By Iván Pérez, COO

Master in Project Management and PMP

Finding methodologies or strategies that can help us to improve the processes and to be more effective and competitive is a constant need for companies, including those in the alcoholic beverage industry.

One methodology, that is based on the Toyota Production System and was introduced in 1990 with the publication of The machine that changed the world (some authors even say that it comes from the Benjamin Franklin´s essay The Way to Wealth in 1911), is still used by Toyota and other companies around the world, even by many of them outside manufacturing industries. This is Lean manufacturing.

Lean Manufacturing is not only for production companies, it is also for everyone who wants to improve their profitability by reducing costs or becoming more efficient. By definition “Lean manufacturing is a production process to maximize productivity while simultaneously minimizing waste”. In the spirits industry, we can apply Lean methodology not only in the production but in the Supply Chain which at the same time can help us to reduce our carbon footprint. 

The most common wastes include 8 aspects: unnecessary transportation, excess inventory, unnecessary motion of people, equipment, or machinery; idle workers or idle equipment, overproduction, over-processing, defects, and unused talent.  

But how can we implement this methodology in the spirits industry? Lean is known for 5 principles that explain how to do that:

1. Value: this is defined by the customer and relates to how much they are willing to pay for the product or services. So, companies, including the drinks industry, need to ask themselves what is valuable for their customer, then they can create or offer products or services that have only what is necessary, and if companies remove all the unnecessary aspects can give optimal prices to their customers.
2. Map the value stream: here is when the analysis to identify waste and methods of improvement starts. It is important to analyze the flow of the information, the materials required, each step in the supply chain, and the entire lifecycle of a product/service to identify anything that doesn´t add value and needs to be removed. At first sight is difficult to find the wastes, so it is needed to map the processes involved and do it together with a specialist team that can identify easier all the wastes.
3. Create new flow: it is important to eliminate functional barriers and identify ways to improve lead time. Once identified the waste it is very important to set the changes and implement them within a deadline. After implementing it we need to set a review to evaluate the effectiveness of the changes.    
4. Establish a pull system: nothing is bought or made until there is demand. It also means that teams only get involved in new tasks if the previous ones have been completed to allow the team to adapt to the changes or new activities.
5. Continual improvement: there is no end point, all companies need continuous improvement processes to survive and be competitive in the market, and as always there will be waste to eliminate, it is recommended to apply the lean principles constantly. This requires a constant evaluation of the whole operation to keep improving. The important part is not reaching the peak but staying there the rest of the time or even setting a new goal of improvement.

It is common to think that these kinds of methodologies are not meant for the spirits industry, but in reality, all of us have unnecessary movement of transportation between the production and until the product reaches the end consumer, we have also difficulties keeping only the needed inventory and avoid the excess of it, another common issue is to waste our personnel resources by not taking advantage of their strengths, thus we suggest to try the methodology, follow their principles and becoming more efficient with every day.

References:

D. Daniel. “Lean manufacturing (lean production)”. TechTarget. [Online]. Available: https://www.techtarget.com/searcherp/definition/lean-production#:~:text=Lean%20manufacturing%20is%20a%20methodology,not%20willing%20to%20pay%20for

P. Landau. What is Lean manufacturing? ProjectManager. 2021. [Online]. Available: https://www.projectmanager.com/blog/manufacturing/what-is-lean-manufacturing

TWI. “What is Lean Manufacturing and the 5 principles used”. TWI. [Online]. Available: https://www.twi-global.com/technical-knowledge/faqs/faq-what-is-lean-manufacturing