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

Excess processing is doing anything more than the minimum required to transform material into an acceptable product. It is effort that adds no value to the service or product from the customer’s viewpoint. After all, it is the customer, either internal or external, that needs to be satisfied. Clarifying customer requirements and changing the manufacturing or service orders causes different costs. If caught too late, this leads to re-work or even the rejection of shipped goods. This includes processing beyond customer values or taking extra steps that are not required. Whatever the cause, the result is predictable: wasted money, time, effort and resources. The only option is to closely examine the processes and correct them without sacrificing quality.

LOOK FOR poor process control, lack of standards, lack of or poor communication, overdesigned equipment, undefined true requirements, human error, redundant approval or inspection, non-standard business processes, re-entering data, just-in-case logic, “Not Invented Here and / or “Not My Job” syndromes, lack of teamwork or lack of adequate training.

REDUCE BY using Lean tools such as Value Added Flow Charts, Statistical Process Control (SPC), 5-Why Analysis, A3 Reports and Total Productive Maintenance.

The Value-Added Flow Chart is a tool to improve cycle times and productivity by visually separating value-adding from non-value-adding activities. Value Added Flow Charts give teams vision into where processes are creating value and where potential improvement efforts should be targeted. The charts are effective at showing current state and improvements resulting from projects. Teams can understand the value of process steps and identify waste in various forms. This tool is the cornerstone of any process improvement toolbox.

Statistical Process Control (SPC) is based on the analysis of data and requires, like any program, support from the top, and a great deal of coordination. If done successfully SPC can greatly improve a process’s ability to be controlled and analyzed during process improvement projects. The process will be most effective if senior managers make it part of their daily routine to review charts and make comments. Some practitioners share initial charts when they review them to provide visual support. Charts that are posted on the floor make the best working tools-they are visible to operators, and are accessible to problem-solving teams. While the initial resource cost of SPC can be substantial, the ROI gained from the information and knowledge the tool creates proves to be a successful activity time and time again.

The 5-Why Analysis method is used to move past symptoms and understand the true root cause of a problem. It is said that only by asking “Why?” five times successively can you delve into a problem deeply enough to understand the ultimate root cause. By the time you get to the 4^th or 5^th why, you will likely be looking squarely at management practices. This methodology is closely related to the Cause and Effect (Fishbone) diagram and can be used to complement the analysis necessary to complete a Cause and Effect diagram. 5-Why analysis is more than just an iterative process or a simple question asking activity. The purpose behind a 5-why analysis is to get the right people in the room to discuss all of the possible root causes of a given defect in a process. Many times teams will stop once a reason for a defect has been identified. These conclusions often do not get to the root cause. A disciplined 5-why approach will push teams to think outside the box and reach a root cause where the team can actually make a positive difference in the problem instead of merely treating symptoms.

A3 Reports are one page reports used for documenting the necessary information needed for progress reporting and decision making. They simplify project reporting because they pull from otherwise numerous and detailed progress reports and extensive background analysis. A3 reports condense the information to a single page and visually communicate to the reader using graphs, charts and succinct bullet points. Also referred to as “1 pagers”, the A3 report got its name from Toyota Motor Company and refers to the metric paper size that the report is produced on (equivalent to a paper size of 11 inches by 17 inches). This report can be characterized as a Lean tool best suited for solving relatively short duration Kaizen improvement activities. An A3 Report is comparable to today’s computerized “dashboard”.

Total Productive Maintenance (TPM) was developed in the 1970’s as a method of involving machine operators in the preventive maintenance of their machines. This was a reaction to increasing specialization and centralization of the maintenance function that had crated division of labor barriers between operators and the maintenance of their machines and equipment. TPM involves both the operators and maintenance crews working together to improve the overall operation of the equipment. The operators are around the equipment all of the time and should be the first to identify noisy or vibrating motors, squeaky fan belts or chains and oil and air leaks. Operators need to understand the basic standards for their equipment and check it closely and routinely to assure it meets those standards. As soon as a minor defect in operation is identified, maintenance needs to be notified. Catching problems early and fixing them is the key to preventing catastrophic failure or complete shutdown of expensive equipment. Equipment reliability is a cornerstone of a lean manufacturing system. With little or no buffer inventories, equipment failures directly impact production volumes and customer service; therefore, effective preventive maintenance is a critical activity. By bringing together people from all areas concerned with equipment into a comprehensive PM system, overall equipment effectiveness (OEE) is raised to the highest possible level. This requires the support and cooperation of everyone from top management on down.

