Friday, December 23, 2005

Lean Manufacturing Interview

Mohammed Ajlouni is Managing Director of Jordan Specialized Vehicle Manufacturing Company and is without doubt one of the Middle East’s most influential Lean Enterprise experts. He will be presenting alongside the UK’s Mark Eaton at PEIE’s Smart Manufacturing Conference, 23 – 24 January 2006, Muscat Inter-Continental Hotel. PEIE Mirror sat down with Mohammed to talk Lean Enterprise, this is what he had to say:

PM: What got you interested in lean in the first place?

The first time I came across “Kaizen” was in 1992 while on a postgraduate management course. After reading more about it and understanding the concepts, tools and systems of Kaizen, I realized this was the best management philosophy I had ever come across. Later on I read the “Machine that Changed the World” followed by “Lean Thinking”. In 2001 I had the opportunity to accompany Masaaki Imai ( Founder and Chairman of the Kaizen Institute, on a series of tours in the Middle East. Since then I have become a believer, a consultant, a practitioner and an educator of lean in the Middle East.

PM: What’s the biggest challenge Gulf-based companies have in applying a lean approach to their supply chain or other operations?

The biggest challenge is to get management to buy in and get excited enough to start the lean journey. Once management is committed to lean transformation, the next challenge is to make it happen. They have to start looking for the right people with the right knowledge and experience to help them implement lean in their organizations.

PM: Why, suddenly, does everyone seem to be interested in lean? What took everybody so long?

Organizations have realized that lean has become an indispensable approach if they want to stay competitive in their markets. Although the Toyota Production System was in place more than 35 years ago, but the rest of the world only learnt about it in the early nineties. It is never too late for any organization to transform into lean.

PM: What are the key components of lean, those core elements without which you really can’t have a lean operation?

The key components of lean is that every step within the process must be valuable (creating value for the customer), capable (having a first-time through capability), available (having a high resource reliability), adequate (ensuring capacity) and flexible (being able to produce a variety of products or services). Implementation should be linked by flow (one-piece-flow where possible), pull (no over-production) and leveling (of mix and volume).

PM: What are the kinds of things companies typically find when they begin looking at their supply chain in an effort to become lean?

Long lead times, high inventory (raw material, WIP and finished goods), unreliable suppliers, a discontinued flow of material through the supply chain, demand fluctuations along the chain and other problems arising from material shortages.

PM: What’s the downside of squeezing suppliers?

Supplier selection and rationalization are two elements of paramount importance in lean supply. The idea is to select a few good and trusted suppliers who can supply a wide range of parts. Consolidation of suppliers might cause some problems for the suppliers and this may lead to losing some. The lean company has to assure suppliers they will benefit from the new relationship.

PM: How should you work with your suppliers in a truly lean environment?

In a truly lean environment, suppliers are partners. They will be expected to supply the required material, the right quality, the right quantity, at the right time, every time. To be able to do this, suppliers have to learn how to take the waste out of their processes. Indeed, many companies have to teach their suppliers how to become lean too.

PM: Let’s say you’re a logistics or a purchasing manager who really believes in the things you’re talking about. What can you do to promote lean thinking in the organization?

Usually two hidden costs are associated with supply problems. The first is the cost of fast and expedited shipments (specially air fright) when the supplier fails to deliver on time. The other problem is quality and the costs incurred in warranty claims. Moreover, one needs to compare the costs of frequent and reliable orders on the one hand, and keeping inventory on the other.

PM: What’s the key to sustaining a lean program once you get it off the ground?

Committed management with strategic vision is the most important key to sustaining lean, but there are other elements as well. Among these is the establishment of a dedicated and knowledgeable lean promotion team, getting expert training and support, involving employees at all levels and having strong line management, setting performance targets and motivating employees to achieve their goals, and maintaining a general sense of urgency for progress.

PM: Instead of thinking of lean as a program, how should people think of it?

A program has a begining and an end. Lean is not a “flavour of the month” project, but an ongoing process. It should be thought of as a way of life rather than merely an improvement program.

PM: Where does technology fit in a successful lean approach?

Lean works for both high- and low-tech organizations. If technology is available it can be used to support lean in a number of ways. But apply the technology after the waste has been cut out. For example, there is no point of automating a process that includes waste. “Don’t automate. Obliterate!”

PM: Any final words on why top management in Gulf-based companies need to start getting serious about lean?

As global competition increases, it is time for Middle East businesses to think seriously about implementing lean. Toyota - who is heading towards being the world’s number one automotive manufacture - has based its success on its operational excellence. In fact, it has turned this operational excellence into a strategic weapon. Very soon, only world-class organizations will compete globally. It is imperative that Middle East-based CEOs start getting serious about transforming their organizations into world-class outfits through lean, otherwise, they simply won’t qualify to compete.