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In the brave new lean world, sometimes life gets confusing.
What do you do when your lean adviser delivers the report that says your $20 million conveyor system just isn't efficient anymore?
"There's a lot of soul searching," says Michael Boucher, senior adviser to LEAD (www.leanadvisors.com) of Ottawa, Canada. "Like three months worth of it."
In the end, Boucher's client decided that it could make more money and become more efficient if it just accepted the idea of scrapping the old system. Scrapping it also made it harder for the company to go back to the old ways of doing things.
The changes that lean manufacturing can bring about on the shop floor can be pervasive, jarring, even world-changing. But since lean-manufacturing principles are all about the flow, perhaps the best advice is to go with that flow. And given that the world is changing so rapidly, perhaps your shop floor is ready to accept the changes of a brave new world.
Rick Harris thinks so. He's the president of Harris Lean Systems (www.harrisleansystems.com) and the author of a book detailing the art of continuous flow. "The biggest obstacles involve the old MRP [material resource planning] system of forecasting production needs," he says. "What you are sure of is always wrong, and forecasts always change, so there is no perfect forecast."
If the forecast is always inaccurate, why not abandon the old system and adopt a pull system designed to quickly meet market demands, he asks. "The only way is to draw from a pull system and replenish what has been consumed from the [shop] supermarket."
Harris says he recently worked with a metal-stamping company that made boxes and concluded that their entire production scheduling system need to be changed. The 230,000 square-foot warehouse was converted from running two months of product at a time to only a day's worth at a time, the kind of system that can change rapidly to meeting changing market conditions.
The result, says Harris: "the stock price is four times what it was three years ago."
As metalworking and fabricating companies switch to a lean manufacturing philosophy, storage and retrieval of parts and components become an increasingly important piece of the production puzzle. In simple terms, the question is how can implementing a lean concept of material handling enhance a company's ability to increase productivity and create a benefit to the bottom line?
For example, in terms of die handling, most stampers aren't applying lean principles, an important piece of the lean puzzle, says Ron Demonet, vice president, systems sales, for Atlas Technologies Inc. (www.atlastechnologies.com) of Fenton Mich. Much of the die-handling time takes place in storage and retrieval functions, and that is a major waste of time and resources, he says, adding the costs can be significant in terms of manpower, floor space and damage to dies.
In the typical stamping operation, dies are moved between the press and storage area via cranes or fork trucks (equipment not specifically designed to handle dies in a controlled manner). In the storage area, most stampers tend to stack dies on top of each other on the floor or use a fork truck to place them in racks. Both are rough on the dies and can cause major damage.
The solution can be integrating quick die-changing methods and die storage and retrieval to minimize waste throughout the process, Demonet says.
When a company begins to search for a lean solution for a problem, it has to start somewhere.
"My approach is to address the question of what is the best flow of work between processes," says Boucher of LEAD, a think tank that advises clients on lean-manufacturing techniques and concepts. "When I work with a company I try to identify impediments to the production process. [On the shop floor] we are dealing with the issue of right-sizing in order that we meet flow or pull processes."
Simplified, Boucher says that often is a matter of moving something, like a long-standing conveyance system. "In a lot of cases it's removing a piece of equipment that may have a capital cost associated with it. There may be cost issues. There may be times when something has to be replaced as a result."
In one case, a conveyor system that was valued at $20 million became the object of a lean discussion, says Boucher. The sole purpose of the conveyor was to move product from Point A to Point B to Point C. "After our assessment, we determined that the conveyor only allowed the plant to assemble items far apart," he says. "Why not do them close together?"
What followed was one of the moments that can define a company, an exam question that just didn't come up in business school.
"Trust me," says Boucher. "There was a lot of soul searching to replace a $20 million conveyor system. But after three months of hedging, the company realized it had to happen to make them more efficient."
The company, over time, made the decision to write off the equipment and dispose of the conveyor system, instead opting for a new system that lowered inventories and embraced lean concepts. "At the end of the day, when you realize you're moving unnecessary parts, they realized it was time to support their lean journey. It also kept them from looking back on their old journey," he says.
According to Boucher, the company had, for years, produced their product in a line that began at one end of a conveyor belt and flowed to another, from raw materials to finished products out the door, a classic "push" production system. There were a number of entry ways along the conveyor route, with lots of people putting things on the belt and taking them off. There were process "villages" along the line, where like machines were grouped together, and parts and unfinished products moved from village to village.
