Posts tagged ‘integrity’

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 2 of 8. The O in DOWNTIME

Many manufacturers believe in the traditional long runs of equipment because it is supposed to be more efficient to run a big batch versus running several shorter batches that include change-overs. Long runs require large inventories. Large inventories tie up large sums of money and keep our customers waiting longer. Thus, long runs reduce our ROI! Manufacturers that are leading their industries have found that when change-over times are drastically reduced and simplified, they can change-over more often and please more customers.

Over-Production waste occurs when we manufacture, assemble, or build more than what is needed. We make something just-in-case instead of Just-In-Time (JIT). Inaccurate scheduling, long lead times, long changeovers and not being close enough to our customers to understand their changing needs, leads us to longer production runs. We worry that our customer might need more while we have to suffer with the associated cost of unsold goods or services.

LOOK FOR processes producing more than is being “pulled” by the customer and requires storage between processes.

REDUCE BY improving Change-over and Set-up times and Line Balancing (Balancing Production Lines).

Quick Change-over and Set-up times on smaller and more flexible equipment make it easier to please many customers while reducing the overall cost of holding large quantities of inventory that is waiting for production opportunities. Drastically reduce change-over times requires an in-depth 2 step analysis and documentation of the process. The first step is to identify and move as many of the now internal (“power off”) activities to external (“power on”) activities. This first improvement step cost almost nothing to change, but are sometimes the hardest to implement because of years of old habits and resistance to change. The next step is to reduce the time required to perform the remaining internal activities. A valuable resource available on the subject is A Revolution in Manufacturing: The SMED System by Shigeo Shingo. His referral to SMED stands for Single Minute Exchange of Dies, and he believes the target for all change-overs should be 9 minutes or less. If you put together a cross-functional team from maintenance, operations, quality assurance and the tooling department (if it is separate from maintenance), the results can be amazing. These people have many ideas on how to improve change-overs and reduce the time required. They need to be empowered to suggest, plan and implement these improvements.

Line Balancing is simply leveling the cycle time for all operations within a line or process. It is building the cycle time concept into the standardized operations of a production line for maximum efficiency. Line balancing smooths work tasks and operator motions to create a harmonious and uninterrupted flow of product through the process steps. Workers learn to identify those processes that are out of balance with others and how to bring them back into line. While most companies assign the duties of measuring and improving production lines to process engineers, there ARE things that a team of line personnel can measure and examine for improvement opportunities. These people handle the process daily and understand the impact that balanced flow has on through-put, lead time to the customer and inventory levels, all of which play a very important role in the financial success of the organization.

What financial impact is Over-production having on your organization?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

July 12, 2012 at 8:46 am 4 comments

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 1 of 8. The D in DOWNTIME

Some waste exists in every system. From manufacturing and assembly, to hospitality, healthcare, transportation, and social services, some waste is hidden within all processes. Identifying and eliminating these hidden wastes saves millions of dollars every year for those organizations that have embraced and continuously use Lean assessments. These wastes fall into eight basic categories: Defects and rework, Over-production, Waiting, Non-utilized resources, Transportation, Inventory, Motion, and Excess processing. As listed here, the 8 wastes are most easily remembered using the acronym “DOWNTIME“.

Defect and rework waste happens when we do not have robust preventive systems that include Mistake Proofing, or Poka-Yoke, techniques. When we cause a defect or an error and pass it on to the next operation, or worse, pass it on to the customer, we are accepting rework as part of the process. We lose money when something is manufactured, assembled or serviced twice, while our customer will only pay us once for the goods or service.

LOOK FOR defective, partial or un-completed products or services and completed units that are re-worked or thrown away. Stacks and piles of items anywhere in the process are good indicators of waste.

REDUCE BY improving Visual Controls and initiating more complete Standard Operation Procedures. Implement Mistake Proofing or Poka-Yokes at the source or the place in the process where errors occur.

Visual Controls can help employees monitor the status of production or services at a glance and help to identify developing bottlenecks that will need to be cleared to keep operations running smoothly. Managers can keep employees at all levels informed of current production schedules, performance levels and accomplishments with large colorful Visual Controls. Worker assignments, qualifications, training levels and suggestions can be displayed to improve morale and give recognition using Visual Controls.

