How important is lean manufacturing to my company?


How important is lean manufacturing to my company? This is a question many executives across various industries and markets are finding themselves asking these days.

With respect to OEMs that outsource their product manufacturing and or design, executives are seeing increasingly competitive companies vying to expand in or, take away, their share of the market.

Meanwhile, contract manufacturing and original design manufacturing (ODM) executives are looking for ways to differentiate their service offerings when competing to win outsourcing programs from OEM executives focused on ways to reduce waste; lower supply chain costs, and increase shareholder value while developing an edge over the competition.

One segment of findings from the electronics outsourcing industry survey not previously released in our 24-page survey report (available here) confirms OEMs and electronics contract manufacturers at least invest some thought in lean manufacturing.



Some companies go a step further and invest the money and the time in implementing lean principles and developing lean cultures in their organizations — thereby also helping such organizations improve their chances of faring better with regards to managing their business.

Roughly 90 percent of OEMs that are currently outsourcing rank the importance of their electronics contract manufacturer or ODM having some degree of lean manufacturing capabilities as part of its service offering between ‘somewhat’ and ‘very’ important (see chart).

Meanwhile, most OEM survey respondents who indicated they are not outsourcing / yet rated the importance of lean manufacturing capabilities as part of a potential outsourcing partner’s service offering as ‘important’ when selecting an electronics contract manufacturing or ODM partner.

One revealing aspect of these particular survey findings on lean manufacturing is the disparity between the value of lean manufacturing as it relates to the OEM executive and the importance of lean manufacturing as it relates to the outsourcing companies trying to win OEM business.

It appears many contract manufacturing executives have not yet caught on in sensing the importance of lean manufacturing as have their OEM executive counterparts.

While there are a few contract manufacturing companies that have solid lean manufacturing programs either already in place or, underway, developing a true lean culture within large organizations can take years.

This can be because lean manufacturing is not easy to implement when done properly. If it were, more companies would be parading the positive outcome on their bottom-line, as say, Toyota, with its now infamous Toyota Production System (TPS).

As with Toyota, companies trying to implement lean manufacturing across global operations can expect to be faced with more complex challenges which take time, money, and dedication to overcome. After all, Toyota did not come to dominate the worldwide automobile manufacturing market overnight or, by mistake.

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