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In its most basic form, lean manufacturing is the systematic elimination of waste from all aspects of an enterprise’s operations.

Waste is defined as any use or loss of resources that does not lead directly to contributing value to the end product or customer service.

In many industrial processes, such non-value-added activities often comprise the majority of the total activity associated with manufacturing the product.

In some cases, it can be more than 90 per cent.

Lean manufacturing requires visualising the ‘big picture’.

This means viewing the enterprise as a single end-to-end entity, versus compartmentalised thinking that invariably leads to sub-optimisation.

However, as manufacturing is a highly complex and increasingly globalised activity, the underlying communications infrastructure becomes key to attaining this visibility.

The communications infrastructure is the only system element that touches all factory sites, supplier/customer relationships and applications.

It also has the advantage of operating in near real time.

Synchronisation of time is critical to lean transformation, since the information contained in applications is typically based on local time zones, batch update routines and many other factors that make it difficult to gain end-to-end visibility of complex processes.

Manufacturers become lean enterprises by treating customers and suppliers as collaborative associates.

This strategy gives them a substantial competitive advantage in the key areas of price, quality and service delivery reliability.

To implement lean manufacturing principles, manufacturers have begun to put all operations and processes, including those shared with suppliers, distributors and customers, under scrutiny and strive to eliminate non-value-added functions.

Most have moved beyond their original manufacturing premises and adopted a globalised and virtual manufacturing strategy.

This transition from factory-site focused, topdown and change-averse to enterprise-focused, value-chain oriented, bottom-up, continuous-improvement companies is the essence of lean manufacturing.

The benefits of lean initiatives include: greater productivity, shorter delivery times, lower costs, improved quality and increased customer satisfaction.

Products are produced in the amount needed, at the time needed, and with the most efficient use of materials, equipment, labour and space.

Additionally, time to market also remains a critical factor in the success of new product launches.

The first six months in any new product release often represents up to 50 per cent of a new product’s total profit contributions to the enterprise.

Success with lean initiatives is dependent on attaining visibility of events and information that can be relied on to be timely, accurate, secure, globally accessible, available across associates, and synchronised across multiple time zones.

As a result, applications and their supporting IT infrastructures must be able to deliver visibility across the end-to-end value chain.

Lean manufacturing meshes leading-edge IT with process management techniques, such as just-in-time manufacturing.

However, lean manufacturing goes far beyond merely just-in-time.

It strives to reduce inventories through better sequencing between demand drivers and production planning, eliminate production problems by sense-and-respond problem avoidance and connect factory floor personnel to elements of the value chain where end-to-end effectiveness can be maximised.

There are opportunities for manufacturing enterprises to transform to lean enterprises through the use of more collaborative network-based services.

This concept is referred to as digital networked manufacturing (DNM).

The transformation to lean manufacturing methods depends on the enterprise’s ability to attain visibility over critical business processes, which are represented by the continuous flow of information between factory cells, distribution functions, warehousing sites, materials suppliers, customers and applications.

For example, timely information from the factory floor can enable manufacturers to track the flow of parts and measure changeover times.

However, this information must be synchronised with functions that are external to the plant, such as logistics and raw materials ordering in order to avoid merely pushing bottlenecks to other points in the value chain.

The network infrastructure is critical because it facilitates this synchronisation.

Having access to accurate and timely data is essential to ensure real-time visibility of the end-to-end value chain in order to identify production bottlenecks.

Lean manufacturing represents a cultural change at all levels of an enterprise.

Its principal objective is to eliminate waste in all its forms.

The objective of lean manufacturing is to deliver orders on time with minimum inventory with the shortest possible lead time and highest possible utilisation of resources.

As IT systems pass volumes of detailed information to initiate the movement of materials inventories and finished goods, the network infrastructure can be used to visualise the start and completion times of these information exchanges.

Most lean initiatives begin with an analytical exercise referred to as value stream mapping.

This is a formal way of visualising how an enterprise produces products and aids in identifying tasks or areas where no value-added activity takes place.

Value stream mapping is similar to business process re-engineering (BPR), but also incorporates analytical techniques such as determining average production rates for each product, load levelling and process redesign to attack the waste problems.

The objective of value stream mapping is to identify large non-value added activities that can be streamlined or eliminated altogether, with teams focused on improving the overall end-to-end process.

Process redesign initiatives often use techniques such as kanban (from the Japanese word for signboard) to provide an understandable and visual method of controlling the movement of materials, inventories and controlled flows, based on demand order pull.

This type of production control is sometimes referred to as a visual production control (VPC).

VPC is a crucial step in the transformation to lean manufacturing, which is to make-to-order (MTO).

To understand why this is a crucial step, one common test is to ask the question: ‘If you stopped accepting orders today and then waited until the factory stopped, how much materials inventory would you have left?’.

If the answer is none, then the enterprise is truly in an MTO environment.