How much profit is your company losing due to non-value added processing activities?

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

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 7 of 8. The M in DOWNTIME

Motion waste is the unnecessary movement of people, product or equipment that adds no value to a process. Workers walk back and forth from the work area to supply, around unneeded equipment or perform redundant motions that can be eliminated to speed up a process. This can be one of the most frustrating wastes for workers and management. The lost time and production rob most processes of opportunities to function efficiently and make the employees work harder. While most processes are not designed to have motion wastes in them, it is one of the first wastes to creep in and cause disruption.

LOOK FOR excessive walking, moving or handling.

REDUCE BY developing and then examining a spaghetti diagram and Current State and Future State Value Stream Map (VSM) of every process to fully understand operator, equipment or material movement. Implement a Standard Work Practices program and develop an Overall Equipment Effectiveness (OEE) record.

A Spaghetti diagram is a simple visual tool to demonstrate the flow of material, flow of information, and flow of money in a process, and is used to expose waste AND opportunity. The word “spaghetti” is descriptive because it describes flow that is not easily understood, cannot easily be followed, or if the flow is literally all over the place. It represents a point of departure, that is, what does the current state look like and what are the exact improvements needed to be made. Put another way, a spaghetti diagram is a visual representation of how bad things really are. Sometimes, through, poor thinking and poor choices, they are not just representations of how things are, but they can be representations of what we have created; sometimes we turn our processes into spaghetti diagrams. Remember, the spaghetti diagram process is not just completing a diagram but using it to fuel decisions that will improve the workplace. Ensure that operators are involved in the activity. In the results, look for large distances and repetitive movements; consider why they are made and what can be done to improve. Optimizing the workplace can only be carried out when its weak points are known.

Value Stream Mapping (VSM) is documenting an overhead view of a process that looks all the way from the finished product back through a process to the raw materials or request for action (information) which is where most processes start. VSM can help to clearly understand and communicate all of the steps in a process and also allows you to identify those hidden wastes that exist within a process. From the raw materials storage to delivery of a finished product or service, materials flow throughout a process and are handled many people and machines. Information also flows all the way from initial request for a product or service through to the customer reception of the product or service. Historically, most flow charting or mapping processes did not include this crucial element called information flow. VSM not only includes information flow, but also shows how it is intertwined with material flow, machines and manpower.

Standardized Work Practices allow process steps to be decomposed and optimized into simple easy to follow steps that any operator can easily perform. Standardized practices allow operators and workers to perform tasks the same way each time by combining and using all resources effectively such as time, technology, tools on shadow boards and raw materials. By breaking down any process into clearly defined tasks, one can achieve consistency and increase throughput and OEE. These standard tasks or sequence of tasks should be well measured and documented into Standard Operating Procedures (SOP) and simpler tasks or standards developed into one point lessons, which form the basis for training new operators in performing a task and as a performance and quality measurement tool.

Overall Equipment Effectiveness (OEE) is a method of measuring productivity performance. More specifically, it is a statistical metric to determine how efficiently a machine is running. The four bits of information required to calculate OEE are total staff time and the machine’s efficiency, quality and availability. The result is the value that a machine contributes to the production process. OEE is a globally recognized best practice measure to systematically improve processes for higher efficiencies and better productivity, ultimately leading to lower manufacturing costs and higher profitability. It is frequently used as a key metric in a Total Productive Maintenance (TPM) program.

Are Motion Wastes walking away with your customer’s and your company’s profits?

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

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 6 of 8. The I in DOWNTIME

Inventory waste is any material in excess of the one piece required for the next step in the process and can be found in any of three states-raw materials, work-in-progress, and finished goods. Unless the product is being worked on and having value added to it, or it is on its way to the customer, it is inventory. Excess inventories hide many unwanted conditions. Excessive inventory may cover up quality problems like rework and defects, manpower and/or production scheduling problems, excessive lead times and supplier or vendor problems. It is very expensive to carry excessive inventory which requires capital to be tied up in interest payments. Excessive inventory reduces ROI on manpower and raw materials.

