Transitioning into New Manufacturing Paradigm: To Succeed in the Customer Centric Business Environment—Agility, Speed and Responsiveness. “The Lean Manufacturing Enterprise”

By Dr. Azlan Nithia

The customers prefer small lot sizes, multimodels with model variations, short delivery lead times, and low cost. The organization that cannot transition to the new manufacturing paradigm of buyer-centric strategy, their rigidity of the current mass production (seller-centric), will eliminate them from the industry. There are many organizations that implemented robotics and automation to reduced labor, but, they have also increased their changeover time and made the internal processes more complex, rigid and created imbalance to the flow due to the single-minded focus of only labor reduction. To survive and succeed in the fierce market competition, the organizations must transition to the new manufacturing paradigm. The organizations must develop their people capabilities, agility, speed, responsiveness and be able to deliver products at the lowest cost. The concept of mass production of large lot sizes and lesser model changeovers are not acceptable, this thinking must be evaporated to succeed in the new customer-centric business.

This book introduces practically proven concepts that will transition the manufacturing organization from the mass production focus built on rigidity to a high-performing organization equipped with agility, flexibility, short lead times, multimodel production, and new organization culture that drives daily continuous improvement and problem-solving. This book shows the whats and hows to transition to the new manufacturing paradigm and successfully compete to win in the fierce customer-centric business.

• Language: English
• Publisher: Partridge Publishing Singapore
• Release date: Nov 15, 2018
• ISBN: 9781543748819

Dr. Azlan Nithia

After more than 35 years of experience in high volume manufacturing, product development, lot size of one high volume tooling operations, implemented lean transformations and created high performing organizations, it is apparent that manufacturing organizations around the world are mostly structured around rigidity of mass production and not able to meet the demanding responsiveness, agility and low cost. This book is written on the challenges faced, how to transition, implement a responsive and customer-centric manufacturing operation that will always stay ahead of the rapidly escalating hyper competition.

Book preview

Copyright © 2018 by Dr Azlan Nithia.

ISBN:                  Hardcover                        978-1-5437-4879-6

                            Softcover                           978-1-5437-4880-2

                            eBook                                978-1-5437-4881-9

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the author except in the case of brief quotations embodied in critical articles and reviews.

Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

www.partridgepublishing.com/singapore

I

dedicate this book to my late children, with ever-loving memories:

