Getting Lean Fast!
Lean is manufacturing without waste. Waste
has many faces--material, time, idle equipment, and inventory are just
a few examples.
Lean is manufacturing without waste. Waste
has many faces--material, time, idle equipment, and inventory are just
a few examples. Most companies waste 70 percent to 90 percent of their
available resources, and even the best lean manufacturers probably
waste 30 percent. Lean manufacturing and cellular manufacturing improve
material handling, inventory, quality, scheduling, personnel and
customer satisfaction.
· Fewer moves
· Shorter travel distances
· Simpler route structures
These lean improvements result in impressive savings and also contribute to savings in inventory, quality, and coordination.
The product-focused cellular layout has fewer interdepartmental moves compared to a functional equivalent. This reduces handling frequency and cost by as much as 90 percent. The cellular layout also reduces:
· The queuing
· Delays
· Tracking effort
· Travel distances are shorter in the cellular layout
According to Sam Bayer, president of Datacraft Solutions, Inc. (Durham, NC), "In addition to reducing the cost of long moves, improved communication regularly enables visual control systems such as those seen in electronic Kanban systems."
According to Bayer, "Every interdepartmental move requires an outbound queue and an inbound queue. Such queues tend to be quite large, because it is difficult to precisely time the completion of each operation and coordinate the subsequent move. Cellular operations dramatically reduce material movement. This consequently reduces the number of queues and the inventory in each queue. Electronic Kanban minimizes the guesswork in these inventory and scheduling processes."
Lot sizes tend to be larger in a functional environment. This partly results from the complexity of scheduling. It is simpler to schedule a small number of large lots rather than a large number of small lots.
Throughput time is directly proportional and correlated to inventory. When inventories shrink in a cellular environment, the average throughput time is reduced proportionately. The reduction in inventory allows capital resources and space for more worthwhile investment. The improved throughput time improves customer response and helps stabilize the system.
While statistical process control (SPC) techniques can improve functional operations, they are easier to apply and more effective in practice with a workcell environment. Most functional layouts use the quality control inspectors to enforce quality. With teams and workcells, quality is more likely to be self-enforced.
Feedback on quality problems is faster in a cell than it is in a functional arrangement. This is because the various processes and people are very close, usually within conversational range. Since teams are often used within cells, team spirit motivates quality improvements.
When suppliers implement lean manufacturing, customers’ delighted response is the most obvious improvement. Response refers to the time required for the manufacturer to react to customer needs.
Rapid and reliable deliveries are a hallmark of cellular manufacturing. This is because the reduction of queues and inventory speed products and components through the system. When rapid delivery is a requirement for a given market, fast throughput or an extensive finished goods stock are the only viable options. In some markets, fast delivery is not important, but reliable delivery is. This translates to the manufacturer delivers the product when promised.
Functional layouts tend to require large lots and infrequent deliveries or they require extensive finished goods inventories. With cellular layouts, it is easier and less costly to manufacture in small, frequent lots. The result is a closer match to the customer needs.
· It gathers and displays a far broader range of information than a typical process map.
· It tends to be at a higher level (five to 10 boxes) than many process maps.
·It tends to be used at a broader level, such as receiving of raw material to delivery of finished goods. · It tends to be used to identify the focus of future projects, subprojects, and/or kaizen events.
A value stream map, often called an end-to-end system map, takes into account both the activity of the product, as well as the management and information systems that support the basic process. This functionality is highly efficacious when working to reduce cycle time, because insight is gained into the decision-making flow in addition to the process flow. The basic idea is to first map your process, then above it map the information flow that enables the process to occur.
Located in Green Bay, WI, Lindquist Machine Corp. (LMC) builds custom machines for U.S. and internatonal customers. The industries LMC serves include food, printing, paper, film, construction and power tools. LMC began an extensive process that improved profit margins and reduced time-to-market by adopting and adapting lean principles to an engineer-to-order environment.
According to Joe Zimmer, LMC’s CFO, "We are a company that has always looked at making major improvements to our business processes to keep up with the marketplace. In January 2000 we realized that we hadn't undertaken a major journey in three years. In 1995 we became ISO-certified, and in 1997 Balance Scorecard approach for continuous improvement was initiated. As we investigated the lean concepts, we realized that this was something that really allows a company to differentiate itself, and if we could pull this off we would be set for the future."