LOOK FOR inventory held “just-in-case” problems arise, or unreliable shipments from suppliers or for excessive service capability or excessive inventories with less than 12 turns per year. Also look for large lot production, unreliable forecasts, poor scheduling, poor market forecasts, unbalanced workloads, poor communications and management decision issues any of which result in increased labor, fuel, space and/or maintenance costs and material aging and risk of obsolescence.

REDUCE BY implementing Just-In-Time (JIT) movement of materials, Single Piece Flow, kanbans, 5S, and cellular layouts.

Just-in-time manufacturing is a strategy used to reduce costs by reducing the in-process inventory level. It is driven by a series of signals that tell the production line to make the next piece for the product and when it is needed. The signals used are usually simple visual signals, such as the absence or presence of a piece that is needed in the manufacturing process. In just-in-time manufacturing, reorder levels for certain inventory items are set and new stock is ordered only when those levels are reached. There is no overstocking of parts or items, which saves on space in the warehouse. This manufacturing strategy can lead to improvements in quality and efficiency. It also can lead to higher profits and a larger return on the company’s investment. Although this specific manufacturing strategy was created by the Toyota company in Japan during the 1970s, previous businesses used manufacturing processes that were based on similar concepts. One of the first was created by Henry Ford, whose automobile company bought materials only for its immediate needs in the manufacturing process. Ford bought only the amount of material that was needed in the production plan and planned the transportations of materials so that the flow of the product would be smooth. This created a rapid turnover and decreased the amount of money that was tied up in raw materials.

The Single Piece Flow technique allows us to make only the quantity needed to fill the hole to be “pulled” by the next operation downstream from their operation. This keeps the work-in-progress to a minimum and is usually managed with a good kanban system. Often movement of batches are minimized to the smallest number efficiently handled and eventually further reduced to Single Piece Flow.

Kanban is a scheduling system that uses signals to help determine what to produce, when to produce it, and how much to produce. It is not an inventory control system. It works from upstream to downstream in the production process (i.e., starting with the customer order). At each step, only as many parts are withdrawn as necessary, ensuring that only what is ordered is made. The necessary part in a given process step always accompanies the signal to ensure visual control. The upstream processes only produce what has been withdrawn. This includes only producing items in the sequence in which the signals are received, and only producing the number indicated. Only the products that are 100% defect free continue on through the production line. In this way, each step uncovers and then corrects the defects that are found, before any more can be produced. The number of signals should be decreased over time. Minimizing the total number of signals is the best way to uncover areas of needed improvement. By constantly reducing the total number of signals, continuous improvement is facilitated by concurrently reducing the overall level of stock in production.

The 5S system is a workplace organization method that greatly improves the efficiency and management of an operational area while improving morale and saving time. The five S’s stand for Sort, Set-in-order, Shine, Standardize and Sustain. 5S is often the first step in applying Lean techniques. It helps to get all of the “junk”, including materials, out of the work area and then set procedures to keep it that way.

In Cellular Layouts, production work stations and equipment are arranged in a sequence that supports a smooth flow of materials and components through the production process with minimal transport or delay. Implementation of this lean method often represents the first major shift in production activity, and it is the key enabler of increased production velocity and flexibility, as well as the reduction of capital requirements.

Are excess inventories tying up your cash, creating financial inflexibility and costing your company money?

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

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 5 of 8. The T in DOWNTIME

Transportation waste occurs when people, product, equipment or information are moved more often or further than needed. During multi-step processes, materials and people are moved from process to process that are separated by distance and/or time. Instead of processes being sequential or positioned next to each other, they are far apart and require forklifts, conveyors or other moving devices to be re-positioned for the next step in a process. All of these movements add no value to the process or product.

LOOK FOR the movement of people, materials or information that does not add value to a process.

REDUCE BY minimizing the physical distances the materials, equipment and/or manpower travel with zoning, cellular layouts, value stream mapping, and sequencing.

