identified areas of waste, the next step is to create flow in your processes. This means arranging your production line so that work moves smoothly from one step to the next, without unnecessary stops or delays.

Pull systems, such as Kanban, can be particularly effective in creating flow. Instead of pushing products through the system based on forecasts, pull systems produce items based on actual customer demand. This reduces inventory, improves cash flow, and ensures you’re making what customers actually want.

d) Utilise lean tools like 5S, Kanban, and Six Sigma

Lean manufacturing offers a variety of tools and techniques to help you improve your operations. Some of the most effective include:

  • 5S (Sort, Set in order, Shine, Standardise, Sustain): A method for organising workspaces for efficiency and effectiveness.
  • Kanban: A visual system for managing work-in-progress and scheduling production.
  • Six Sigma: A data-driven approach to eliminating defects and reducing variability.

e) Foster a culture of continuous improvement

Lean manufacturing is not a one-time project; it’s an ongoing process of continuous improvement. Encourage your team to constantly look for ways to eliminate waste and improve processes. Implement a system for collecting and acting on employee suggestions.

f) Implement technology and automation to enhance lean processes

While lean manufacturing originated before the digital age, modern technology can significantly enhance its effectiveness. Consider implementing an Manufacturing Execution Software (MES) systems like FactoryIQ to improve visibility across your operations, or explore how Industry 4.0 technologies like IoT sensors and data analytics can support your lean initiatives.

Why Manufacturers Embrace Lean Manufacturing

Now that we’ve covered the ‘how’, let’s look at the ‘why’. There are compelling reasons why manufacturers across the UK are embracing lean principles:

a) Significant improvements in efficiency and productivity

Lean manufacturing can lead to dramatic improvements in efficiency and productivity. By eliminating waste and streamlining processes, you can produce more with less. I’ve seen manufacturers increase their output by 30% or more without adding additional resources.

b) Substantial cost reductions through waste elimination

Waste is expensive. By identifying and eliminating the eight types of waste (defects, overproduction, waiting, non-utilised talent, transportation, inventory, motion, and extra-processing), lean manufacturers can significantly reduce their costs. This is particularly crucial for UK manufacturers facing increased competition post-Brexit.

c) Enhanced customer value and satisfaction

Lean manufacturing isn’t just about cutting costs; it’s about delivering more value to your customers. By focusing on what the customer truly values and eliminating everything else, you can improve quality, reduce lead times, and enhance overall customer satisfaction.

d) Environmental benefits from reduced resource consumption

With the increasing environmental awareness, lean manufacturing offers significant sustainability benefits. By reducing waste and improving efficiency, you’ll naturally reduce your consumption of energy and raw materials. This not only helps the environment but can also improve your company’s image and appeal to environmentally conscious customers.

e) Competitive advantage in the marketplace

Being lean can give you a significant competitive edge. The ability to deliver high-quality products quickly and at competitive prices can help you win new customers and retain existing ones.

f) Increased employee engagement and morale

When implemented correctly, lean manufacturing can significantly improve employee satisfaction. By involving employees in problem-solving and continuous improvement, you empower them and make their work more engaging. This can lead to higher retention rates and a more motivated workforce.

Real-World Success Stories

Let’s look at some inspiring examples of companies that have successfully embedded lean manufacturing principles:

Caterpillar Inc.’s lean journey and results

Caterpillar’s lean journey offers valuable lessons for manufacturers of all sizes. The company began implementing lean principles in the early 2000’s and has since seen remarkable results. Including the formalisation of its Caterpillar Production System which launched in 2005, and a strategic initiative to establish an enterprise-wide lean vision in 2012.

John Deere’s efficiency gains through lean principles

Another global manufacturer with operations in the UK, John Deere, has been on a lean journey since the 1990s. The company has reported significant improvements in productivity, quality, and employee satisfaction. In one facility, John Deere reduced the time to manufacture significantly through lean principles.

General Electric’s inventory reduction and quality improvements

GE’s adoption of lean principles, combined with Six Sigma, led to substantial improvements across its diverse business units. The company reported saving billions of dollars and significantly improving product quality.

While these are large multinational companies, I’ve seen similar results in smaller UK manufacturers. For instance, a medium-sized automotive parts manufacturer in the Midlands implemented lean principles and saw a 40% reduction in lead times and a 25% increase in productivity within 18 months.

Toyota’s pioneering lean practices

Toyota is often credited with pioneering lean manufacturing through its Toyota Production System (TPS). The company’s focus on continuous improvement and respect for people has led to unparalleled efficiency and quality. Toyota’s lean practices have been emulated by manufacturers worldwide, proving that lean principles can be adapted to various industries and scales.

Rolls-Royce’s lean transformation

Rolls-Royce, a renowned UK manufacturer, has also embraced lean manufacturing. By implementing lean principles, Rolls-Royce has achieved significant improvements in production efficiency and product quality. The company has reduced lead times, cut costs, and enhanced customer satisfaction, solidifying its position as a leader in the aerospace industry.

Conclusion

Embedding lean manufacturing is indeed a transformative process that can revolutionise your manufacturing operations. In following the key steps outlined – aligning your organisation, mapping value streams, creating flow, utilising lean tools, fostering continuous improvement, and leveraging technology – you can achieve significant improvements in efficiency, cost reduction, and customer satisfaction.

