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Four New Trends Driving Lean Success

"Lean" manufacturing is as much a philosophy as it is a strategy for eliminating waste, simplifying production processes, and helping companies become more responsive to life's inevitable "exceptions." Expand your lean thinking—and improve your chances for success in the years ahead—by understanding four of today's hottest quality and efficiency trends.

Theory of Constraints
Introduced two decades ago by former physicist Eliyahu Goldratt, the theory of constraints (TOC) uses the scientific method to find constraints in the production process (or bottlenecks), as well as solutions for eliminating them. Among TOC's tenets: document the location of bottlenecks through direct observation or through capacity analyses with tools like Oracle Advanced Supply Chain Planning.

TOC concepts are beginning to be incorporated more widely into commercial products. For example, Oracle's PeopleSoft Manufacturing Scorecard, a real-time production analysis tool for supply chains, includes dozens of predefined key performance indicators. Among them are several metrics organized in a framework that supports TOC methodologies.

Distributed Order Orchestration
A strategy for improving operational efficiency and boosting customer satisfaction, distributed order orchestration (DOO) addresses critical production challenges like how to change processes to reflect new business conditions and how to eliminate error-prone manual responses when exceptions arise.

DOO strives for automated "zero touch" responses, and its ammunition includes reusable, metadata-driven process components and analytics for insights into order lifecycle performance. Done right, DOO can efficiently move orders from booking to fulfillment and replenishment without human intervention. Supply chains can now reach from the order all the way back into supplier raw material inventory.

Six Sigma
With a focus on reducing defects in production processes and improving customer satisfaction, Six Sigma relies on extensive statistical data to continuously find areas for improvement. The scourge of the Six Sigma world is "variability," out-of-spec products that result in disappointed customers and returned orders.

Subsets of Six Sigma include a strategy for improving existing processes known as DMAIC (for define, measure, analyze, improve, and control). To build quality into new processes, Six Sigma proponents rely on DMADV (for define, measure, analyze, design, and verify).

Companies often pair lean and Six Sigma techniques for a one-two punch that eliminates waste and boosts quality. Wastes, some say, can be 80 to 85 percent of total costs.

SOA and BPEL
Although the influence of service-oriented architecture (SOA) and the Business Process Execution Language (BPEL) stretches beyond manufacturing, this market segment sees particular benefits from these technology strategies.

SOA provides an organized framework for using software services-small nuggets of computer code that perform well-defined repetitive tasks, such as running a customer credit check. By stringing together collections of services, manufacturers can create new "composite" applications that address changing business conditions more quickly than when programmers write applications from scratch.

When two or more of these composite applications need to work together, BPEL orchestrates their interactions into a larger business process. Just as SOA brings flexibility to application development, BPEL provides a fast, standards-based way to adjust business processes to meet changes in customer demand.

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