NOVEMBER 20238MANUFACTURING TECHNOLOGY INSIGHTSIN MY OPINIONBy Rudy Susanto, Head of Engineering & Manufacturing Excellence, Wings Group LEAN MANUFACTURING DEPLOYMENT ON THE BALANCED SCORECARD AND STRATEGY MAP Rudy SusantoLean Manufacturing is a concept that has been proven effective for increasing productivity and the main focus is to eliminate or reduce waste. According to Voehl et.al (2014: 67) in his book titled "The Lean Six Sigma Black Belt Handbook", there are 9 types of waste that are defect, overprocessing, waiting, transportation, inventory, motion, extra production, underutilized employee, and behavior. However, in the actual implementation of KPIs, the main focus is cost centric by setting target cost saving without digging into the current organizational situation. Cost saving is very popular, but sometimes the targets seem contradictory. For example: eliminate safety incidents but reduce costs related to personal protective equipment, increase machine effectiveness but reduce maintenance costs, improve manpower skills but reduce training & development costs, improve quantity task completion but reduce manpower, increase product availability but reduce the stock level quantity, etc. The problems will get more complex when each department begins to prioritize and execute improvements related to its own KPIs without caring about the effect on other departments. The impact is decreased communication and coordination among departments and leads to the situation getting out of control. In this article, I will describe 3 important points in the implementation of lean manufacturing regarding the above phenomena that focus on waste, timing deployment, and integration measurement in determining sustainable KPIs. FOCUS ON WASTEKPIs are usually defined while a strategic meeting event and commonly target cost saving has been determined based on the previous year's cost structure component without identifying waste and manpower capability improvement skills in each stage. For instance, the target reject rate for production materials is 1%, overtime costs are 5%, maintenance costs are 30 IDR/kg, manpower reduction is 0.5%, and so on. This situation will drive the organization to focus on the target number but not focusing on how to achieve the target optimally, so the silos mindset will be formed in each department. If the company is still in the early stages of implementing a lean manufacturing system, it can easily find opportunities for improvement. This happens because the majority initiative still is categorized as waste, so the improvement initiative doesn't interfere with other KPIs. But if the organization reaches a certain level of efficiency, synergy among departments is a must because the improvement starts to overlap and conflict with each other's KPIs. To anticipate it, the first step is to identify the potential waste and formulate it into an improvement that has been weighted to the skill capability and maturity of the organization. The second is to conduct a mapping or grouping of each initiative to find out the relationship so that the primary initiative can be determined. For example, the main initiative is to improve the efficiency of machine performance, which will have a direct impact on reject rates, overtime costs, maintenance costs/kg, and excess manpower. The third step is prioritizing and aligning the initiatives that have been determined in the second step to agree on the pros and cons of the initiative by forming a project team consisting of departments that especially have conflicting KPIs. The remaining initiative will be parked for the next journey.
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