The benefits of lean manufacturing are clear and compelling. From improved productivity and reduced costs to enhanced customer value and environmental benefits, lean principles offer a pathway to long-term success and competitiveness.

As you embark on your lean journey, remember that it’s not about achieving perfection overnight. It’s about making consistent, incremental improvements that add up to significant results over time. Start small, celebrate your wins, learn from your setbacks, and keep pushing forward.

In the face of global competition and economic uncertainty, lean manufacturing offers UK manufacturers a proven approach to not just survive, but thrive. By embracing these principles, you can position your company for success in the years to come, driving innovation, efficiency, and growth in the ever-evolving manufacturing landscape.

Remember, the journey to lean manufacturing is challenging, but the rewards are well worth the effort. So, are you ready to start your lean journey and transform your manufacturing operations? The time to act is now. Embrace lean manufacturing and unlock the full potential of your business. By doing so, you will not only enhance your operational capabilities but also ensure a sustainable and prosperous future for your company in the competitive global market.

From Waste to Worth: Embracing Lean Manufacturing to Maximise Efficiency and Profits

Posted on by Adam Payne

Have you ever had the nagging feeling that your manufacturing business could be doing better? That despite your best efforts, you seem to be stuck in a rut, spinning your wheels without making significant progress, and watching as precious resources are squandered? You’re certainly not alone in this struggle. Across the UK, numerous small manufacturers grapple with the challenge of maximising efficiency and eliminating unnecessary costs that eat into their hard-earned profits. But there’s no need to despair because there is a powerful solution within reach that can totally transform your operations: the lean manufacturing approach.

Lean manufacturing isn’t just a set of tools or a temporary fix; it’s a comprehensive philosophy that, when embraced, can unlock the hidden potential in your business and turn what was once considered “waste” into pure gold. Allow me to guide you through this transformative philosophy and show you how to unleash a leaner, meaner, and more profitable manufacturing machine.

The Lean Mindset: Identifying and Eliminating Waste

At the very heart of lean manufacturing lies the relentless pursuit of waste elimination. But to tackle waste, we must first understand what it is. Waste in the manufacturing context can take many forms, such as overproduction, excess inventory, inefficient processes, unnecessary movements, waiting times, and defective products. Essentially, waste is anything that does not add value to your final product or service.

Developing a keen eye for waste is akin to developing a new sense of perception. It’s like decluttering your home – once you start identifying the unnecessary clutter, you begin to see it everywhere. And just like decluttering, eliminating waste in your manufacturing process can be incredibly liberating and empowering. It frees up space, resources, and energy, allowing you to focus on what truly matters: delivering value to your customers.

The Lean Toolbox: Unleashing Efficiency

With a clear understanding of what constitutes waste, the next step is to apply the power of lean manufacturing techniques. These tried-and-true tools are designed to streamline your operations and maximise efficiency. Let’s delve into a few of the game-changers that can revolutionise the way you work:

  1. Value Stream Mapping: This powerful technique allows you to visualise the entire flow of your manufacturing process, from raw materials to the finished product. By mapping out the value stream, you can identify bottlenecks, inefficiencies, and areas ripe for improvement. It’s a tool that provides a bird’s-eye view of your operations, highlighting where time and resources are being wasted and where the flow of production can be smoothed out.
  2. 5S: This lean principle (Sort, Set in Order, Shine, Standardise, Sustain) is all about creating a clean, organised, and efficient workspace. By implementing 5S, you’ll not only improve safety and productivity but also instil a sense of pride and ownership in your team. Each ‘S’ plays a crucial role: Sorting ensures that only necessary items are kept, Setting in Order arranges tools and materials for optimal workflow, Shining keeps the workspace clean, Standardising creates consistent methods and practices, and Sustaining ensures that these new standards are maintained over time.
  3. Just-in-Time Production: Say goodbye to excessive inventory and hello to a leaner, more agile manufacturing process. Just-in-Time (JIT) production ensures that you produce only what’s needed, when it’s needed, minimising waste and freeing up valuable resources. This approach requires precise planning and communication but, when executed correctly, can significantly reduce costs associated with storage and spoilage while ensuring that your products are always fresh and in line with current market demands.

Engaging Your Team: The Secret Sauce

The implementation of lean manufacturing techniques is just the beginning. To truly unlock the full potential of lean, you need to engage and empower your team. After all, your employees are the ones on the front lines, witnessing inefficiencies and waste firsthand.

Encourage your team to identify areas for improvement and share their ideas openly. Foster an environment where everyone feels valued and heard. When your employees feel invested in the lean process, they’ll become your biggest advocates and drivers of continuous improvement. This engagement leads to a more motivated workforce, one that takes initiative and pride in their work.

The Continuous Improvement Mindset: Lean is a Journey, Not a Destination

Lean manufacturing is an ongoing process, not just a single initiative. It requires a steadfast commitment to continuously identifying and eliminating inefficiencies and waste. To thrive, foster a culture of perpetual improvement where all team members proactively seek ways to refine processes and reduce waste.