• Azwadi Aznil Nithia

• Azwari Aznal Nithia

• Aztika Azrin Nithia

Contents

Acknowledgements

Preface

Introduction

List of Figures

List of Tables

Chapter 1

Transitioning into New Manufacturing Paradigm

–   Introduction—The Need for Transition

–   The Concept of Customerisation

–   Transitioning from Mass Manufacturing to Customised Manufacturing

–   Capabilities Needed for Transitioning

–   Why Pursue Mass Customisation Process

–   The Importance of This Study—Customerisation Process

Chapter 2

The Concepts to Achieve Mass Customisation

–   Introduction—The Customerisation Strategy

–   Transition to New Paradigm

–   Mass Production and Mass Customisation

–   Product, Production, and R&D Orientation Perspective

–   Marketing Orientation Perspective

–   Organisation Structural Perspective

–   Lean Manufacturing and Customer-driven Focus

–   Integrating Lean Manufacturing into Mass Customisation

–   Mass Customisation—Achieve Customer-Centric Goals

–   Internal and External Complexity

–   Pure Standardization and Tailored Customisation

–   Agile and Flexible Manufacturing

–   Cultural Traits Required for Mass Customisation

–   Mass Customisation and Organisational Readiness

–   Lean and Agile Manufacturing Systems and Organisational Cultural Change

–   Agile Manufacturing Systems and Culture Change

–   Concept of Organisational Culture

–   Culture Dimensions and Mass Customisation

–   People Involvement and Mass Customisation

–   Adaptability and Mass Customisation

–   Consistency and Mass Customisation

–   Transition from Standardization to Customisation

Chapter 3

Factors That Inhibit and Contribute Towards Achieving Mass Customisation

–   Introduction—Inhibitors and Contributors

–   Nature of Customer Involvement and Lean Initiatives

–   Flexibility in Manufacturing

–   Agility in Manufacturing

–   Extent to Which Lean Manufacturing Is Practiced

–   Level of Satisfaction with Lean Achievement

–   Relationship between Lean Initiatives and Customer Satisfaction

–   Complications Faced in Mass Customisation

–   Changes in Engineering Design and Planning System

–   Level of Customisation and Changes Implemented

–   Benefits Expected of Lean and Customisation Initiative

–   Level of Customisation—Benefits and Challenges

–   Level of Customisation and Challenges Faced

–   Customer Involvement and Complications

–   Possibilities of Overcoming Limitations Faced

–   Difficulty Anticipated When Customisation Is Fully Introduced

–   Success and Inhibiting Factors for Achieving Mass Customisation

–   Benefits of Realising Mass Customisation

–   Summary of Findings

Chapter 4

The Successful Implementation of Mass Customisation

–   Summary of this Study

–   Discussion and Recommendations

–   Overview of Recommendations

–   Requirements for Customerisation to Occur

Chapter 5

Manufacturing Excellence: The Route to Mass Customisation

–   Understanding the Impact of 3M Waste in Manufacturing

–   Muda (Waste)

–   Value Stream Mapping and Managing Daily Improvement

–   Mura (Unevenness)

–   Smoothening the Schedule—Daily and Hourly Scheduling

–   Case Study—Overcoming Constraints in the Production System

–   MURI (Overburdened)

–   Reducing MURA and MURI

–   Early Detection and Immediate Action

–   The Pride of Workmanship

–   The Jidoka Principle and the 4-Step Approach

–   Manufacturing Excellence’s 3M House

Conclusion

References

Acknowledgements

In the course of writing this book, I have benefitted from the experiences of many experts and academics, both locally and abroad. I must admit that I cannot take all the credit expressed in this book because I have merely brought together my vast years of experiences from high-volume manufacturing, one-piece production, product development, lean implementations, and lessons from many experienced gurus and sensei from the various industries around the world.

My early adoption of lean principles began when I first read the book The Machine That Changed the World by Jim Womack (who introduced LEAN to the world), the book Kaizen—The Key to Japan’s Competitive Success by Masaaki Imai (who introduced KAIZEN to world), and the book Toyota Production System—Beyond Large-Scale Production by Taiichi Ohno (who founded and introduced the TPS at Toyota). This was the beginning that started my relentless search for manufacturing excellence, and this search led me to numerous research into various manufacturing systems, Toyota Manufacturing System (TPS), lean practices, and the influence of organisational culture.

Later, I was privileged to meet and learn more from a person who had worked directly with Mr Maasaki Imai, and he wrote his own book, Chronicles of a Quality Detective, profiling Dr Shrinivas Gondhalekar (aka Dr G). Dr G introduced to the world one of the most powerful approaches towards solving quality problems by using a simple methodology called differential diagnosis (DD). I had personally work with Dr G for more than fifteen years solving hundreds of quality problems, implementing numerous lean and Kaizen activities successfully. I wish to convey my humble appreciation and thanks to Dr Rumesh Kumar, who has given me numerous support on the study related to people cultural influence in an organization.

Preface

Over the years, I have worked with many manufacturing organisations around the world, particularly those engaged in high-volume mass manufacturing. I have spent more than thirty years in various manufacturing functions, product development, and successfully transformed several manufacturing organisations. It was very apparent to me that many organisations are structured around high-volume manufacturing and using the mass-production strategy. These have created numerous rigidity in their internal production system and also rigidity in the organisational work culture. These organisations prefer to engage in high-volume orders, large order lot sizes, and minimum variations, and they insist on lesser model changeovers. They are always resisting small orders or multiple model orders because the rigidity of their internal production system, machines, tools, and processes are not flexible, and this rigidity creates a long changeover time from one model to another. The small lot size and changeover issues are negatively impacting their throughput and lead time, as well as the quality and cost of the products. It was very clear to me that these organisations are currently stuck in a rigid, seller-centric strategy, and obviously this cannot be sustained for long; they will become history and may get eliminated soon.

The customers prefer small lot sizes, multiple models (model variations), short delivery lead times, and low cost. If the organisation cannot transition quickly to the new manufacturing paradigm of buyer-centric strategy, the rigidity of the current mass production will eliminate them from the industry. This problem was further complicated when these organisations embarked in a cost-reduction journey (to reduce labour) by implementing robots and automation; this increased the rigidity and changeover time, and the internal process were made more complex and more rigid.

