Making More with Less is Lean Manufacturing

By John Civerolo and Don Rice

Too much work, not enough people

What is currently happening inside a typical manufacturing company is the amount of daily work or tasks is rising or, in a best case scenario, staying the same. However, at the same time, many companies are not adding people. In fact, the opposite is happening, there are fewer people!

Everyone is overwhelmed with the amount of work and frustrated that, no matter how hard they work, it does not get any better. Many people have set an objective of just getting through and surviving the day with hopes that tomorrow will be better.

If the current manufacturing processes require thousands of tasks each day to survive, and we cannot hire more people even though they are overloaded with work, what can be done?

What is Lean Manufacturing?

"Lean Manufacturing" concepts provide an excellent approach for resolving this dilemma. One of the major focuses and results of Lean Manufacturing is task reduction! Once implemented, Lean Manufacturing takes less work to get the job done daily. You can see this in the results typically seen in manufacturing companies that have successfully implemented Lean Manufacturing techniques. Successful Lean Manufacturing typically means achieving amazing results like:

• Inventory turns doubling and tripling (WIP inventory is spinning rapidly – a minimum of 80 to 100 times per year).
• Velocity, flexibility, and responsiveness of manufacturing increasing – adjusting manufacturing to the customer, not adjusting the customer to manufacturing.
• Massive cost reduction – 30% to 50%.
• Significant process productivity improvements. The ability to produce more with the same or fewer resources.

If the results mentioned above are not being achieved, then Lean Manufacturing has not been implemented effectively, and a process review and root cause analysis is needed to determine the reasons why not.

Process Flow and Tasks

Let’s look at a typical manufacturing process and the steps required to produce a product:

The steps are release, pick, move, queue, setup/changeover, run/process, and move. Plus, the paperwork required to support these steps. These steps, except for release and pick, are repeated many times during the manufacturing process. Look at each step and the activity. Which steps add value? I.e. the customer would be willing to pay for it. Only run/process! The rest are non-value-adding activities. We can debate if they are necessary or unnecessary – but the fact remains that they add no value to the product.

These seven non-value-adding steps are candidates for reduction or elimination. If there is a significant reduction of 20% to 50% in these steps, then the total number of daily tasks required to run the business will be reduced.

As the tasks are reduced, another advantage of Lean Manufacturing takes place – the cycle time to produce products is shorter and the process will become more flexible and responsive to change.

Many manufacturing companies set an objective of eliminating all the non-value-adding activities for all manufacturing processes. While this is a worthwhile and admirable goal, it maybe too idealistic. The problem is the time frame and money required to achieve this goal. Therefore, a more realistic goal is to establish a 20% reduction in these seven steps, which will still provide tremendous results.

When to Start?

Does everything have to be perfect before you start? Absolutely not! Many improvements can be started immediately and results seen quickly. Where should the focus be? What can be done to start getting results?

Simplicity versus Complexity

The reason many manufacturing companies have not had more success with Lean Manufacturing is because of the traditional approach in solving manufacturing problems has resulted in complex problem definition. This results in complex solutions for simple problems. It is not uncommon to see complex solutions being thrust at people daily.

There are new acronyms and new software programs being pushed on people that theoretically will solve virtually every problem in manufacturing today – many automatically and without human involvement!

Using complex solutions to solve simple problems will only add more:

• Confusion
• Cost
• Chaos
• Lack of control

A contrast to this is how simple solutions were commonly used to solve business problems in the pre-computer era. A good example of this is how our grandfathers approached problems on their farm. When the hay baler broke in the middle of the field, they did not get a cross-functional team of local farmers together and brainstorm potential solutions. The farmer just started working on fixing the problem. He could fix most of the problems just using the tools available to him in his toolbox carried on the tractor.

There is an old adage that says it very succinctly, "Complex things are studied, simple things work".

A key objective of Lean Manufacturing is to challenge all processes to:

• Simplify
• Streamline
• Synchronize
• Create cost savings

Prerequisites for Lean Manufacturing

There are two sets of activities required for Lean Manufacturing. What must be done to get started and what is needed for Lean Manufacturing to become ingrained into the business culture to ensure long-term results. The actions that are required to create a Lean Manufacturing environment are:

Getting Started

• All material (raw material, components, packaging, etc.) and capacity (people & equipment) must be "worry free". That is, when production is ready to build a product, they must have all material and capacity available. This means that the up front planning system is scheduling supplier requirements within their quoted lead-time. That the production schedule is "doable" and within demonstrated capacity capabilities.
• Visual controls are in place.

• Manufacturing companies have discovered that, by using visual controls, they have been able to simplify the process and quickly spot problems.
• Visual controls are a communications device that tells people at a glance how work is done and if the process is "out of control".
• Visual signals exist for replenishment and control of point-of-use and work-in-process inventories. Some examples are:

• Kanban squares, baskets, carts, cards, etc.
• Min/max inventory levels.

