Applying lean manufacturing tools to the management of operational and network risks

Risk management has become a growing concern for manufacturers. Academics in the field have classified risks into operational (internal), network (supply chain) and environmental (natural, political and external) risks. Lean Manufacturing tools have been used to standardize and stabilize manufacturing processes, to reduce variability, to increase machine reliability, to incorporate quality into processes and to make the link with suppliers tighter, more efficient and dependable. All of these characteristics suggest that many of the Lean tools could be used to foresee and mitigate risks, and even to react to unexpected events. In this paper we examine the most important lean tools and relate them to the variables that are changed by them. We then examine those variables to identify the risks associated to them and propose a structured procedure for lean practitioners to apply the tools they already are familiar with and take explicit advantage of them in the corporate risk management effort.