Consider this as a constant cycle of enhancements, with each phase moving you towards a more streamlined, efficient, and profitable production process. This approach is essential as it keeps pace with ever-changing market conditions and technological advancements. By nurturing this dynamic culture, your business remains flexible, competitive, and at the forefront of industry developments.

The Benefits: Turning Waste into Worth

By embracing the lean manufacturing approach, you’ll unlock a host of benefits that can transform your small manufacturing business:

  1. Cost Reduction: By cutting out waste and enhancing efficiency, we directly lower our operational expenses, boosting our profit margins. Who isn’t pleased with more savings? These funds can be funnelled back into the company, propelling growth, spurring innovation, and enabling continuous enhancements.
  2. Quality Enhancement: Applying lean methodologies to pinpoint and rectify flaws boosts the quality of products, much to the delight of customers, thus delivering a dual benefit. This consistency in quality cultivates trust and loyalty, both of which are essential in the competitive landscape of today.
  3. Boost in Competitiveness: Speed and adaptability are crucial in the modern market, and lean manufacturing positions you to keep pace with market trends and supply products with more efficiency, giving your business a vital advantage over competitors. This nimbleness also makes adapting to shifts in customer tastes and market dynamics smoother.
  4. Employee Morale and Retention: Incorporating your team in the lean journey and valuing their input instils a sense of ownership and pride in their work. The outcome? Elevated job satisfaction and diminished staff turnover, particularly vital for smaller businesses. When employees feel engaged, they’re likelier to commit long-term to your company, cutting down the cost and interruption high turnover can create.

Embrace the Lean Mindset: Your Call to Action

Small manufacturers in the UK, the time has come to embrace the lean manufacturing approach and unlock the hidden potential within your operations. It may require an initial investment of time and resources, but the potential rewards are too significant to ignore.

Take the first step today by identifying areas of waste and inefficiency within your manufacturing process. Engage your team, implement lean techniques, and cultivate a culture of continuous improvement. Before you know it, you’ll be turning what was once considered “waste” into pure worth, propelling your small manufacturing business towards a leaner, more efficient, and more profitable future.

Embrace the lean mindset, and watch as your manufacturing operation transforms into a well-oiled, value-maximising machine. The time to unlock your hidden potential is now.

The Lean Transformation: A Detailed Roadmap

To embark on this lean journey, it’s essential to have a clear roadmap. This roadmap will guide you through the various stages of lean implementation, ensuring that you don’t miss any critical steps and that you can measure your progress along the way.

Stage 1: Assessment and Planning

The first stage involves a thorough assessment of your current operations. You need to understand where you are before you can chart a course to where you want to be. This assessment should be as comprehensive as possible, covering all aspects of your manufacturing process, including supply chain management, production, quality control, and delivery.

Once you’ve identified the areas that need improvement, it’s time to plan. Set clear, achievable goals for your lean transformation. These goals should be specific, measurable, attainable, relevant, and time-bound (SMART). With these goals in place, you can develop a step-by-step plan to achieve them, assigning responsibilities and deadlines to ensure accountability.

Stage 2: Training and Empowerment

Lean manufacturing is as much about people as it is about processes. For your lean transformation to be successful, your team must be fully trained in lean principles and techniques. Invest in comprehensive training programs that not only teach the tools of lean but also instill the philosophy behind it.

Empowerment is equally important. Your employees should feel confident in suggesting improvements and taking the initiative to solve problems. This empowerment can be fostered through regular team meetings, suggestion schemes, and recognition programs that celebrate the contributions of your staff.

Stage 3: Implementation and Monitoring

With your team trained and empowered, you can begin implementing the lean techniques you’ve chosen. Start with pilot projects or specific areas of your operations to test the effectiveness of the changes and to build momentum for a wider rollout.

Monitoring is critical during this stage. You need to track the impact of your lean initiatives to ensure they are delivering the desired results. Use key performance indicators (KPIs) to measure progress against your goals. These KPIs might include metrics such as production cycle times, defect rates, inventory levels, and employee engagement scores.

Stage 4: Review and Adjust

Lean is an iterative process. After implementing changes, take the time to review the outcomes. What worked well? What didn’t? What unexpected challenges arose? Use this information to adjust your approach and refine your processes.

This stage is also an opportunity to celebrate successes and to learn from failures. Both are invaluable in building a resilient and adaptable organisation.

Stage 5: Standardisation and Replication

Once you’ve found what works, standardise those processes so that they become the new norm. Document best practices and ensure that they are followed across your entire operation.

After standardising successful practices, replicate them in other areas of your business. This replication can lead to significant improvements across your organisation, multiplying the benefits of your lean transformation.

Stage 6: Sustaining the Gains

The final stage is about sustaining the gains you’ve made. Lean is not a set-it-and-forget-it approach; it requires ongoing attention and effort. Continue to monitor your KPIs, engage with your team, and look for new ways to improve.

Remember, the landscape of manufacturing is always changing. New technologies, materials, and market demands will present new challenges and opportunities. By maintaining a lean mindset, you can ensure that your business remains flexible, efficient, and competitive for years to come.

Key Takeaways

Transforming into a lean manufacturing enterprise comes with its hurdles. It demands dedication, strict adherence to principles, and openness to transformation. However, the benefits are undeniable: lower expenses, enhanced product quality, a boost in competitive edge, and a workforce that’s more involved and committed.

