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The journey to lean manufacturing

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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

You have started your lean implementation some time ago. You have sent some of your people to lean training courses, you’ve read some articles and you start practicing 5S.

The naysayers in the company question the benefits, especially the cost involved, because there have been no cost benefits so far - quite the opposite - it has cost you money.

5S is the most quoted chapter when it comes to lean manufacturing implementation, but 5S will not succeed on its own. 5S is house keeping with a very practical and effective methodology, all starting with the letter S:

SORTING - Eliminate all unnecessary tools, parts, and instructions. Keep only essential items.

STRAIGHTENING OUT - There should be a place for everything and everything should be in its place.

SHINING - Clean the workspace and all equipment.

STANDARDIZING - The clean up should be consistent and standardized. All workstations for the same job should be identical. All employees doing the same job should be able to work at any station with the same tools that are in the same location in every station.

SUSTAINING THE PRACTICE - Do not allow a gradual decline back to the old ways. Don’t get me wrong, I like 5S and I would suggest it as the starting point for any new lean implementation. Every company should do it. I consider it a prerequisite for getting into lean manufacturing. It is also low risk. By cleaning up, you are not changing your business model or your organization and you are not changing the business flow. The only thing you are doing is to show management commitment. Implementing 5S shows the organization that changes can be planned, executed and sustained. Do not start any other, more challenging projects unless you can implement improved housekeeping. If you cannot execute and sustain your plan to keep your plant orderly, what makes you think you can implement more difficult tasks, such as organizational changes and process changes?

5S is not the goal; it is a steppingstone with a lot of symbolism.

Back to basics

Lean is not just reducing inventory, renaming minimum – maximum inventory as ‘Kanban’ and reducing the batch sizes. Yes, all of the above are results and tools of lean, but it goes much deeper than that.

Lean manufacturing requires you to reduce waste. This is not just the waste we find in our waste bins; it is all types of waste. Lean manufacturing identifies seven types of waste:

OVERPRODUCTION: Making more parts than you can sell.

DELAY: Waiting for processing, parts sitting in storage, etc.

TRANSPORTING: Parts/materials. Moving parts to various storage locations, from process to process, etc.

OVER-PROCESSING: Doing more ‘work’ to a part than is required.

INVENTORY: Committing money and storage space to parts not sold.

MOTION: Moving parts more than the minimum needed to complete and ship them.

MAKING DEFECTIVE PARTS: Creating parts that cannot be sold ‘as is’ or that must be reworked etc. Lean manufacturing is the continuous improvement in the operation to reduce any of the seven types of waste.

What does this mean for the individual company?

It depends! Where are the existing pressures the company is facing? If product variety, lead-time pressure, manufacturing cost, space for work-in-process and cost of quality are some of the front line challenges than we should start the lean implementation there.

Manufacturers like big batches. It requires less frequent set-ups, less paperwork and also fewer ‘mental set-ups.’ One operator can work on one job for a longer time before he/she needs to think about the next one. We usually like that. It also allows you to make a few more extra pieces just in case things go wrong and you have fall-out. One extra piece in a batch of 100 pieces is not such a problem than one piece will be in a batch of only 10.

But big batches conflict with product variety, lower inventory levels and/or shorter internal factory lead-time. Something needs to give.

How long does it take for your product to travel through your manufacturing process chain? How much time does it take from the first operation (i.e. cutting) to the last (shipping)? When trying to reduce the factory throughput time, working faster or having faster machines does not make the big difference. Here is an example: An average kitchen cabinet may require three hours of direct labour. However, the factory throughput time in our example is eight working days. So we work three hours on the cabinet, but it takes about 64 hours to get through. What happens during the other 61 hours? The product is waiting. According to the list above, that is waste.

Challenging your operation to reduce the through-put time will in most cases require reducing your batch size. In order to reduce your batch size without increasing your cost will require you to reduce your set-up time proportionally.

As you reduce your batch size you will recognize that your schedule might be more sensitive to ma- chine and tooling breakdowns, which impact the operation flow. These problems may have always been there, but now they are more visible.

The same goes for issues such as on-time deliveries from suppliers or in-house quality production. As you reduce batch sizes and as you take slack out of the system, those imperfections are starting to create delays and disturbances in the operation. Improving the quality (quality system, training, process improvement...) and working with your supplier will elevate the performance level.

The elevated performance level allows you to tighten the system requirements by reducing the batch sizes and reducing the factory throughput time again. Every time you tighten the system you will recognize the weakest part of your organization and it allows you eliminate or at least minimize it.

Implementing lean is not a switch you can flick. It is a continuous process. The more you achieve the more opportunities open up. And as you sustain those improvements your financial numbers will improve as well.

HOW MUCH FURTHER?

The most common answer to that question - even from companies well into the implementation of lean manufacturing principals - is that they are ‘just beginning.’

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