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IT
Vendors – Now is the Time to Support Midsize
Manufacturers Need to "Go Lean"
By Bob Anderson
Given
that lean manufacturing has been known and in
practice for more than 20 years in North America,
why do we believe it is critical to bring it
up again?
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Based
on recent Gartner surveys, up to 45 percent of midsize
business (MSB) respondents had no knowledge of formal
lean manufacturing tools or methodologies. Yet midsize
manufacturers are finding themselves in the midst of
the first economic recession in ten years and are experiencing
incredible new forces that are driving them to become
even more competitive. Large OEM manufacturers have
begun to demand very small lot sizes and quicker responses
from suppliers. Buyers, not sellers, continue to control
prices and expect instant gratification with near perfect
products and service. When times are tough, revenues
are contracting, and customers are demanding more---it's
time for manufacturers of all sizes to seek out ways
to get lean.
Current
trends suggest that flexibility and responsiveness
will be the most critical attributes of success for
midsize manufacturers by 2006. Midsize manufacturers
have already begun to experience the heightened competitive
climate driven by the Internet and enhanced means
of communication and collaboration. As the economy
improves and becomes more demand-driven, these forces
will accelerate and require even more agility on the
part of manufacturers. A "we can have it all" when,
where and how we want it attitude among both retail
and business-to-business customers will force MSBs
to become much more flexible and adaptable.
Midsize
manufacturers will face the following technology challenges
during the next few years:
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The
ability to achieve concurrency in all operations. |
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The
ability to instantaneously transform information
gathered from a vast array of sources into useful
knowledge for making effective decisions. |
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The
need to reduce production waste to "near zero". |
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The
need to reconfigure manufacturing enterprises
rapidly in response to changing needs and opportunities. |
In
response to these heightened standards and a more
dynamic marketplace, all activities that are not essential
in support of customer value will need to be eliminated.
And lean manufacturing provides an organizing system
for eliminating all non-value-added activities and
waste throughout an organization. Its goal is continuous
improvement and converting manufacturers into more
effective, less wasteful, more responsive and more
profitable enterprises. To remain competitive they
must transform themselves from being factory-focused,
top-down and change-averse to enterprise-focused,
supply-chain oriented, bottom-up, continuous-improvement
companies.
Lean
manufacturing is very broad in its methodologies and
will more than likely require MSBs to seek outside
assistance. Additionally, few have the resources to
implement the lean approach on their own, so outside
consultants and application vendors that support lean
methods in their products will play a key role in
knowledge transfer. Going lean holds great promise
for restoring the competitiveness of midsize manufacturers,
while increasing profitability for IT vendors who
support lean methodologies.
Bob
Anderson is Research Director, BMIT and SMB, Gartner.
You can discuss this, and related topics, with Mr.
Anderson at Midsize
Enterprise Summit. Click
here for event details.
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