Being a UK-based producer, you stand at a pivotal moment to effect profound changes in both your enterprise and your sector. By adopting lean manufacturing practices, you can tap into the dormant capabilities of your processes, steering your company towards a future that’s streamlined, high-functioning, and financially rewarding.

The time to act is now. Embrace the lean mindset, engage your team, and start your journey towards excellence. Your business, your employees, and your customers will thank you for it. The transformation that awaits is not just about cutting costs or increasing efficiency; it’s about reimagining what your business can achieve. Lean is the key to unlocking a future where your manufacturing business doesn’t just survive but thrives.

Conquering Disruptions in Manufacturing: The Power of Supply Chain Resilience and Advanced Technology

Posted on by Adam Payne

With a global economic landscape that’s increasingly volatile, unpredictable, complex, and ambiguous (VUCA), modern businesses are continually challenged by unexpected disruptions. In the realm of manufacturing, such disturbances have enormous implications for supply chains, often leading to substantial business impact. Herein lies the importance of devising ‘Supply Chain Resilience’—a systemic capability focused on building an adaptable manufacturing network that can flex in response to disruptive events, and swiftly bounce-back to a steady operational state.

This article offers in-depth insights into the crucial strategies for crafting a resilient, flexible, and adaptive manufacturing network, with a particular emphasis on the role of technology such as Radio Frequency Identification (RFID) in bolstering resilience.

Operational Silos: The First Barrier to Overcome

A resilient and agile manufacturing supply chain necessitates a holistic vantage point. This requires breaking down operational silos to enhance inter-function cooperation, promote information transparency, and facilitate seamless information exchange across the value chain. By integrating supply chain-related functions into strategic decision-making processes, businesses can achieve disparate yet synergistic responses during times of disruption, thereby reinforcing resilience.

Flexible and Responsive Strategies: The Backbone of Resilience

Resilience fundamentally revolves around the principles of flexibility and responsiveness. Sticking to traditional, static supply chain frameworks can leave businesses floundering in the face of uncertainty. Therefore, integrating flexibility and responsiveness into supply chain strategies can help alleviate potential disruptions and proactively manage risks.

These strategies allow manufacturing leaders and supply chain executives to not only react swiftly and effectively to changes but also anticipate disruptions and prepare their response well in advance. Adaptive supply chain networks can mitigate the effects of unexpected events, be it temporary interruptions like COVID-19 or more systemic shifts such as evolving consumer behaviours or regulatory changes.

Six Pillars of Supply Chain Resilience

To construct a resilient supply chain, businesses should consider the following six strategic pillars:

  1. Inventory and capacity buffers: This strategy involves having excess production facilities or inventory above the safety stock requirements. With these buffers in place, companies can better manage uncertainties and maintain supply chain continuity during disruptions.
  2. Diversified Manufacturing & Supply Chain Footprint: Through distributing sourcing and manufacturing facilities across different geographical areas, businesses can mitigate the impacts of local disruptions, enabling continuity despite regional crises.
  3. Product design strategy: By focusing on flexible and modular product designs, manufacturers can reduce supply chain complexity and better accommodate changes with minimal operational disruption.
  4. Visibility: This principle emphasises the necessity to monitor, track, and have a comprehensive understanding of the entirety of the supply chain. Real-time visibility enables proactive risk identification, better decision making, and rapid response to unexpected events.
  5. Collaboration: This involves fostering partnerships and collaboration among various stakeholders in the supply chain, from suppliers and manufacturers to distributors and customers. Enhanced collaboration can improve overall efficiency and responsiveness, making networks more resilient and adaptable.
  6. Supply Chain Risk Management: This approach deals with identifying, quantifying, and mitigating supply chain risks. A robust risk management framework can impede potential interruptions before they escalate, thereby ensuring business continuity.

The Role of Technology in Promoting Supply Chain Resilience

In the digital era, technology plays a pivotal role in fortifying supply chain resilience. Technological advancements like RFID, artificial intelligence (AI), machine learning, and blockchain can offer transparency, agility, real-time tracking, and foresight into the supply chain operations.

For instance, during the early stages of the pandemic, Nike exemplified the power of technology as a resilience-booster by accelerating a program utilising RFID technology. This offered real-time tracking of products flowing through outsourced manufacturing operations, thereby improving visibility, and allowing swift responses to disruptions.

Key Takeaways

As complexity and uncertainty continue to dominate the global manufacturing landscape, the creation of a resilient supply chain is no longer a fancy buzzword—it’s a necessity for survival and growth. By adopting flexible strategies, fostering a collaborative ecosystem, integrating advanced technology, and zealously monitoring risks, businesses can build a truly robust and resilient supply chain.

Future supply chain resilience will undeniably hinge on continuous innovation, implementation of emerging technologies, and the leadership’s commitment to learning from disruptions rather than merely surviving them. In this era of VUCA, the mantra for all manufacturing companies should be—adapt, be resilient, or risk being left behind.

💡PS: If you’re a Manufacturer looking to Reduce Costs, Foster Innovation and Accelerate Growth please do get in touch with us to discuss more. – Give us a call or send a message here.