• Paperwork reduction. Once the visual controls are in place, then a significant amount of paperwork and transactions (paper and electronic) can be eliminated.
• Visual performance measurements exist. Lean Manufacturing performance measurements reward:

• Cost reduction
• Speed
• Flexibility
• Agility
• Process productivity improvements
• Long term results

• Problem solving skills and tools are in place. Production employees have been educated and trained in the use of problem solving tools. The problem solving tools are used to get to the root causes of problems so they can be attacked and eliminated.
• TSP -- When the maximum levels in WIP are achieved, what do people do? They "Temporarily Stop Producing" (TSP) based on a visual signal that shows WIP is at the maximum inventory level. This keeps work-in-process inventories in control and overproduction & waste are minimized. The challenge is to productively use people to solve process problems and eliminate non-value-adding activities. Who knows best how to simplify the process and help eliminate steps? The process owners – production people!
• Non-value-adding activities. Since the objective of Lean Manufacturing is to eliminate all forms of waste and cost, the surest way to achieve this objective is to clearly define all the non-value-adding activities (scrap, rework, equipment down, movement, paperwork/transactions, material shortages, missing tooling, setups/changeovers, absenteeism, etc.) Attacking the non-value-adding activities with a vengeance and eliminating or significantly reducing them will provide process productivity improvements. Why? To get the Lean Manufacturing results. How? By using the problem solving tools to determine the two highest bars of opportunity for improvement. Then, using the talented production resource – people – to solve problems! When do they have time to solve problems? When they are Temporarily Stop Producing based on the visual signals.
• Crosstrained employees. Employees can move to upstream or downstream work-centers without affecting cost, quality, or delivery.
• High quality data and product. Excellent product quality is an expectation. So is data quality (inventory, bills of material and schedules).
• Shallow bills of material – because a flow environment and visual controls exist on the floor for controlling and managing WIP & POU inventories, the levels in the B/M can be reduced and the bills simplified. This leads to paperwork and transaction reduction on the production floor.

Sounds great!

Sounds easy!

What’s the catch?

Overlook Obstacles

Too often, manufacturing companies become mesmerized by the projected results and enchanted with the Lean Manufacturing and the visual control tools and techniques. They starting implementing the latest and greatest idea without the proper preparation.

As a result they often overlook or ignore the following obstacles:

• No foundation in place – people aren’t educated/trained in Lean Manufacturing and/or visual control tools and techniques.
• The focus is on installing complex software systems and processes instead of reducing or eliminating tasks.
• Poor data quality – bills of material, inventories, and routings are inaccurate.
• Bills of material are over-structured causing lots of paperwork and transactions.
• Direct labor reporting is still a manufacturing requirement.
• Floor inventories (POU & WIP) are out of control.
• Schedules are invalid, unrealistic, and/or overloaded.
• Poor or no capacity management on a regular basis.
• Workers are not cross-trained.
• Problem solving skills not used or not available.
• Manufacturing hasn’t accepted ownership of production inventories (WIP & POU).
• Focused on traditional performance measurements – labor efficiency and utilization.
• Executive management monthly review focuses only on manufacturing variances.
• The environment is not conducive to listening to the process owners. We hear all the time "It is easier with a non-union workforce. With an organized & union workforce, it is impossible." Our next newsletter will discuss the successful implementation of Lean Manufacturing in a company that is unionized.
• Mindset – failure to develop and support a culture that promotes:

• Speed
• Flexibility
• Agility
• Productivity
• Waste reduction

Net Result

The key questions to ask yourself about your Lean Manufacturing implementation are:

• Will the process have fewer tasks?
• Will the process be faster?
• Will the process be more flexible?
• Will there be fewer non-value-adding activities and tasks?
• Will production floor inventories be reduced?

If the answers to the above questions are yes, then why aren’t more manufacturing companies "leaning" toward implementing Lean Manufacturing techniques?

Too often it’s because they are not sure:

• What to do?
• Where to start?
• Who should be involved?
• What education and training will be required?
• What are the key prerequisites?

Partners for Excellence has the answers to these and other questions you might have about Lean Manufacturing techniques. We can help your company design an implementation plan and path forward to achieve similar results with Lean Manufacturing.

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If you have specific questions about this article or want to discuss it with the author, call John Civerolo at 1 505-341-0845.

 

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If you have specific questions about this article or want to discuss it with the author, call Don Rice at 1 615-221-2196.

The Partners for Excellence specialize in helping companies set up comprehensive measurement programs and improving overall resource management performance.  Contact us at 1 603 528-0840 or email officess@partnersforexcellence.com.