The customers want flexibility and agility, not rigidity. This problem of the difficulty to transition from mass production (rigidity) to mass customisation (agility) inspired me to carry out an actual manufacturing study of the inhibitors and contributors to transition into a buyer-centric, mass-customisation manufacturing strategy. I strongly believe the transition into a new manufacturing paradigm is important for the survival of any manufacturing organisation, and this journey will create a strong foundation for the organisation to achieve manufacturing excellence and compete in the market successfully with the customer-centric strategy.

Introduction

The new manufacturing paradigm is about the customer and the ability to meet customer expectation. To succeed in the new manufacturing paradigm, organisations should transition to a customer-centric business strategy. In a customer-centric business, in order to survive the fierce competition, the organisation must develop the capabilities of agility, speed, and responsiveness, delivering products at the lowest cost. The concept of mass-production, lesser model changeovers is better and that large lot size orders are good is the thinking of the past. This kind of thinking must be evaporated in order to succeed in the new customer-centric business. This book introduces a concept of customerisation process that will transition the manufacturing organisation from the current mass-production focus built on rigidity to an efficient, mass-customised manufacturing organisation that will be equipped with agility.

The concept of customerisation process is divided between that which views it as a phenomenon and that which views it as a process. This book is based on research that was focused on a process-based approach to operationalise the concept of customerisation in a manufacturing environment. This process-based approach provided the means required to uncover key issues that accentuate the key requirement for the process of mass customisation in a manufacturing organisation. In the new era of manufacturing, a high level of manufacturing agility is a prerequisite, and embracing lean is important to succeed in the challenging, new manufacturing paradigm of rapidly changing customer requirements, small lot sizes with high model variations, personalised marketing, and a digitally connected business environment.

The manufacturing industry is furiously challenged by the increase of start-up companies, battling with competitors and organisations that are becoming more adaptive to customer needs. The concept of customerisation is about the process of transitioning from mass manufacturing (also called standardised manufacturing or mass production) to a more customer-centric concept of mass-customised manufacturing. This will able the manufacturing organisation to achieve the required agility and flexibility while simultaneously being lean in order to achieve a high level of customer focus in the manufacturing processes and the organisation culture to achieve the robustness for manufacturing excellence.

It provides an overview of factors that inhibit and contribute towards the customerisation process in a manufacturing environment. The findings obtained have made it possible to establish how these factors affect the transition from mass manufacturing to customised manufacturing. The findings highlight the importance to develop agility and scale up flexibility all manufacturing processes, functions, and employees across the whole organisation.

The findings suggest that for customerisation process to take root, an organisation’s leadership must set out a clearly defined mission with specific goals and deliverables. In this regard, there are seven significant factors that must be introduced: institutionalizing cost controls, maintaining focus on lead time reduction, focusing on exceeding customer expectations, increasing scope and level of organisational flexibility, extending planning support to the entire value chain (with a focus on end-to-end supply chain), nurturing employee involvement during the customerisation process, and intensifying integration management (flat organisation structure) as the level of customerisation increases.

In summary, the findings suggest that for the customerisation process to succeed, a conscious attempt must be made to introduce enablers and discard (mitigate) inhibitors. This should be done within the related departments such as planning (supply chain), engineering, and manufacturing (production).

List of Figures

Figure 1: The Customerization Process Framework

Figure 2: The House of Customerization Process

Figure 3: Customerization Process Framework Expanded & Elaborated

Figure 4: Organizational Culture Survey

Figure 5: Value Stream Mapping (VSM)

Figure 6: Scheduling Unevenness (Mura)

Figure 7: Case Study - Constraints in the System (Mura)

Figure 8: Sub-Assembly Process Constraints

Figure 9: Manufacturing Excellence’s 3M House

List of Tables

Table 1: Mass Production versus Mass Customisation

Table 2: The Continuum Strategy

Table 3: Traditional and Agile Manufacturing Enterprise

Table 4: Relationship between dimensions of culture and enhancing mass customisation capabilities.

Table 5: Relevance of key operational factors required by function.

CHAPTER 1

Transitioning into New Manufacturing Paradigm

Introduction—The Need for Transition

This book is based on research that was meant to encapsulate and conceptualise factors that influence the degree of customisation in a manufacturing environment. More specifically, it attempted to analyse what factors affect the transition from standardised manufacturing (mass production or mass manufacturing) to a more customised production system demanding a high level of manufacturing and organisational agility. This is the transition that a manufacturing process undergoes as the degree of customisation is gradually enhanced or increased, and this is referred to as the process of customerisation.

This