Hoshin Kanri Strategic Planning Process: The Key to Driving Growth and Performance

Posted on by Adam Payne

In today’s highly competitive and ever-changing business environment, manufacturers need an effective way to align their teams and departments towards a unified strategic objective. The Hoshin Kanri Strategic Planning Process, originating in Japan, may just be the perfect answer to achieving this coherence. In this blog post, we will explore what Hoshin Kanri is, why it was developed, how you can implement it, and how it can help you align your team’s goals into an overarching strategy.

What is the Hoshin Kanri Strategic Planning Process?

Hoshin Kanri, which translates to “compass management” or “policy deployment,” is a strategic planning process designed to help organisations define their strategic goals, allocate resources, and ensure continuous improvement in their performance. It involves a top-down and bottom-up approach, with senior management setting the strategic direction and all levels of management/employees through-out the business implementing the strategy and delivering results.

Why was Hoshin Kanri developed?

The Hoshin Kanri process traces its origins to the 1950/60s when Japanese companies needed a method to effectively integrate innovation, continuous improvement, and long-term planning. The methodology was born out of Japanese management culture and, at its core, emphasises collaboration, communication, and organisational alignment. Over the years, the adoption of Hoshin Kanri has spread worldwide, thanks to its ability to link strategic goals with everyday operations.

How to implement the Hoshin Kanri Strategic Planning Process

Implementing Hoshin Kanri involves several steps:

  1. Establish strategic goals: Senior management identifies the organisation’s strategic objectives, which should be derived from the company’s vision and mission.
  2. Translate goals into measurable objectives: Break down strategic goals into smaller, measurable objectives. This helps clarify expectations, enables monitoring progress, and ensures everyone is working toward the same end.
  3. Cascade objectives throughout the organisation: Communicate the objectives to each department or team within the company. Managers must then translate these objectives into actions that their teams will undertake to align with the overall strategy.
  4. Monitor and review performance: Develop a system to review progress against the objectives. This involves tracking performance indicators, checking in with project milestones, and analysing the reasons for delays or variances.
  5. Annual and Quarterly Hoshin reviews: Conduct annual reviews to assess the performance and make necessary adjustments. Quarterly reviews should also be carried out to ensure that the strategy remains relevant and responsive to any changes in the business environment.
  6. Learn and improve: Encourage a culture of learning and continuous improvement through regular feedback, analysis of results, and identification of areas for improvement.

How Hoshin Kanri can help align your team’s goals

The Hoshin Kanri process is designed to facilitate organisational alignment and create a clear roadmap towards your strategic objectives. By breaking down high-level goals into measurable objectives and cascading them through all levels of the organisation, Hoshin Kanri can help ensure that everyone is working towards the same vision. This, in turn, fosters a sense of purpose and cohesiveness within the company, driving employees to work together as a unified force. Moreover, the process emphasises continuous improvement, which keeps teams motivated and focused on delivering their best performance.

Key Benefits of Hoshin Kanri

The Hoshin Kanri approach provides a number of benefits to organisations striving to maintain strategy alignment, emphasise innovation, and enhance organisational performance. Here are some of the key benefits:

  1. Alignment of Organisational Goals: Hoshin Kanri effectively aligns all levels of your organisation behind the same strategic goals. This ensures that every team and individual in your organisation understands their role and how their work contributes to the larger objectives.
  2. Improves Communication: By cascading goals throughout the organisation, Hoshin Kanri encourages clear, consistent communication between all levels of the company. This can help foster a greater sense of unity and teamwork, as well as prevent misunderstandings or disconnects between different teams or departments.
  3. Focus on Strategic Priorities: Hoshin Kanri emphasises concentrating resources and efforts on a few key strategic initiatives. This helps prevent spreading resources too thin and ensures that everyone’s efforts are focused on achieving the most important goals.
  4. Continuous Improvement: Hoshin Kanri promotes a culture of continuous improvement. By regularly reviewing and adjusting goals and strategies, organisations can ensure they are always moving forward and evolving to meet changing market demands.
  5. Performance Measurement: Through the continuous review process, Hoshin Kanri provides a way to measure the organisation’s progress towards its goals. Tracking key performance indicators (KPIs) and other metrics can provide valuable insights into organisational performance and highlight areas for improvement.

In implementing the Hoshin Kanri strategic planning process, organisations can unlock these benefits, driving better performance, increased alignment, and ultimately, achieving strategic goals.

Key Takeaway:

The Hoshin Kanri Strategic Planning Process is an invaluable tool for organisations seeking to achieve alignment and execute their strategic vision effectively. By implementing this proven methodology, you can create a clear roadmap for success, foster a culture of continuous improvement, and ensure that your entire team is working towards a unified strategic goal. If you’re looking to get the best from your Time, Money and Resources this is the way to do it!.

PS: 💡 If you would like to know more regarding Hoshin Kanri please do get in contact, Adam Payne our Managing Director has implemented this in a number of businesses, from SMEs to Global Power Houses with huge success.

Miss that moment – and you start to decline.

Posted on by Adam Payne

“There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment – and you start to decline.” – Andy Gove

My personal view and experience is that it’s more than one point in time.

