SMALL, LEAN & MEAN How the Cloud Powers Lean Operations for Small and Medium-Sized Manufacturers Logan Paquin, Director of Product Management
Introduction Logan Paquin Director of Product Management Responsible for on-premise, private hosted, and public cloud software portfolios for Exact US Professional Experience: Product Management, Design/Engineering, Quality and Technical Sales/Support roles for manufacturing company Designed, manufactured and sold precision measurement equipment for oil & gas, chemical, metals and mining, medical, and other industries University of MN Twin Cities Electrical Engineering degree 2
What is Lean Manufacturing? 3
Creating More Value for Your Customers with Fewer Resources Reducing unwanted activities or processes Lean is the set of management practices based on the Toyota Production System Lean has been applied to manufacturing facilities of all sizes, product design, and administrative functions Eliminate waste and non-value add activity Practice respect for people 4
Waste Waste is anything your customer would not be willing to pay for 5
Toyota Production System: Not Just a Tool Lean Manufacturing is an organizational culture that must have 3 things to be successful Philosophy Customer First: Provide customers with what they want, when they want it & in the amount they want it People are the most valuable resource Continuous Improvement: every day Shop Floor Focus: Go to where the work is done to find and solve problems Pillars Use appropriate tools and practices to achieve: 1. Just-in-Time production practices 2. Built-in Quality (Jidoka) to expose roadblocks to improving safety, quality, cost and lead time Managerial Role To be successful long-term, leaders must inspire and develop people to surface and solve problems This will improve performance 6
Goals of Organizations Practicing Lean Safety Flexibility Quality Morale Delivery Cost 7
Goals of Organizations Practicing Lean Safety Awareness of all activities to identify and eliminate hazards for an injury-free workplace Safety is value-added, and hazards are waste - Damon Nix (Georgia Tech Research Institute) Flexibility Morale Quality Delivery Cost 8
Goals of Organizations Practicing Lean Safety Flexibility Morale Quality Delivery Ability of a product or service to meet and exceed customer expectations Recent study: only 2% of companies attempting lean allow employees to pull the cord Cost 9
Goals of Organizations Practicing Lean Safety Capacity to adapt to changes and modifications throughout the shop Modifications could be: input quality, output quality, product specs, delivery schedules Flexibility Morale Quality Delivery Cost 10
Goals of Organizations Practicing Lean Safety Flexibility Morale Quality Delivery Ability to reduce delays and waiting through a process Logistics are an essential part of providing good customer service logistics encompass before, during and after the delivery of product Cost 11
Goals of Organizations Practicing Lean Safety Positive employee morale (and engagement) leads to progress and success in Safety, Quality and other lean measures Flip It: Focus on Safety = Improve Morale Flexibility Morale Quality Delivery Cost 12
Goals of Organizations Practicing Lean Safety Flexibility Morale Quality Delivery Biggest cost in most businesses is manufacturing cost production directly responsible for controlling / reducing it 4 Types: Raw materials, direct labor, variable and fixed overhead Cost 13
Goals of Organizations Practicing Lean Safety Flexibility Quality = LEAN SUCCESS! Morale Delivery Cost 14
Top Reasons Lean Fails 15
Top 10 Reasons Lean Transformation Fails 1. Not a long-term strategy 2. Lack of leadership / owner involvement 3. Relying solely on your lean champion 4. Copying others 5. Thinking of lean as just a tool not a cultural approach to doing business 6. Lack of customer focus 7. Not engaging all employees 8. Not educating all employees 9. Lack of understanding 10. Conflicting metrics or KPIs 16
#1: Not a Long-Term Strategy Lean is a Journey 17
#2: Lack of Leadership / Owner Involvement Lean requires top-to-bottom leadership of a special kind Lean leader characteristics / attributes: Firm and inspiring Relentless and resilient Demanding and forgiving Focused and flexible Must be intelligent and respected 18
#3: Relying Solely on Your Lean Champion Everyone brings something to the table and everyone needs to understand and participate to find success Critical Mass is Critical Important for those on the shop floor as well as the front office Requires a strong implementation team Not an army of one An army of many (ex. Shop floor managers) who have the most of gain or lose by success or failure Respect for People specific to lean is complex: Not about being nice, it s about challenging others to do their best and then do better Collaborate, work together, and improve 19
#4: Copying Others 20
#5: Thinking of Lean as Just a Tool Lean is a tool. Lean is a cultural approach to business. 21
#6: Lack of Customer Focus Internal External 22
#6: Lack of Customer Focus Internal External Provide customer more value in less time Without this, lean techniques become difficult to deploy Every decision and action must be value-add The customer must be willing to pay for what you are doing 23
#7: Not Engaging All Employees Lean leadership is about: engaging and empowering people helping people growing professionally and personally Encouraging employees to take pride in their work Recognizing how a system operates Spending time coaching people, NOT setting targets and then yelling when people don t hit those targets Spending more time with employees than in their office 24
#8: Not Educating All Employees Training is a must and must be appropriate to the elements being deployed and the strategy of the organization 25
#9: Lack of Understanding Education / Training Understanding Success 26
#10: Conflicting Metrics or KPIs Data and metrics can be crucial to organizational efficiency and growth, but: Metrics must focus on the process of value creation and their associated costs Focusing on some traditional KPIs such as individual machine and employee performance can lead to non-lean behavior Lean accounting focuses on performance of the entire value delivery system Overall Equipment Effectiveness Downtime Customer Lead Time On-Time Delivery Inventory Turnover Inventory Costs Days in Inventory Customer Satisfaction Defects per Thousand 27
