Expert opinions, TECHNOLOGY

Strictly business: Implementing lean production tools to reduce losses

How do you exclude non-productive expenses in business that may be caused by pretty much anything, from controlling the quality of raw materials to the quality of output? The answer is in a special approach to management and quality assurance known as lean production. How is this concept realized in Russia today and what role do domestic digital tools play in this?

Maxim Bogodvid / RIA Novosti

Lean production as a concept was coined in Japan but the idea itself is embedded into the market since the beginning

In the past years, Russian businesses have taken up the trend for implementing lean production. It goes back to the Japanese economic miracle of the 1950s when Toyota, a national car manufacturing company, gradually entered the world market to compete successfully with the industry’s leaders from the United States.

The father of Toyota, Taiichi Ohno, and manufacturing practices expert Shigeo Shingo springboarded the company’s success by developing the principles of business organization that would later be called lean manufacturing.

Lean manufacturing is an approach to management that focuses on getting rid of everything that is not needed in the production and managerial processes and that does not create value for the end user.

Waste can be anything

For instance, a non-ergonomic placement of manufacturing equipment might eat away time if employees have to move commodities or the end product around. Same goes for long and frequent meetings that bring no result and that are quite expensive due to the involvement of high-ranking staff. Sometimes it is useful to calculate the cost of such meetings and devote as little time as possible to them. Another example is a logistics chain that includes the delivery of parts from a remote region when it is possible to purchase them in the home region.

How the introduction of lean manufacturing deals with the issue of workforce productivity in Russia

Workforce productivity, that is, the amount of goods and services that a worker (or another working unit) produces in a given amount of time, is closely related to lean production.

In Russia, workforce productivity is low as compared to other developed countries. According to a survey conducted by S+Consulting, quoted by Kommersant, labor productivity in Russia is 5 times lower than in the US and 3 times lower than in Germany (as of April 2023).

Among the first Russian companies to introduce lean production technologies are Rosatom, Lukoil, Sberbank, as well as the Rostec state corporation and enterprises in its contour, including KAMAZ, Helicopters of Russia, Technodinamika, Kalashnikov Concern, the United Engine Corporation, and others.

According to Economic Development Minister Maxim Reshetnikov, about a half (or over 2,000) Russian companies taking part in the Workforce Productivity national project were able to increase production speed by over 30% and output by 50% in the period between 2019 and 2022. It helped support the Russian economy which has been under severe pressure from the Western sanctions. According to the ministry, over 5,000 enterprises, 1.6 million workers and over 700 business activities in the country took part in the national project as of August 2023.

IT tools will help make business more efficient

The lean manufacturing concept presumes that the company should constantly work on detecting and eliminating real or potential losses, that is, get rid of all operations that consume resources and do not increase the value of the product for consumers. These efforts include carrying out all sorts of calculations and process automation. Hence, the successful application of lean production principles directly depends on the use of specialized digital services by businessmen involved.

Russia’s IT solutions market has something to offer in this regard – that is, specialized digital platforms to help businesses streamline business processes, automating them to the fullest extent. All data on such platforms is stored directly on Russian servers, which entirely lines up with the concept of import substitution, fully protecting service users from possible sanctions by “Western partners.”

Lean entrepreneurs have plenty options to choose

Domestic IT solutions for business process automation as part of the efforts to introduce the lean production concept boast a wide range of functions. Certain products are tailored for collecting initiatives, while others are geared towards building a team; there are products for visualizing specific lean production projects (dashboards) and those to identify weaknesses in production and management, as well as those that have all functions mentioned above. The latter is the group I would recommend paying attention to.

A tool that combines all of the above functions would be the most convenient option, allowing you to aggregate various services on a single platform and reduce the scope of applied IT solutions.

Successful lean production project will become a digital example for everyone

Such universal tools also include a post-project monitoring function as well as the ability to utilize the best practices for project implementation. This means that a lean production project implemented by an enterprise of a group of companies could serve as an efficient and financially-rewarding option and template for other companies.

Flexibility is another advantage offered by domestic digital platforms tailored for a comprehensive transition to working with lean production tools. They provide an option of prompt interface customization, such as creating various columns, lines, features and criteria to fill them with initial numerical data and variable names.

Digital platforms implementation brings extra effect

Comprehensive IT tools allow business executives to promptly obtain essential data and use it for making strategic decisions, monitor the launched projects, and measure KPIs of the top managers in charge of their implementation.

Additionally, this service provides the opportunity for distributing projects by priority to identify the most profitable ones, selecting a specific team for each project. This essentially allows for the maximum streamlining of business processes for greater profitability and efficiency.

By Mikhail Pleshanov, Founder and Head, IN.TOP

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