SMEs are characterised by their ability to adapt easily to market changes and their lean organisational structure (not as in Lean Manufacturing), which results in a more dynamic environment and a quicker decision making process. Although SME businesses vary widely in size and capacity for growth generally they will all follow a similar path: going from Owner/Entrepreneur with two or three employees to a business aiming for £10m or even £20m per year, and experiencing 20%/30% year on year growth and upwards along this journey. The sketch below illustrates an example of this, showing where most businesses may feel the pinch points of growth at key intersections.

SME Journey and Growth

Zero to £5m

The hard work really kicks in here. This part of the journey is often the one that is the most lonely, but often the most exciting. But it is here that most business owners feel the pains. Because it can be a lonely place, it is easy for owners to doubt themselves, they also don’t know what they don’t know which can be a limiting factor. And as an owner one of the main areas of responsibility is simply getting things done, which means you are working in your business as a manufacturer, and not working on it as a strategic leader.

In smaller SMES, management structures are also small with most owners being very hands-on. People are stretched across all functions all processes. Systems are not in place, IT is minimal or non-existent and there is a lack of standard processes. Utilising the Continuous Improvement and Management graph we can see that all levels are being worked with a very lean structure. Small customer projects, odd-job shop style of working.

SME Zero to £5m

As we get closer to a turnover of £5m, it becomes clear that things need to change. We are then moving from that odd-job, one off customer delivery to a mix of bigger projects, possible increased volumes and an increase in market share from your customers. As we start to scale-up from the initial start-up, decisions have to be made about the organisational structure, the company’s technology infrastructure, its business and marketing strategy, etc. With regard to organisational structure, you might now start to see the requirement for supervisory position(s) to take on more of the owners duties, the labour force growing, new machines, loans, investment, functional departments, Operations, Quality, Sales, Technical, Finance. This is where it can be rise or decline with those decisions. In scaling and growth and the opportunities it also brings its own set of problems, (albeit they are nice problems to have because its growth).

£5m to £10m

IT Systems and Planning may start to become an issue here, Microsoft Excel may no longer be good enough to manage your shop floor requirements (although I have seen £100m business still using excel but it was beginning to creak), and you are likely at this level to be considering MRP/ERP implementations. You may also look at outsourcing some functions, like Sales, Human Resources, Engineering Support, Quality, Quality Accreditation. All this requires a lot of investment in terms of time, money and energy. You need to do your homework to avoid costly mistakes, especially where IT is concerned, but it’s all opportunity.

And this stage, the business owner is now becoming more removed from the day to day operational tasks on the shop floor. This can be a very uncomfortable feeling in one or two ways. Firstly, the owner may want that hands-on role and not relinquish that part. It could be that the business is now at the stage where the owner is stopping it from growing, the entrepreneurial side is restricted as they are tied to the business. There a number of factors and variables in play, and having the right people is key, being a good leader is fundamental (at all stages).

SME £5m to £10m

£10m upwards

Financial Audits are required at this point (although some companies can be exempt if they satisfy certain criteria), so businesses need to be aware of the UK Audit requirements. Similar issues and opportunities still arise, but on a grander scale. Organisational structures are still fundamental, we might now start to see the need for Middle Management. We may also be looking to diversify into new markets, take on bigger orders, and higher volume. From £5m and up, some of your customers may not be the ones you want to deal with now, the one-off, low volume, job shop may not be your ideal customer. You might be seeing more of a need for Product Flow and Cells (Lean Manufacturing is a must from when you first start up), competition is high so you cannot stand still, even if your decision is to stay at a certain level. You will need to be driving for improvements to maintain the status quo, and your service has to be exceptional. Collaboration with a network of Manufacturers and or Partners, in my opinion, is key in this new world, and can bring some fantastic opportunities for growth. Again, IT infrastructure comes into play as the business is getting bigger: more employees, management leadership. The addition of new premises or additional buildings on the same industrial estate (this is where having a world class logistics operations pays dividends in not impacting your efficiency/productivity). The opportunities may now open up bringing the out-sourced services back in house, Sales and Human Resources, etc. At this level, you are likely to be making informed decisions based around data. Strategy alignment throughout the organisation is required, communicated and disseminated so everyone in the organisation knows the direction the company is going in and what the priorities are.

SME £10m upwards

Every business is different. One business’s pinch point may be at £3.5m another’s £7.5m but there will be very similar decisions to be made, but at this level the advantage is that businesses are likely to be able to make these decisions in a more informed way through data. Companies may not achieve sustained profitable growth unless they draft in the specialist skills required at the right time for the business. It’s the maxim that we don’t know what we don’t know. And the best advice is to seek advice from the experts in order to shift the dial in the right direction. This is something we can certainly help with, just contact the number below.

Ask yourself:

How much will it cost you not to resolve the issues that you are currently facing now or in the immediate future? How much will it cost you not to eliminate that pain? What are the lost opportunities on not taking your business to the next level or indeed keeping it at the level you want?

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Operationalise your Strategy – FREE Download

Posted on by Adam Payne

OOperationalise your Strategy
Benefits of Policy Deployment

Organisations with the capability to consistently execute their plans through the adoption of Strategy Execution outperform the market. Forget all the meaningless buzzwords and fancy dashboards, you need context and a trackable action plan to drive real performance improvements.

