Why do Start-ups keep a safe distance from Implementing Lean Manufacturing?

A large number of manufacturing businesses today show hunger for lean management due to its noteworthy impact in last 20 years. However, due to the related costs and requirement of setting aside people for this job, implementing lean manufacturing in start-ups is more challenging than applying it in large-scale manufacturing enterprises. Small businesses often have less access to financing and fewer resources than larger companies. Most of these small enterprises fear the cost of its implementation and are sceptical of any potential results and benefits.

There are nearly 600,000 small manufacturers in the United States. This represents 99% of all manufacturing enterprises (U.S. Small Business Administration,2018). Small businesses are becoming more aggressive in enhancing their business operations because of the ongoing competitive challenges, which is a good time to introduce lean methodologies.

Benefits of Introducing Lean in Small-Scale Businesses

Due to the limitations, many small-scale industries forego the underlining fact that lean is all about operational efficiency and gaining competitive advantage. Moreover, manufacturing issues are similar regardless of the size of the business.

Manufacturing Start-ups have the advantage to be-

  • More flexible than large established companies. New businesses can frequently bring about change more swiftly once they opt to implement Lean Production techniques than is generally possible in larger firms because they are less constrained by tradition, have shorter communication channels, and less complexity.

Some of many methods to successfully implement Lean in Manufacturing Start-ups:

  1. 5S of Lean Methodology – Seiri, Seiton, Seiso, Seiketsu, Shitsuke or Sort, Set in Order, Shine, Standardize, Sustain is an approach of keeping the workplace organized, uncluttered and safe. Applying 5s Methodology as a part of daily life in the company helps keep the workplace in order and simplifies the processes. This approach is suitable for any and every size of organization. Although, starting to practice 5S at early stages of the business can bring out more efficiency.
  2. Managing Waste – The 7 wastes of lean manufacturing, or also known as ‘Muda,’ includes overproduction, inventory, defects, motion, over-processing, waiting and transport as inefficiencies that the lean production systems strive to eliminate. Getting rid of the wastes help cut down on costs and increase profitability which is crucial for new businesses.
  3. Suggestion System– The most cost-effective strategy is to encourage suggestions from employees and implement the relevant ones. An effective suggestion platform can save time, money, and efforts of deploying a special unit to do so.
  4. PDCA (Plan-Do-Check-Act) – A four-step process of solving majority of business problems and gain competitive advantage. PDCA is crucial for continuous Improvement or, Kaizen and hence becomes a core of Lean Management. Before altering procedures and working methods, the model is helpful for small-scale testing of improvement measures.

Realizing that majority of manufacturing units are small-scale, we can imagine the impact of implementing lean to elevate productivity. We must think about how to realize it in every single production unit, knowing the potential in the introduction of Lean Principles.

References

https://www.sciencedirect.com/science/article/pii/S2212827113007130