But if the enterprise relied solely on Kanban triggers/initiators, only final assembly is MTO.

All upstream processes could likely still be make-to-stock (MTS), but there are many other related downstream functions (such as packaging and logistics) that must also be considered in order to optimise the end-to-end value chain.

Kanbans are simply a better and more visual way of controlling inventories in the upstream processes, but the information must be synchronised with external systems to avoid sub-optimising individual processes within the end-to-end value stream.

To support lean initiatives, real-time applications and their underlying IT infrastructures play a vital role as they work in combination to provide the information flow necessary to attain value chain visibility.

These applications can be broken down into the following groups: enterprise resource planning (ERP), materials resource planning (MRP) and supply chain applications.

ERP and supply chain applications are used to run the enterprise’s day-today business functions (accounting, human resources, inventory management, procurement and logistics) and are typically centralised at the enterprise’s corporate data centre.

Increasingly, they are linked via network technologies with the applications of external partner enterprises that compose the extended value chain.

For example, demand sensors from the customer’s point-of-sale applications are received by the enterprise’s ERP application and used to establish demand on behalf of pull-driven manufacturing methods.

Similarly, the enterprise’s ERP, MRP and supply chain applications are connected to materials suppliers in order to provide visibility over materials requirements and production schedules.

Working together, these applications coordinate the various accounting functions, materials sourcing, production planning and other critical processes of manufacturing enterprises.

Manufacturing execution systems (MES) describes software functions that reside between MRP/ERP systems and factory automation applications.

An MES makes it possible to pass information back and forth between an MRP/ERP system and programmable logic controllers (PLCs), distributed control systems and supervisory control and data acquisition (SCADA) systems on or near the floor of a manufacturing facility.

From the MRP/ERP system, the MES receives information on customer orders, bills-of-materials, drawings, resource requirements, process plans, work instructions, assembly steps, manufacturing process plans, standard operating procedures, raw materials and inventory.

It then translates this information into a manufacturing execution plan that reflects current conditions on the plant floor.

In executing the manufacturing plan, the MES exchanges information with inventory, quality control, and document management systems, and with shop-floor machine-control systems.

Typical functions include work-order dispatch, work-order tracking, capacity scheduling and report generation.

The MES passes machine settings and parameters to the machine controllers and receives real-time feedback concerning job and process status.

Factory automation applications monitor the production flow in a manufacturing or industrial environment.

These automated systems receive continuous data from the production line sensors (for example, charged coupling device cameras) and filter this data before processing it through the enterprise’s MES application.

These applications handle machine setups and identify various states in the production flow, such as there being no product, or a defective product on the assembly line.

This information is then used to speed up or slow down the production line, or initiate the rejection of a particular part on the production line.

These categories of highly integrated applications are typically run from a combination of central corporate data centres, remote factory plant sites, or suppliers.

The underlying network infrastructure must provide the reliability, performance and security necessary to achieve end-to-end supply chain visibility.

In the traditional view of the manufacturing application hierarchy, enterprise and supply chain management functions have long been the key focus of the ERP applications that sit at the top of the hierarchy.

These applications provide a financial and management view into the operations, suppliers and customers.

The goal of these applications is to provide the tools to optimise the enterprise’s financial returns and manage the supply chain activity as efficiently as possible.

The principal users of these applications are accountants, business planers and line-of-business directors.

Production planning and scheduling have been the key focus of the manufacturing execution systems (MES), which represents the next layer.

MES applications provide the tools to optimise the use of internal manufacturing assets (for example, plant equipment) by effectively planning and scheduling the manufacturing operations.

At the plant level, there are the automation applications, responsible for machine control, production automation and equipment efficiency (for example, machine uptime).

Factory-wide control and information visibility is achieved when real-time machine data acquisition and line control, materials management, test-and-measurement management and product and quality tracking are synchronised in a seamless architecture.

These architectures are based on the premise that there is a synergy between systemic control over the processes within a factory and external, value-adding functions for which the factory is dependent.

For example, a factory-based materials feeder and consumables control system that includes on-line machine setup control and an end-to-end MES system yields tremendous traceability information when joined with real-time data streams that drive raw materials replenishments.

Without materials control, or end-of-process MES records, the traceability data depth collapses.

To illustrate the business impact of this scenario, consider a traceability application involving assembly machines.

If the application cannot provide consistent visibility of materials usage, the materials replenishment function has no assurance of accuracy and this will typically result in either excess inventories (buffer stocks) and/or idle time.

Synchronisation of these functions is typically the objective of just-in-sequence materials replenishment.

From the perspective of information and product flow, the factory environment is heavily dependent on critical functions (and processes) located outside the plant environment.

This includes raw materials supply, packaging deliveries, logistics scheduling, transport documentation and many other information flows that must be synchronised across the value chain.

The manufacturing enterprise is supported by the MRP/ERP/supply chain management applications to manage the relationships and product flow between the manufacturer and suppliers and customers.