Zoning is a technique of identifying the boundaries of a particular work center. Everything has a marked home and there is no excess work-in-process storage. When Just-in-Time (JIT) is fully implemented, equipment and personnel are optimized in new layouts. Techniques like frontal loading, retrieval and ergonomically correct work centers are implemented. Place supply and removal paths at least 1 meter away from the back of workers and make the paths at least 2 meters wide to reduce potential accidents. Some organizations establish parts “super markets” to locate materials near to where they will be needed and operators will “pull” materials into their work center, versus having work “pushed” to them.

A Cellular Layout should provide all of the equipment, tools, work instructions and materials to accomplish a single task or group of related tasks. It does not matter if the cell shape is a T, I, L, U or V, although the U is the most common. The best shape is the one that produces the most efficient productivity in a safe manner. Most people are right handed, so the most ergonomically correct flow of parts or objects in a cellular layout is counter-clock wise. Arrange production cells to minimize the stretching and reaching for parts, supplies or tools and to accomplish tasks. Place the height of the work surface based on the type of work to be done and the weight of the materials to be moved. Observe and talk to workers doing the task before determining the final layout.

Value Stream Mapping (VSM) is documenting an overhead view of a process that looks all the way from the finished product back through a process to the raw materials or request for action (information) which is where most processes start. VSM can help to clearly understand and communicate all of the steps in a process and also allows you to identify those hidden wastes that exist within a process. From the raw materials storage to delivery of a finished product or service, materials flow throughout a process and are handled many people and machines. Information also flows all the way from initial request for a product or service through to the customer reception of the product or service. Historically, most flow charting or mapping processes did not include this crucial element called information flow. VSM not only includes information flow, but also shows how it is intertwined with the flow of materials, machines and manpower.

Sequencing is a JIT technique which was revolutionized the Toyota Production System in which they scheduled their automobile manufacturing for mixed model production. Their implementation of Lean techniques allows them to effectively produce the correct model of automobile with variations needed to meet the changing customer demands. Similar models that require different parts are scheduled for production with the right parts delivered to the production line just-in-time. These techniques can be applied to any production line that produces similar items and knows the frequency of their customer demands. There is no need to tell customers that they have to wait until you complete a long production run of one type of product before you can produce a similar one. Operations that are process-focused versus function-focused, with smaller machines and well trained operators are usually flexible enough to use sequencing. In today’s market, customers do not want to wait for their product while your competition is producing goods when the customer wants it.

Is transportation waste creating bottlenecks and roadblocks that are hindering the financial success of your customers and your company?

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

How to Increase Profits Through Teambuilding – A Case Study

Team  Building by encouraging employee participation and recognition improves employee satisfaction, reduces labor costs and employee turnover.

While looking through   business related publications this week  I was pleasantly surprised when I came upon some quotes by  Sir Richard Branson which  mirrored my own business philosophy. He was asked  how he has managed to step back from day to day management of his many companies. His answer was simple. By listening to his people, soliciting their input, then giving permission for his people to contribute and implement their own ideas.  Not only did this work for streamlining coporate operations, Sir Branson stated he often found new leaders for his companies.

In any manufacturing, or even corporate environment, human capital in particular, is a critical part of a company’s success, and needs to be nurtured through leadership training and other education programs. When   management pays attention, through monitoring, and employees are also given the freedom to initiate ideas and cost saving measures they are more apt to be  effective team members.  Ineffective monitoring and mentoring of employees through the lean process is bound to  negatively impact the entire process and product quality in particular. The  employer has to constantly create enthusiasm with all employees and acknowledge them 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.

I once worked for a company which had  begun to struggle. They called me in to help determine how to  turn this  trend around. 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 had made the decision to  offset the decreasing sales by reducing the labor force. Unfortunately, the first reductions in force  included most of the QA/QC personnel because they were 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 California 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.

The lesson here is this, when forced with bottom line decision making, it is important to consider all  aspects of the cuts that need to be made. It is vital to keep some portion of services that may not be seen as income producing from a numerical standpoint, but whose  intrinsic value could be far greater than numbers will show.

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