Zimmer realized that LMC costs were not in line with the marketplace. Their goal was not to lose business by price by more than 10 percent. Another area that lean improved was time-to-market. "Our goal was to shorten our delivery time, be faster to market. Our customers often sell the machine, and they can win the business by being faster than their competition. We do not lose any business due to an inability to delivery on a timely basis."
Bottom-line lean manufacturing results for LMC are impressive. Gross profit is 15 to 20 percent higher than on similar jobs before lean. Parts that LMC is running through a cell, where one person is doing the machining and welding, are 50 percent more efficient than parts sent to individual work centers. Internal transactions have been reduced by 40 percent; i.e., 40 percent less paperwork is produced.
Zimmer was especially proud of the fact that, "We have four customers that see us as such a real opportunity to be successful, that they have full-time people physically located in our facility. On average, we have two or three additional customers that are here part of the week. We really have become our customers' manufacturing arm."
There is a high level of dedication required to get and stay lean, the benefits are numerous and necessary; the prognosis for avoiding lean manufacturing: terminal.
For more information contact Thomas R. Cutler, president and CEO of TR Cutler, Inc. (Fort Lauderdale, FL) at trcutler@trcutlerinc.com.
Material Handling Benefits
Lean manufacturing benefits are easily identified in material handling.· Fewer moves
· Shorter travel distances
· Simpler route structures
These lean improvements result in impressive savings and also contribute to savings in inventory, quality, and coordination.
The product-focused cellular layout has fewer interdepartmental moves compared to a functional equivalent. This reduces handling frequency and cost by as much as 90 percent. The cellular layout also reduces:
· The queuing
· Delays
· Tracking effort
· Travel distances are shorter in the cellular layout
According to Sam Bayer, president of Datacraft Solutions, Inc. (Durham, NC), "In addition to reducing the cost of long moves, improved communication regularly enables visual control systems such as those seen in electronic Kanban systems."
Inventory and Scheduling Benefits of Lean Manufacturing
Lean manufacturing benefits extend to inventory, scheduling and production control. The functional layout often presents serious scheduling and inventory control conflicts. Cellular layouts simplify the underlying process and result in a simplified scheduling system.According to Bayer, "Every interdepartmental move requires an outbound queue and an inbound queue. Such queues tend to be quite large, because it is difficult to precisely time the completion of each operation and coordinate the subsequent move. Cellular operations dramatically reduce material movement. This consequently reduces the number of queues and the inventory in each queue. Electronic Kanban minimizes the guesswork in these inventory and scheduling processes."
Lot sizes tend to be larger in a functional environment. This partly results from the complexity of scheduling. It is simpler to schedule a small number of large lots rather than a large number of small lots.
Throughput time is directly proportional and correlated to inventory. When inventories shrink in a cellular environment, the average throughput time is reduced proportionately. The reduction in inventory allows capital resources and space for more worthwhile investment. The improved throughput time improves customer response and helps stabilize the system.
Quality Benefits of Lean Manufacturing:
Functional layouts require the product to move many times between departments with a separate operation at each department. When the product is defective, it is often difficult to pinpoint where the defect has occurred. In a cell, most or all operations occur in one area and among a small team. This focuses responsibility and motivates the team to avoid similar defects in the future.While statistical process control (SPC) techniques can improve functional operations, they are easier to apply and more effective in practice with a workcell environment. Most functional layouts use the quality control inspectors to enforce quality. With teams and workcells, quality is more likely to be self-enforced.
Feedback on quality problems is faster in a cell than it is in a functional arrangement. This is because the various processes and people are very close, usually within conversational range. Since teams are often used within cells, team spirit motivates quality improvements.
Customer Benefits of Lean Manufacturing:
When customer sees improved quality, there is an obvious benefit to both customer and supplier. With full lean manufacturing implementation, customers see faster response to unusual requests for customized products or expedited delivery. They see faster and more reliable average deliveries that make their tasks easier. Cellular manufacturing allows manufacturers to deliver small quantities reliably without holding large inventories. The inherent quality improvements in a cellular layout also find their way to appreciative customers.When suppliers implement lean manufacturing, customers’ delighted response is the most obvious improvement. Response refers to the time required for the manufacturer to react to customer needs.