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The saying goes “Culture eats Strategy for Breakfast” Drucker

Posted on by Adam Payne

The weekend of October 22nd I was watching the Austin Texas F1 Grand Prix, this is one programme that everyone knows in my house not to disturb me watching. This weekend Mercedes were all but clear of winning the constructors championship as long as Ferrari didn’t outscore them by 17 points, something in the end that Ferrari couldn’t do. Congratulations MercedesAMGF1!

Now what pricked my ears up was the interview with James Allison at the end of the race, a number of questions were asked around the differences between Ferrari and Mercedes, James (Ferrari man from 2000-2005 and returning 2013-2016 to Mercedes 2017) an absolute professional and held in high regard within F1 would not be drawn on the comparison, but what he did say regarding Mercedes summed it up in 28 seconds of video (click the image below for the interview).

If you look at Ferrari’s take on things in the past few races when things have been going wrong, their behaviour seems to be one of blame and bullet a few people, you would almost say “Manage by Fear”.

As James Allison put, by being Brave to Ultimately Prosper and the culture they have embedded at Mercedes to succeed clarifies the saying “Culture eats Strategy for Breakfast”

Culture is hard to collate, classify, categorise and it’s certainly hard to measure, it also seems one of those things Businesses seem to shy away from, even borderline not accept. It’s the invisible glue that you can’t touch or feel, so we’ll ignore it.

BUT IGNORE IT AT YOUR OWN RISK THOUGH!

Quite often, businesses think culture is some flowery-fluffy stuff that doesn’t make any difference in the end, or even if they think it does matter, they have an excruciatingly hard time describing what theirs is.

This invisible glue that holds the organisation together is probably the most powerful entity you can tap into, it’s part of your businesses DNA, the same as how I describe Policy Deployment, it becomes part of your business DNA. The “How you get things done”

The “How you get things done” drives performance.

Culture is not what we say, but what we do without asking. A healthy culture allows us to produce something with each other, not in spite of each other. That is how a group of people generates something much bigger than the sum of the individuals involved.

So don’t underestimate “YOUR BUSINESSES CULTURE”

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Operationalise Your Strategy

Posted on by Adam Payne

Benefits of Policy Deployment

  • Organisations with the capability to consistently execute their plans through the adoption of Strategy Execution outperform the market.
  • Organisational capabilities will be aligned to support the achievement of your company objectives.
  • Resources will be allocated to business processes in priority order (according to the importance/contribution the process makes to your business)
  • Your company can excel in the business/commercial sector in which it operates.

The Policy Deployment process has yielded some unbelievable benefits for me in my career and it’s one of those processes I recommend all businesses leaders introduce, (but I will also state if you are not prepared to apply the rigorous PDCA management process that goes with it, it’s not for you). I’ve been using Policy Deployment for 15+ years across multiple businesses, as an example: £1bn Turnover business, achieving £200m EBITDA across 38 sites globally, including Lean Savings within the first year of £21m. Done well, it works!

Some of you are probably getting to the stage or are currently producing budgets for your coming year. Now wouldn’t it be worthwhile aligning your Strategy and your budget requirements and drive some break through thinking into the process.

The process itself comes from a technique called Hoshin Kanri, which is a method devised to capture and cement strategic goals, well for me it does more that cement goals, it disseminates those goals into tactical projects that are owned, timed bound and measured.

There have been a number of English translations Policy Deployment, Goal Deployment, Hoshin Planning. I prefer Policy Deployment Process or PDP, but as you probably know from me by now, call it what you want just as long as you use it.

So What DOES it do?

  • It forces the clear identification of “How” we move ourselves towards our Strategic objectives.
  • It creates an alignment of all facets of the organisation on the key strategic initiatives (cross-functional teamwork).
  • Fosters a data-oriented, fact-based culture.
  • Reinforces the vision, but also clearly defines how we will get there (Based on “Who” does “What”).

What it DOESN’T do!

  • Achieve results if the management process isn’t changed (Moved to rigorous PDCA).
  • Achieve results if the “How’s” (Improvement Priorities) aren’t the right ones.
  • Achieve results if the “How’s” aren’t clearly defined.
  • Replace the need for solid Business Fundamentals (also known as Daily Management).

The process is intended to help an organisation:

take the Company Vision (desired end state, aspirations, business scope); the Strategy (3-5 Year Strategic gaps/objectives, high level plans for competitive advantage) and creates a One year distillation of these 3-5 year objectives.

It creates improvement priorities and metrics for tracking progress and indicates the resource responsible and accountable for them. A tactical implementation project if you like (you can go further with the process and state which projects need to be completed within each quarter of the year, to add additional focus).

Detailed action plans (A3’s) are produced for each one of the improvement priorities and reviewed on weekly/monthly/quarterly basis through monitoring of the PDP metrics.

These reviews should be held by a cross functional team who challenge each other, learn from each other and drive execution of the improvement priorities.

Typical Strategy Objectives may be:

  • Double Top Line Sales in 5 yrs
  • Double OP % to Sales in 3 yrs
  • Reject PPM Reduction by 90% in 3 yrs
  • Reduce Lead-time by 75
  • On Time Delivery to 100% in 3 yrs

Typical Annual Objectives may be:

  • Grow Top Line Sales by 15%
  • Increase OP by 25%
  • Reject PPM Reduction by 50%
  • Reduce Lead-time by 50%
  • OTD +20%

Improvement Priorities may be:

  • Quality: Create & Implement Rapid Defect Reduction Process, Implement DFSS on Critical Products
  • Delivery: Apply Lean ‘Tools to XYZ to Reduce LT, Implement Back-Office LT Reduction Process
  • Cost: Develop & Implement LCR Sourcing Plan, Launch Productivity Improvement Std Work Series in Assembly

So Why Use it?

