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Plant tours – 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
From time to time we have a chance to see another manufacturing plant. At CKCA meetings, the plant tours are important to draw members. During the LIGNA show the major machine manufacturers take busloads of visitors to modern plants. The Bluewater Wood Alliance organizes plant tours combined with a peer review of the plant. Recently 
we had the opportunity 
to tour the Toyota plant in Cambridge, Ontario. This 
was a visit to the Holy Grail 
of Lean manufacturing.
As we see manufacturing plants and walk through different woodworking factories, how much do we pick up? Older colleagues have told me stories about when they provided tours for a Japanese delegation in the late ‘70s. After the plant tour, with no cameras allowed, the small group documented their observations. Layout, material flow, manufacturing model, machine model, material suppliers, as well as scheduling principals had been understood and memorized. Visiting a plant in such a way is an acquired skill. Dr. Goodson (USA), with similar experiences in the ‘90s, decided to develop a system to read a plant quickly. He claims that by seeing the plant, he can estimate with reasonable accuracy the manufacturing cost.

Picking up ideas for your own plant
We should take any available opportunity to visit other plants. You will always learn something. It could be something new, it could confirm some of your actions at home, or it could give you samples 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 very 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 providing them with 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 have 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.
A trained eye can see things during a plant tour that 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 your plant looks 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 (at same or different times) and the results are immediately summarized. By combining the observations, gaps and omissions are reduced. The following eleven categories systemize the approach:

Customer satisfaction
Do the employees genuinely know their internal and external customers? Customer satisfaction has center stage. 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, lines marking aisles…)? Does the factory appear to be cleaned regularly, or was it just cleaned for your visit? Is the material stored properly to prevent deterioration and damage? Does the material next to the machines relate to current orders, or are the workplaces cluttered with left-over materials? Do employees step-on/walk over material (i.e. 
shoe print on veneer boards...)
Visual management
Are company goals posted? Are the displayed Key-Performance-Indicators relevant and up-to-date? Is out of place material/obsolete material easily visible? Are shadow boards and other visual aids implemented and sustainably used? 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? Is 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 work place to work place? How often is the material moved? Are machines placed together in cells?
Level of inventory and 
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? Remember, lean plants look rather empty.

Team work and motivation
Are there company/department goals/targets prominently posted and are the current levels of performance (out-put, safety) displayed? Are there practical work instructions on the different work places? Are employee areas kept clean in a decent manner? Do employees relate and understand the meaning of the Key-Performance-Indicators? How do the people relate to each other? How is their body language?

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? Are the tools on the floor, in the machines or mixed with sawdust?
Management of complexity 
and variety of product offering
Are work instructions clear and precise, showing customer’s name/order? Is there a functional document control in place? Do you see a lot of the employees ‘studying’ work orders and developing handwritten cutting lists?

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

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?

It is possible to grade the company on 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 then lead to a gap-analysis.
Plant tours are a valuable resource and a simple way to learn from peers.
Plant tours are an important learning and reference tool. To be effective you need apply methodology, develop an eye for details and learn how to recognize critical facts.

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