The system may have worked for years in this way, but the world is changing. The company recognized that to improve both quality and productivity, something had to give.
The solution was to create individual work cells with operated independently of each other—the classic cellular concept. Work cells in the plant produced their products from beginning to end and were only forced to rely on itself to get the job done on time, Boucher says.
The new system resulted in fewer man-hours handling raw materials and components. It created a more efficient use of the available labor force in the plant, while freeing up a significant amount—about 25 percent—of valuable floor space. From this there was an immediate reduction of material handling, the "touches of the product," says Boucher. "In this instance, the conveyance system was adding no value to the company for the product they were producing.
"Rather than looking for the high-tech solution, in lots of cases we looked for simple, low-tech solutions," he says. "The goal is to provide flexibility and to always be re-inventing your self. Companies need to be flexible for the future."
In metalworking, size and weight of materials are clearly a constant issue, he says. "There is still a large-batch mentality because in their world it's not one-piece flow. The question is how can we get the smaller batch sizes to work for them … If we don't right-size the tendency will be to go back to larger batches."
The benefits of "right sizing" are clear. With smaller batches, companies have great flexibility and the ability to change production to meet changing needs, Boucher says.
Right-sizing reduces space requirements, racking requirements and the time spent by workers sorting, locating and finding materials during the production cycle, Boucher says. "The smaller the pile the less I have to look for when I have to prepare that piece for production," he says. "It frees up a tremendous amount of work space, and that means lots of organizations are devoted to storing material as opposed to actually producing materials.
"In metalworking it's a huge cost," he says. "Every time someone handles the item it takes time, and typically it's the wrong work at the wrong time."
Still, there is much resistance to change both on the shop floor as well as in management circles. "The typical resistance comes by focusing on individual processes and not the overall efficiency from a system-wide point of view," says Boucher. "In a lean world it's vital to focus on how well are you meeting customers' needs and supporting the process of the next step in the production cycle.
Managing the shop floor means scrutinizing the systems you have in place, and regularly checking to see if they're still doing what they're designed to do. "If I have bins and carts, I'm asking how many should I have," Boucher says. "When it's empty, is the kanban system sending the right signaling system on the floor?
"Like with every tool, it has to be used correctly," he adds.
In general terms of material handling, "although we've really had a good start from the 'just in time' concepts of the 1980s, we've lost a good bit of momentum along the way," says Jamie Flinchbaugh, co-founder of Lean Learning Center, of Novi, Mich. "People still talk about kanbans and pull systems, but there's been an explosion of software equipment and other packaged solutions to material products handling."
Flinchbaugh says companies have begun to realize how important material handling, on the shop floor and elsewhere, has become. "It's more important than simply making stuff," he says. "We had to manage our inventory in a better way, and not just in the factory, but we had to do it end to end."
Experts have been working on the issues for years.
"The overall state of managing inventory is much better than it was, say 20 years ago," says Flinchbaugh, whose Lean Learning Center offers assessments, education and solutions for a wide range of businesses.
He adds this note of caution, however: "Pre-packaged solutions lead [companies] away from the underlying issues they are trying to manage," he says.
Flinchbaugh says one of his manufacturing clients was confronted with a problem that is typical for companies grasping for lean production solutions: "One company tended to look at their work in two chunks: order fulfillment and manufacturing," he says. "But the more you have the less you tend to have of the right stuff. They seemed to have six months of inventory, but still had shortages."
Flinchbaugh says the company was spending a lot of time trying to manage the system rather than fixing it. In the end, the firm came to realize their operation was more than a series of departments. "They started to look at it as a value steam, not managing each piece, but the process as a whole. Getting the thinking right is a big part of the solution."
Harris says he's noticed that companies are working at improving their work flow systems, but that a lack of a lean material-handling system isn't in place to support continuous flow cells, small-batch processing and traditional assembly lines.
Boucher says it's still an uphill battle for many. "A large majority of companies have looked at lean, a good portion has dabbled but, unfortunately, only about 10 percent are committed to the long term and have found success," Boucher says. "We're not going to get there overnight. Our world is too focused on instant gratification and the now."
Editor's Note: Joe Dowd is a freelance writer based in Kingston, N.Y.
author: By Joe Dowd