Executives Are Focusing on Flow, Culture and Buy-in to Succeed in their Lean Transformation Efforts
By Jose R. Suarez, Founder and CEO, Impactiva
In today’s competitive, budget-conscious environment, apparel and footwear executives face substantial challenges, from rapidly shifting consumer and channel demands to rising labor costs and market volatility. As a result, many are embracing Lean manufacturing to eliminate waste and increase efficiency and flexbility.
However, as many executives are discovering, true implementation success requires more than just the right tools.
Rising Pressure for Efficiency, Productivity and Flexibility
Across the apparel and footwear industries, various economic, labor and consumer trends are impacting the competitive landscape, forcing companies to streamline costs, improve quality and bolster productivity.
Years of rising wages and labor costs across all of China’s eastern seaboard provinces has amplified the trend to shifting production to countries such as Vietnam, Bangladesh and Laos, thus diversifying supply chains and presenting executives with new challenges regarding operations, delays and material costs.
Meanwhile, consumer behavior is evolving. The pace of style changes is quickening, and with the growth of e-commerce, greater speed and flexibility is being required throughout the supply chain.
The obstacles are significant, and overcoming them is critical to the future of apparel and footwear companies. Therefore, many brand and retail executives are adopting Lean manufacturing programs for their factory base in the hopes of achieving greater output with fewer resources. However, as many have found, Lean initiatives only succeed when accompanied by three key components:
- Focusing on Optimizing Production Flow
- Building a Sustainable Lean Culture via Change Management
- Defining “What Is in It for Me”
1. Focusing on Optimizing Production Flow
Before starting a Lean transformation, factories should assess where they are incurring seven types of waste that inhibit them from optimizing production flow: transportation, inventory, motion, waiting, over-production, over-processing and defects.
The assessment will help them identify non-value-add activities that create bottlenecks. Time and motion studies can also be used to detect inefficiencies and bottlenecks caused by unbalanced production lines.
To measure the effectiveness of the production flow of a manufacturing facility, factories should calculate their Overall Equipment Effectiveness (OEE), which measures the percent of effective production time. It can be determined by multiplying availability (equipment uptime) by performance (productivity) by quality (right-the-first-time rate).
2. Building a Sustainable Lean Culture via Change Management
One of the most important factors in ensuring long-term program success is the development of a sustainable Lean culture. After all, Lean manufacturing is not only about building robust processes; it is also about building a culture based on five values: transparency, discipline, accountability, experiment-fail-learn and positive energy.
As with any significant, long-term initiative, developing a sustainable Lean culture requires leadership. Top management should focus on instilling these five key values, as well as displaying a continuous improvement mentality and total adherence to Lean principles.
As part of this effort, management should build a continuous improvement team within the organization, including a designated Lean leader to serve as an ongoing subject matter expert. Then, as part of a mechanism to break old habits throughout the factory, management should employ metrics and targets to hold team members accountable for supporting the effort on a daily basis.
By completing these tasks and demonstrating a commitment to changing habits, top management will gradually transform and solidify behaviors and values across the factory—yielding the right atmosphere for a sustainable Lean culture.
3. Defining “What Is in It for Me”
Finally, brand and retail executives should define what the factory will gain from adopting Lean and becoming more transparent. This effort is critical, as factory buy-in is required for the long-term success of a Lean transformation of one’s factory base.
For instance, executives may ensure an increase in factory volume that would accompany a successful Lean implementation. These communications may even include a guaranteed volume for a certain number of years, or a guaranteed level of profitability per unit that grows as higher levels of Lean are achieved. Conversely, executives may opt to provide disincentives, such as a cap on price increases due to rising labor costs.
With factory buy-in established and a sustainable Lean culture in place, systems and processes can be successful despite any changes that may occur in factory management. As a result, a Lean manufacturing organization can focus more on goal-setting and ultimately long-term profitability.
Ultimately, Lean manufacturing programs can help brands and factories to overcome industry challenges by producing significantly more with the same or less resources. However, only with the right focus, leadership, culture and buy-in can they deliver lasting increases in productivity, on-time delivery, flexibility and capacity.