97% of Businesses have a Vision
80% have a clear Strategic Plan
52% some Execution/Success
33% Significant Execution Success
Where do you think Policy Deployment is having an Effect?

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Education and Industry, how do we get it so wrong?

Posted on by Adam Payne

Interesting discussion this week, especially regarding skills for industry.

On three occasions this week I’ve been in conversations where comments have been raised by business owners/leaders that the school curriculum is not aligned with what industry needs. How can this be?

But, when I think of my own experiences with my children, I’m not surprised.

My two kids go to different schools, the age gap between them is 2 years. If I take my eldest, he has just moved schools (based on his own fact based audit), his belief is that the new school gives him more options and a better chance of progression. This is his first year and if I use English as an example, his previous school never progressed him over 3 years, and at one point awarded him for his extra effort, he did extra lessons and again they awarded him but at the same time notified him he was moving down a set. This didn’t make sense to my son at all, nor to us. (We did question this, but that is another discussion).

The new school in less than half a term has progressed him up two grades, how can two schools be so different in approach and teaching????

Another example is science, he was in the top set at his previous school, but based on what information had been sent to his new school, he was placed in the lowest set? This was rectified after a few weeks as the teacher realised his potential and was even given and extra lesson.

The Education System is meant to be one of the most standardised/audited processes in the UK? How do we get it so wrong?

In one of the conversations we had 3 graduates (this was a round-table discussion for a future article by Stirling Media), these young adults were full of passion for engineering, manufacturing, the digital age but remarked on how little is taught on new technology or told about what future careers can be taken.

This too me is madness, particularly when we have stated as a country we need to bridge the skills gap.

When I was at Unipart my engineers use to link with a local girl school and we set tasks for them to do each year, as an example this could be a SMED project on a robot. The engineers would take them through the problem-solving roadmap and into implementation to see their results.

Not of all of them wanted to be engineers, but it certainly opened their eyes to what engineering and manufacturing can be as a career.

I know there are a lot of schemes regarding bringing Industry and schooling closer together, but how are we measuring their effectiveness? Because at the minute I don’t see it, and when I hear the comments from students like I have this week, I do begin to question.

I know this is crucial I just wish it was more of a policy, strategy within the government. Again, it may be, but a lot of us don’t see it.

Anybody else have any thoughts?

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Short Term Vs Long Term Results

Posted on by Adam Payne

Now in anybody’s mind the drive for short term results should be aligned with the long term. But why is it we struggle so much to get this balance right, and to add, it’s never been more needed as it is in the current economic way of the world.

One of the more obvious ways I’ve seen it manifest itself is between the overall corporate strategy and the operational behaviour of local teams. Here are just some of the examples I have seen…

First one, Corporate Strategy was to reduce internal costs, based on a Senior Leaders comment regarding a competitor’s costs, an assumption made with some questionable data. Now the local team had done analysis to show profitability in what they were producing and a significant growth improvement too which the corporate focus was fighting against. Which would you have had? Peter Drucker “preparing for tomorrow” springs to mind.

The second, Corporate Strategy to enter new markets with a new service, the local sales teams refusing to follow this as they believe it would be hard to hit their commissions so subsequently paying lip service to it when necessary. Interestingly the price and the margins for the older services were falling drastically, hence the focus on new service.

The third, Private Equity Investors driving the short term results against the Business Leader driving the long term vision, I’ve witnessed on numerous occasions where PE investors introduce a weekly operations call to review KPI’s (key performance indicators) they have introduced (35/week at one business), from Health and Safety, Productivity, On Time In Full, all the good stuff but driven at a behavioural level that can have a negative impact. KPI’s drive behaviour! When managed at a micro level from upon high every week begins to channel the focus on covering the past, we spend most of our time in answering questions that happened last week, not on where are we going, how are we going to achieve, how can I help.

This is one of the more obvious I have witnessed, the pressurised environment of the end of week/month/quarter / year period often creates behaviours that from an outside perspective at least, appear to be utter madness. Of course every business needs to keep the lights on but not to the extent that it sacrifices long-term value.

There has to be a balance between Visionary/Strategic leadership and Managerial Leadership. Managerial leaders are primarily immersed in the day-to-day activities of the organisation and lack an appropriate long-term vision for growth and change. Conversely, visionary leaders are primarily future-oriented, proactive and risk-taking. These leaders base their decisions and actions on their beliefs and values, and try to share their understanding of a desired vision with others in the organisation.

In essence a business needs to have both mind-sets present, a combination of the managerial and visionary styles. Having two leaders like this requires that they trust each other implicitly and are willing to listen to each other, the CEO and COO for example. It is possible to have a singular person with both mind-sets but they are few and far between.

The balance comes in how you “Operationalise that Strategy/Vision” so both styles work hand in hand.

Food for thought as we start to get closer to a new year.

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