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CANLAK Leaderboard November 2019
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Plant tours and how to read a plant

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Operations Excellence by Sepp Gmeiner
Sepp Gmeiner is a partner with Lignum Consulting. For feedback, questions and/or suggestions please email s.gmeiner@lignum-consulting.com

Most of us have seen other manufacturing plants and walked through different woodworking factories. How much can you pick up in a walk through? Japanese visitors systemized this years ago. I’ve heard first-hand stories in the late 70s when a group of Japanese visitors, after a plant tour with no cameras allowed, could document, map and assess the entire factory from memory right after their tour while in the bus to the next factory. In the USA, Dr. Goodson had similar experiences in the 90s, but decided to develop a system to read a plant quickly.
Picking up clues and information during a brief plant tour is an acquired skill. This can be of great value in many situations.

Picking ideas for your own plant
We should take any available opportunity to visit other plants. You always learn something. It could be something new, it could confirm some of your actions at home, or it could give you examples of how not to do something. There is always the question: should you allow visitors or competitors onto your shop floor? My standard answer is yes. This answer comes with the understanding that such visits are reciprocated. The only instance where I would not show my plant is if I have something outstanding, revolutionary, or new, which could be copied after seeing it once. Toyota, as the leader in manufacturing, allows plant tours freely. “What you see on our shop floor is already the old stuff; the new is implemented tomorrow, and by the time you catch up to that we will be ahead again…” was their explanation. 

Assessing potential suppliers and partners
If you want to have a good supplier or partner, you need to understand each other’s needs. You need to learn to communicate with each other. Just exchanging purchase orders and drawings does not give you the full benefit of the relationship.
How do they ensure quality? Can they accommodate rush orders? What is easy for them and what is difficult? Learning from your suppliers and teaching them some of your knowledge will benefit both of you.

Evaluating potential take-over companies
Assessing companies based on the books and by the accountants’ review will not give you the full picture or might even give you the wrong picture. We’ve all heard stories of takeovers gone wrong. A skilled plant tour sees beyond the numbers and can assess the level of Lean, customer responsiveness, quality assurance, safety performance and management culture. For example, the chemical company DuPont has dropped takeover opportunities because the takeover targets had a safety performance so far behind, it would not have fit in their safety conscious culture.
A trained eye can see things on a plant tour, which are not in the books. The age of the equipment is not as important as it is to see if the machines are the right machines to do the job. For example, is the company forced to produce in larger batches because the change over takes too long? 

Self-assessment of your own facility
Self-assessment is just the reverse of the above two points. How do our customers see us, or how do potential purchasers see our company. Being self-conscious about how you are and how you look to visitors enables you to work on changes. It is then up to you to make sustainable real changes or to just ‘put lipstick on the pig.’
It is surprising how accurate a quick assessment can be. The accuracy increases when more than one person is taking the tour (same or different times) and the results are immediately summarized. By combining the observations, gaps and omissions are reduced. The following 11 categories systemize the approach. 

Customer SATISFACTION
Do the employees genuinely know their internal and external customers? Would they buy this product? Does the company share customer satisfaction scores?

Working environment - Order, cleanliness, safety
Is the factory clean and orderly? Is there sustainable progress in 5S? Are workplaces, tools, WIP and inventory identified (location, label, sorted)? Does the factory appear to be regularly cleaned, or was it just cleaned for your visit? Is the material stored properly to prevent deterioration and damage?

Visual management
Are company goals posted? Are the key performance indicators that are in place relevant and up-to-date? Is out of place material/obsolete material easily visible? Are shadow boards and other visual aids implemented and used sustainably? Is Kanban replenishment implemented for some of the consumables, tools, WIP or raw materials? Is paperwork (work orders, drawings, working lists, schedules) located in defined locations? Is it intuitively or explicitly clear what to work on next?

Scheduling system
Is the factory operating on a pull-system with an established pacemaker? Are the information required by operators and/or machines delivered in time and efficiently? Is there a visual sign to show the on-time performance of the factory?  Is there a heightened sense of urgency when orders are in danger of being late? Does the manufacturing facility show any awareness of their bottleneck? Are there any signs of ability to manage seasonal or other capacity fluctuations?

Space utilization, material movement and product driven layout
What percentage of the floor space is used for manufacturing and how much space is used to store WIP and raw material? How is the material used from workplace to workplace? How often is the material moved? Are machines placed together in cells?

Level of inventory and work in process
How old is the oldest material on the shop floor? Is there obsolete material mixed in the inventory? Are the ‘corners’ full of old material? Is the FIFO inventory system working? Are there restocking arrangements (Kanban) in place to replenish inventory levels? Is there damaged material mixed in the WIP and raw material? Is material brought to the assembly lines at predetermined locations and quantities?

Teamwork and motivation
Are there company/department goals/targets prominently posted and are the current levels of performance (output, safety) displayed? Are there practical work instructions on the different work places? Are employee areas kept clean in a respectful manner? Do employees relate and understand the meaning of the key performance indicators?

Condition and maintenance of equipment and tools
Are the machines cleaned and free of debris? Are there old dust and oil stains on, under and behind machines? Are spare parts and unused machine units around the machines? Are the worktables cluttered with tools? Are adjustment knobs/handles, gauges and dials broken or missing? Are air hoses leaking compressed air? Are current maintenance schedules posted? Are safety covers removed? Are adjustable wrenches instead of proper tools used to adjust machines?

Management of complexity and variety of product offering
Are work instructions clear and precise? Work instructions showing customer’s name/order? Is there a functional document control in place?

Supply chain integration
Is supplier material quality inspected? Are there quarantine areas for rejected product/material? Are there signs of supplier measurements in place?

Commitment to quality
Are there any signs of continuous improvement projects in progress? Are there any signs for project management of new product introduction? Are there samples of fail safe methods to prevent defects? Attention to quality is easy to spot. Are employees conducting prescribed quality checks and recording measurements, keeping charts and metrics? What is done with non-conformance material/product? Is it hidden or are there clear designated areas? Would you purchase this product over similar available products?

Conclusion
It is possible to grade the company in each of the 11 categories. This would create a score, by which you can compare companies. It would also allow you to rate the same company in a ‘before and after’ situation.
Also, organizations can do self-evaluations and this exercise can lead to a gap-analysis.
Plant tours are a valuable resource and a simple way of learning from peers. However, when you learn how to see, these plant tours become more effective.

Sepp Gmeiner is a partner with Lignum Consulting. For feedback, questions and/or suggestions he can be contacted at s.gmeiner@lignum-consulting.com

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