However, these centralised applications must have visibility of the factory environments in order to optimise functions such as logistics, scheduling of production assets and provide the greatest ROI.

On the back side, the MES system gathers production data, compares it against expectations, and adjusts the scheduling and planning to assure the customer requirements for volume, delivery, and quality are being met.

In most large manufacturing enterprises, these functions and applications are spread over many time zones and numerous individuals are responsible for performing specific functions.

However, since the underlying network infrastructure has visibility over the information exchanges, the network can be used to achieve a mapping of functions and also provide initiation and completion times for specific functions.

To illustrate, the network infrastructure first provides the basis for identifying which specific applications (or combination of applications) are responsible for initiating each of the critical business functions in the end-to-end process.

This is accomplished by using the network to map transactions from each critical business function back to the IP (internet protocol) address of the applications that initiated the function through the sending of ‘start’ signals.

The network captures the precise time of each transmission.

The second step involves reviewing the start and completion times for individual tasks that follow in sequence within the value chain in order to identify any significant idle time.

Specifically, we look for instances where a function is completed (as represented by the sending of a completion signal across the network), but the next function in the value chain is not initiated immediately, thereby identifying idle time.

The team focusing on lean processes can then perform further root cause analysis to assess the reasons for this idle time and make appropriate changes in the overall process to mitigate the impacts on the end-to-end process.

As well as securely communicating information between sites, applications, users and suppliers, the network infrastructure also enables the mapping of information flows and identifies the time sequencing between individual production functions.

As the specific functions in the manufacturing value chain are supported by different software applications, there are also many LOB (line-of-business) units and individuals involved in the manufacturing processes.

For example, the factory automation application that supports machine set-up on the factory floor is used by personnel who are highly trained and skilled in its specific functions.

Similarly, the ERP application that controls the delivery of packaging materials to the plant sites is used by personnel who do not have access to (nor know how to use) the factory automation applications.

As these personnel in different functional LOBs must work together to make and package the finished products, their ability to collaborate effectively can be greatly aided by network-based services such as BT Unified Communications and Collaboration solution (UCC), which enables capabilities such as voice, instant messaging, telepresence, video conferencing, click-to-meeting, and secure document and image exchange.

For example, in a situation where the factory floor supervisor must alert the packaging department to a production line problem that requires immediate attention, network-based collaboration services permit the two departments to collaborate outside of the established processes/applications and thereby resolve such problems more quickly.

Management of the enterprise’s IT infrastructure offers additional opportunities to gain further advantages in pursuit of lean transformation.

Outsourcing to an organisation that spends 100 per cent of its time and focus in managing these complex environments has many benefits.

For example, remote management, where a managed services provider (MSP) manages IT operations from a distance from a single network operations centre.

System administrators manage all aspects of the server and network environment.

Remote management can apply to both the server networks and workstations (desktops and laptops).

Hosted services is where the IT supplier provides and manages the complete hardware environment for the customer, including servers, network switches and firewalls, VPNs or other forms of secure remote access.

Rather than the customer owning the infrastructure devices, the hosting services provider supplies everything and thereby liberates working capital to be used in more critical areas.

In the co-location services model, the service provider hosts applications in a data centre environment, but the ownership of the servers and network devices remains with the customer.

Database management systems are critical to all manufacturing applications serving as the single repository of data for the organisation.

They are also highly complex to manage.

Database administrators are both difficult to recruit and are often expensive for midsize enterprises.

Outsourced database administration services are available to help tune databases to maximum performance, and manage upgrades without the customer having to maintain the skill set internally.

Protecting the security of networks and intranet and extranet sites is a priority for every organisation in today’s digital world.

Manufacturing companies are increasingly using email and web-based applications to collaborate with organisations up and down the supply chain.

Security management is complex and needs to be handled by professionals in order to protect against data theft and sabotage.

Email contains vital business documents and agreements.

Effective management of digital information is challenging for many midsize enterprises.

Partnering with an information management specialist can provide a long-term solution.

Midsize manufacturers face the challenge of obtaining business applications in a timely manner.

Software as a service (SaaS) provides these applications in a different way – instead of an IT organisation implementing an off-the-shelf application or building one from scratch – a specialised software developer delivers the application and customises it to meet the customer’s requirements.

Access to these applications is then provided via the network infrastructure.

Adopting a holistic lean philosophy across the entire enterprise is a journey, rather than a destination.

It requires continual monitoring and incremental improvements to the productivity of the manufacturing process, the quality of the product, and the overall satisfaction of the customer.

The concept of lean manufacturing goes beyond the factory floor and encompasses the processes of suppliers, customers, logistics providers and other associates.

For manufacturers looking to balance inventory levels and global value chains with improved performance, quality, and customer satisfaction, BT Digital Networked Manufacturing (DNM) provides a flexible, scalable solution that enables the adoption of lean processes throughout the entire enterprise.

BT Global Services

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