Standard Operation Procedures (SOPs) must be simple, user friendly and helpful tools, not unnecessary burdens. Inputs from all areas of the organization need to be formed together to supply all of the information required for doing the job correctly the first time. The ultimate goal of an SOP is to document the best way to perform a job for your situation of materials, equipment, location and people. The SOP should be written specifically for your situation. This will assure that you really are doing the work in the best way – at least until the next improvement come along.

Mistake Proofing, or Poka-Yoke, is the method of applying techniques to eliminate the possibility of errors occurring. Poka-yoke (poh-kah yoh-keh) or more literally avoiding (yokeru) inadvertent errors (poka) was coined in Japan during the 1960s by Shigeo Shingo, a pioneer of the Toyota Production System. Ideally, poka-yokes ensure that proper conditions exist before actually executing a process step, preventing defects from occurring in the first place. Where this is not possible, poka-yokes perform a detective function, eliminating defects in the process as early as possible. Workers, engineers and managers work together to establish procedures and design devices to prevent errors from occurring at their source of origin. The most economical and least costly time and place to detect and prevent errors is at the start of the process.

Can a substandard product or service be produced or performed and passed on to the next step in your processes?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

July 5, 2012 at 7:04 am Leave a comment

How to Achieve Operational Excellence: Part 2 of 2 – Achieving Operational Excellence

In order to achieve operational excellence in this global economy, organizations need to change their perspectives on how to manage their core competencies; they must change from a focus on maintaining the status quo, to one that is continuously searching for better and rational ways for managing those core competencies. Organizations must continuously look for new and rational ways (strategies, capabilities, methodologies, and solutions) to enable the continuous effective and efficient management (optimization, transformation, and sustainment) and leverage their business’ core competencies to meet the needs of customers and /or stakeholders.

They will need to: (a) develop a mature capability for accurately identifying customer’s/stakeholder’s needs, (b) define those processes and metrics that employees will have to follow and measure to meet those needs, (c) develop employees capabilities to carry out those well defined processes that meets the needs of its customers/stakeholders, (d) fuel those business processes with timely, accurate, measurable and relevant information/data/metrics, and (e) support them with the right information technology for their effective and efficient performance.

Question: Are your Operational Excellence initiatives aligned with your organization’s core competencies?

June 13, 2012 at 2:45 pm Leave a comment

How to Improve Employee Satisfaction and Retention AND Reduce Labor Costs

Human capital in particular is a critical part of a plant’s success, and needs to be nurtured through leadership, training and other education programs. Ineffective monitoring and mentoring of employees through the lean process negatively impacts the entire process and product quality in particular. The employer has to constantly create enthusiasm with all employees and always pat them on the back for their contribution, no matter how small or how large. Lean always works when the proper leadership strategy is used to implement it. As manufacturers use their new cost efficiencies to wring more output from fewer employees, care must be taken to select the correct labor reduction.

This became a severe issue at one company where the increasing rate of returns due to production quality issues was negatively impacting sales growth. The return rate of product measured in credit dollars was 6% of net sales. The Best-in-Class industry average was 3%. Due to the recent sales revenue decreases, management decided to offset the decreasing sales by reducing the labor force. Unfortunately, the first trims included most of the QA/QC personnel because they were considered to be not directly involved in the daily production throughput of product and thought of as a cost center. Upon joining the company, one of my first assignments was to address the quality issues. By building and leading a cross-functional team which developed, implemented and maintained a successful quality control program based on newly established employee and supplier performance metrics, the team resolved the poor product quality issues. Sales increased 12% in less than 1 year without any increase in labor headcount. Our efforts also resulted in the unanticipated recognition of the flagship facility, by the corporate executive committee, as Quality Factory of the Year for two consecutive years. The program was recognized by the corporate office as a Best Practice and rolled out to the licensee facilities; and I was awarded the Manufacturing Manager of the Year.

