Lean Application at Lantech

Lean Application at Lantech

Liker (2004) defined continuous flow as a manufacturing strategy anchored in Just in Time, Kanban and kaizen methodology designed to create a balanced, flexible and responsive processes capable of answering to the customers exact requirements with the highest level of quality - defect free product, lowest affordable cost and minimum waste. This calls for an ultimate integration and collaboration of all the elements of the systems that work together to bring the desired product to the customers.

For Lantect, adopting continuous flow manufacturing (CFM) involved re-designing their whole processes and adopting a whole new concept of manufacturing, moving away from batch manufacturing (multiple product made to inventory) to lean manufacturing (one product deliver to order). The changes and impact as a result of CFM implementation at Lantech can be seen in the following areas (Womack and Jones, 2003):

1. Production

Moving from Batch production to "one product one cycle" method was made possible by changing the production floor lay-out and the work flow structure. Lantech used to produce in 10-20 batches depending on the product type, creating buffer for demand changes/variation in a departmentalised flow (i.e sewing team will get to sew all 4 different product types, the same in welding team, machining team and so on). With continuous flow, each product type was assigned a dedicated production team and production cell, producing 1 product at a time in accordance to the order. These changes resulted in improved production throughput time by 95%, decrease in finished goods inventory by 54%, decrease of manufacturing space per product of 50% and 50% improvement in employee handling time per product. Number of defect per machine was reduced significantly by 90%.

2. Order Flow

Lantech order flow was improved as delivery lead time reduced from 4-20 weeks to 1-4 weeks. This was made possible by the kaizen team effort which together reviewed and re-designed the order flow process. Two visible changes were the use of MRP system that is limited to only long term materials order and the use of white board in the sales office creating visual control for short term and immediate order fulfilment status. Order deliver lead time is no longer a guessing exercise as the white board provided a clear status of each order fulfilment.

3. Product Development

Lantech established a team consisting of people with different and wider range of skills set dedicated to product development projects. This was a major improvement which proven to be highly effective in comparison to the previous approach where there were no team dedicated to product development, rather a team overlooking all projects at same time. Having a dedicated team with a wider skills set ensure better distribution of work and expedition of new product launch which is improves from 3-4 years to 1 year (75% increase).

The fundamental concept that Lantech introduced to implement CFM approach was the value stream concept which as explained by Rother and Harris (2002) includes redesign of whole processes to establish an integrated value stream that allows for a minimum set of activities in designing, producing and delivering products as per customer's specification in a flawless, continuous