Focus on Lean (with help from the cloud) 28
Lean Through Software Early Days When lean manufacturing first gained attention, it was perceived to be incompatible with manufacturing and enterprise resource planning software (MRP & ERP) Lean is all about operations and execution, and not specific to the planning functions in ERP Lean manufacturing emphasizes physical signals and controls, and works to reduce inventory, work in progress (WIP) and lead times All common characteristics of an MRP/ERP environment This has given developers time to evolve their solutions to better support the combination of ERP and lean manufacturing techniques 29
What Does ERP Do For Me? ERP provides advanced scheduling Visibility into inventory and shop processes Dashboards and analytics show real time movement on the shop floor Data Collection modules like Smart Shop Floor allows labor and material entry from anywhere, at any time, on any device for maximum efficiency No longer walking across the shop to 1 of 2 terminals No longer even need to take any steps at all, data can be logged on a tablet or smartphone Material Requirements Planning (MRP) Takes in inventory, BOM, and production schedules, and calculates purchasing and shipping schedules for the parts or components required to build a product 360 customer profile And More! 30
What Does The Cloud Do For Me? All of your data is at your fingertips, when and where you need it Anytime, anywhere access Your business can go global in days! Use a laptop or tablet or smartphone to manage your business Seamlessly connect with other companies, improving your supply chains, connections, and revenue generating opportunities Securely encrypt your data, reducing the risk of stolen information that can be more easily found on local servers, desktops, and laptops Integrate with Applications for endless benefit 31
Lean & Cloud ERP Best of Both Worlds Streamline shop floor and back-office operations Reduce waste in sifting through irrelevant data Reduce waste in missing internal deadlines and increasing risk in late deliveries Leads to dissatisfied customers and lost business % of customers that will not work with a company again if ONE order is delivered late: 25% # of new customers a company must acquire to replace every lost one: 2.6 32
Lean in the Cloud Eliminate Waste Save Time Focus Employee Resources on Value-Added Activities 1. Attain a holistic view of all your business operations 2. Allocate valuable resources strategically 3. Optimize experience by keeping customers informed 33
1. Attain a Holistic View of Your Operations From quoting and purchasing raw material to production and delivery, one application can provide insight and access to your entire business Your company s transactional history is always available, ensuring you provide accurate quotes and deadlines for similar projects Data is applied realtime, with dashboards, reports, and calculations accessible at your fingertips You can better track incoming materials, allocate them to jobs, and drive your business forward from anywhere in the world 34
1. Attain a Holistic View of Your Operations Data-led businesses adopting newer technology reported revenue growth of 21% in the last financial year VS Businesses who reported limited use of their data to drive decisions only had revenue growth of 9% 35
2. Allocate Valuable Resources Strategically What are the most important manufacturing specific business challenges you face? 36
2. Allocate Valuable Resources Strategically With cloud ERP business software, you can ensure materials, personnel and time are spent on valueadd activities instead of mundane, wasteful tasks such as: Manual time and material entry Paper-based reporting Calculating metrics and financials by hand or spreadsheet Entering customer and order data in multiple places and/or systems Waiting until you are back in the office to log data or enter a new customer or order Cloud technology gives small and medium sized businesses the same business insights and automation advantages as large enterprises for an affordable price 37
2. Allocate Valuable Resources Strategically Reduce your investment on costly server and storage infrastructure while simultaneously freeing up your IT resources from the day-to-day burden of running and maintaining a data center Instead, focus IT on higher-value activities that generate life for the business New applications to bring efficiency Upgrade your systems and other infrastructure to speed up business practices Train them in other areas that can create value-add results in your shop 38
3. Optimize Experience by Keeping Customers Informed Satisfied Customers = Loyal Customers A manufacturing company of any size can create satisfied customers by: Quickly generating quotes Sending quotes/orders electronically Informing customers on order status Your business will keep loyal customers by: Providing real-time eyes on your inventory levels and needs to react immediately This will ensure orders are never late and you always have the material on-hand you need Cloud access ensures everyone (shop floor to front office to sales rep on the road) knows of changes at the same time 39
3. Optimize Experience by Keeping Customers Informed Data can be shared with your customer (and vice versa) at any time and accessible from any device Cloud communication is essentially free Using EDI, you can streamline your communication even more Combination of cloud technology and apps provides an almost unlimited number of customer touchpoints and business advantages 40
Lean Business + Cloud Technology = Success Eliminate Waste Save Time Focus Employee Resources on Value-Added Activities 1. Attain a holistic view of all your business operations 2. Allocate valuable resources strategically 3. Optimize experience by keeping customers informed 41
Stop by Exact s booth: E-3249 (East building) FOCUS ON WHAT S NEXT Questions? - 42 TITLE OF PRESENTATION