April 2, 2012 at 5:47 pm 3 comments

Do You Need an Operational Strategy for Remaining Competitive as a US Manufacturer? Embrace LEAN Manufacturing

Firms that fail to fully exploit the strategic power of operations will hamper their competitive abilities and be vulnerable to attack from those competitors who do take advantage of their operations strategy. To exploit the power of operations effectively, operations must be involved throughout the whole of the corporate strategy. Corporate executives sometimes assume that strategy is only for marketing initiatives. Erroneously, they assume that operations have the flexibility to respond positively to changing demands. These assumptions place unrealistic demands upon the operations function. In the run up to the global economic downturn of 2008 and 2009, to a large extent, manufacturers had given up on improvement initiatives such as Lean. Initiatives were still prevalent but core principles had not been adhered to. A “build it and we can sell it” attitude had been adopted with a narrow focus on pure output maximization. Executive management was focused on decreasing headcount and supporting corporate sustainability issues. In years past the focus around head count was all on an aging workforce and preserving tribal knowledge in more automated work flows.

Since the collapse, manufacturers have responded to business changes with aggressive cuts to inventory and head count. With the recent cuts in employment, today it is all about learning to do more with fewer people by increasing flexibility, cross training, and ensuring safety requirements are not sacrificed. Doing more with less requires leadership and better communication at all levels which results in increased job performance and more accurate information. Analyzing more accurate information gathered with the use of tools such as Key Performance Indicators and Sales & Operations Planning, managers today can examine what has changed and determine how to intelligently ramp up production and inventory, with an eye toward recapturing core Lean principles.

It is important to remember that the adoption of Lean as a manufacturing strategy is the start of a journey, one that can be very profitable. Certain changes will take longer to effect than others. When Lean is implemented and used properly it can become an effective tool to drive continuous improvement. Once integrated into the culture of the business it becomes the standard for daily operations. Decisions revolve around optimizing all activity and keeping waste to a minimum. Companies that do this better than the competition will be the winners regardless of economic conditions.

Question: Could your company gain a competitive advantage by incorporating LEAN initiatives and tools?

March 14, 2012 at 3:41 pm Leave a comment

How Successful Companies Listen to the Voice of the Customer

Listening to the voice of customers is vital for every organization. Every interaction that the business has with a customer enables a way to build loyalty or lose it. Customers’ voices allow organizations to keep track of the large number of interactions that transpire between customers and their company. This will permit them to learn effective ways of making their customers happy and keep them coming back. Customers who see results using their interactions with businesses will become loyal to the company. This will promote positive experiences that they may share with others through conversations. The faster a reply comes from a company, the more likely that the business will maintain a good relationship featuring its customers.

For example, a company was about to lose a $15 million per year major customer who was not happy with the new product line intended to replace a line that sold $3 million per year through the customer. The sales reps met with the buyer and brought the wants and needs information back to the factory to produce new prototypes. After multiple attempts to get acceptable prototypes made and delivered to the customer, only to have them rejected by the buyer, we invited him and his team to our factory where we met as a single product development team. After several days, we developed a unique line of product that we agreed to manufacture as a proprietary product for this customer. We also made a few minor changes to the original product line and the customer agreed to keep it, in addition to the propriety product, on their showroom floor. After selling both product lines for 6 months, our sales to this customer were tracking $22 million for the year, an increase of approximately 46%.

Question: Is your company missing revenue opportunities not listening the Voice of the Customer?

January 31, 2012 at 12:29 pm 9 comments

Management and Leadership in a Newly Created Position

The company was restructuring the management team and reshaping the geographic sales regions of the Corporation. Promoted into the newly created position as Director of Operations – West Region, I was in charge of, with full P&L management responsibilities, the profitability of the company’s largest region comprised of 3 facilities in 3 states having a combined operating budget exceeding $100MM. One of the 3 facilities was underperforming, and needed direction to achieve budgeted EBITDA.

At the end of the fiscal year, all three factories had achieved an EBITDA of 13%, which was higher than planned, setting a new company benchmark and establishing a new trend among all licensee factories.










To achieve this dramatic turn-around, I built and led a cross-functional team that developed, implemented and sustained a successful quality improvement and control program. It should be pointed out that there was no increase in employee headcount; new employees were added through attrition and labor costs remained consistent at 7% of Net Sales. The team’s efforts also resulted in, and laid the groundwork for, unanticipated recognition by Corporate as “The Factory of the Year” for consecutive years 2004 and 2005, from among 7 competing licensee facilities. The program was also recognized as a Best Practice and rolled out to and implemented by all licensee facilities.

January 31, 2012 at 11:51 am Leave a comment

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