Rapid and reliable deliveries are a hallmark of cellular manufacturing. This is because the reduction of queues and inventory speed products and components through the system. When rapid delivery is a requirement for a given market, fast throughput or an extensive finished goods stock are the only viable options. In some markets, fast delivery is not important, but reliable delivery is. This translates to the manufacturer delivers the product when promised.
Functional layouts tend to require large lots and infrequent deliveries or they require extensive finished goods inventories. With cellular layouts, it is easier and less costly to manufacture in small, frequent lots. The result is a closer match to the customer needs.
Value Stream Mapping
Value stream mapping is a tool that assists manufacturers understanding of the flow of material and information as a product or service makes its way through the value stream. Value stream mapping is typically used in lean manufacturing and it is different from the process mapping of Six Sigma in these ways:· It gathers and displays a far broader range of information than a typical process map.
· It tends to be at a higher level (five to 10 boxes) than many process maps.
·It tends to be used at a broader level, such as receiving of raw material to delivery of finished goods. · It tends to be used to identify the focus of future projects, subprojects, and/or kaizen events.
A value stream map, often called an end-to-end system map, takes into account both the activity of the product, as well as the management and information systems that support the basic process. This functionality is highly efficacious when working to reduce cycle time, because insight is gained into the decision-making flow in addition to the process flow. The basic idea is to first map your process, then above it map the information flow that enables the process to occur.
Impact of Lean Manufacturing in the Engineer-to-Order Environment:
According to Roger Meloy of Cincinnati-based Encompix, “There is a perception that lean is only applicable for repetitive manufacturers and not engineer-to-order [ETO] manufacturers that make unique, complex products. Part of the problem is that many lean success stories focus on inventory reduction. This is of no interest to an ETO company that makes many ‘one-off’ purchases and does not hold finished goods inventory.” Ultimately, lean is not just about the shop floor. Some of the biggest opportunities for improvement are in business processes and office systems. Eliminating nonvalue-added activities in engineering, estimating, customer quotations, purchasing, shop floor reporting and accounting offers opportunities for dramatic improvement.Located in Green Bay, WI, Lindquist Machine Corp. (LMC) builds custom machines for U.S. and internatonal customers. The industries LMC serves include food, printing, paper, film, construction and power tools. LMC began an extensive process that improved profit margins and reduced time-to-market by adopting and adapting lean principles to an engineer-to-order environment.
According to Joe Zimmer, LMC’s CFO, "We are a company that has always looked at making major improvements to our business processes to keep up with the marketplace. In January 2000 we realized that we hadn't undertaken a major journey in three years. In 1995 we became ISO-certified, and in 1997 Balance Scorecard approach for continuous improvement was initiated. As we investigated the lean concepts, we realized that this was something that really allows a company to differentiate itself, and if we could pull this off we would be set for the future."
Zimmer realized that LMC costs were not in line with the marketplace. Their goal was not to lose business by price by more than 10 percent. Another area that lean improved was time-to-market. "Our goal was to shorten our delivery time, be faster to market. Our customers often sell the machine, and they can win the business by being faster than their competition. We do not lose any business due to an inability to delivery on a timely basis."
Bottom-line lean manufacturing results for LMC are impressive. Gross profit is 15 to 20 percent higher than on similar jobs before lean. Parts that LMC is running through a cell, where one person is doing the machining and welding, are 50 percent more efficient than parts sent to individual work centers. Internal transactions have been reduced by 40 percent; i.e., 40 percent less paperwork is produced.
Zimmer was especially proud of the fact that, "We have four customers that see us as such a real opportunity to be successful, that they have full-time people physically located in our facility. On average, we have two or three additional customers that are here part of the week. We really have become our customers' manufacturing arm."
Fast Lean Manufacturing:
Lean is so essential to excellence because a higher performance manufacturer will coordinate an entire lean supply chain and develop a unique competitive advantage. Manufacturers who quickly and continuously implement lean principles devise a market-based responsiveness and capture significant market share.There is a high level of dedication required to get and stay lean, the benefits are numerous and necessary; the prognosis for avoiding lean manufacturing: terminal.
For more information contact Thomas R. Cutler, president and CEO of TR Cutler, Inc. (Fort Lauderdale, FL) at trcutler@trcutlerinc.com.
