While many companies are positioned to change and innovate as new technologies take precedence in the manufacturing industry, news source McClatchy DC reported that adopting lean manufacturing principles is helping numerous manufacturers get back on their feet. Lean manufacturing practices give companies a competitive advantage by allowing them to reduce manufacturing costs, but sometimes it's still not enough. That's where nearshoring to Mexico comes in and becomes part of the lean manufacturing process.
What is Lean Manufacturing?
Lean Manufacturing is a process that attempts to improve production efficiency by eliminating practices that can cost companies time, productivity, and money. The process is conscious of abundant waste in the manufacturing system and provides a value-adding approach that can be implemented into a company's continuous improvement plan. Lean manufacturing was introduced by Toyota to implement a manufacturing process that eliminates waste and disorganization. The five principals that enable this process are listed as:
- Identifying Value and Minimizing Waste
- Mapping the Value Stream and Eliminating Non-Value
- Creating a Value Process "Flow" and Achieving Workplace Safety
- Establish Pull: What are the Logistics and Time to Market
- Understanding the Value of Lean and building it into a Corporate Culture
Lean Manufacturing Gaining Ground in U.S.
McClatchy reported investing in technology is helping American companies become lean, resulting in a rise in output despite employing fewer workers.
Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation, told McClatchy that while the manufacturing industry is recovering, it has a long way to go.
"It's not like everything is great in manufacturing," Meckstroth said. "It's recovering. Demand is picking up. We're trying to get to recovery of the previous cyclical peak and get on a growth path. First you've got to recover from what you lost."
According to Manufacturing.net, lean manufacturing is one way for companies to optimize their efforts and productivity to become successful. Even if U.S. companies are able to implement numerous lean manufacturing principles, such as using quick identification tips, standardizing processes and investing in innovative technology, some manufacturers might find that high labor costs and expenses of producing goods in the U.S. don't outweigh the benefits.
Profitable Options Nearshore
Lean manufacturing operational strategies may only get U.S. companies half-way to their profit goals. Nearshore manufacturing to Mexico is the logical next step for companies to remain competitive. Producing products in the U.S. is more expensive than manufacturing in Mexico, and manufacturers are already having trouble finding skilled workers for their U.S. plants. Nearshoring to Mexico reduces travel time and costs, and also provides a network of suppliers and industry skills that goes hand in hand with the five principles of lean manufacuting mentioned above.
As more companies adopt lean manufacturing to recover from the economic downturn, many will turn their eyes toward Mexico for its low cost manufacturing environment.