Archive for category Operations and Manufacturing
Low Cost Lean Continuous Improvement
Posted by Bruce in Lean Principles, Operations and Manufacturing on August 17th, 2009
Many people worry that embarking on a lean improvement program will require major disruptive changes and risk. Certainly this can be a path to breakthrough improvements, but it is possible to achieve significant improvements with smaller, incremental, lower risk actions.
During a preliminary walkthrough of a small machining jobshop I observed two opportunities for improvement which could be made at little or no cost or risk. (Once again, walking around and actually seeing proves enlightening.)
What I saw was a large warehouse style shop with lines of milling machines. There was less than one operator per machine. Some machines could run with partial oversight. In general it appeared that both machine capability and the number of machine operators limited how many jobs could be completed in a day. The office was the typical warren of narrow corridors and small cubicles at the front of the building.
Since the jobs were small, irregular, and often unique the office had a very simple system of issuing work orders. A work order document with any required drawings and material specifications was clipped on a clipboard which was laid on a table at the end of the office. I saw at least 20 clipboards on the table. When an operator finished a job he would walk at least 50 yards across the shop then down a narrow corridor to the office area where the clipboards were stacked. He’d turn in the completed clipboard and find the next job in the pile. There was also a coffee pot, bathroom, and a number of attractive young clerks at desks in this area. This arrangement was very convenient for the clerks who had to place the clipboards in a pile, but what was the impact on the operator’s time?
While I didn’t spend enough time in this area to actually measure lost production time I can imagine 20-30 minutes lost between each job. Walk back to the office, wash hands, get a cup of coffee, use the restroom, chat with the ladies, look through the jobs, pick your next job, walk back to the shop, and then start looking for materials, tools, and setting up the machine. During this time both the operator and the machine are not producing billable work.
A quick improvement here would be to create a visual schedule board on the outside of the back wall of the office. The board could be seen from many of the machines operating stations and could create an awareness of how much work needs to get done this shift. The walk to the board would be shorter, the next job would be obvious from the clipboard position on the board, and there are no significant distractions. It might even be practical for the operator to preview and start setting up the next job while a prior job is still running since he would not be out of sight of his machine.
Some further evolutions of this idea would be to place the work orders near the operators/machines or to place the work orders on carts in the shop area. Operators or lower skill assistants could collect the materials, tools, and fixtures on the carts and roll the carts to the machines. Use of job setup carts would create a type of flow in the shop and could significantly increase the operator and machine effectiveness.
A specific part presented another opportunity. In many cases a lean review does not look for waste within an apparent value adding step. Questioning the assumption of value can reveal new levels of improvement. This particular part was a steel piece with a large area which needed to be faced off (machined flat.) The mill was moving back and forth in a zigzag pattern. The cutter moved off the end of the part, stopped, moved over and reversed direction to pass over the part again. Value in this instance is removing metal chips from the part. When the cutter is off the end of the part it is not adding value.
The solution to this is to create a spiral or circular cutting path so that the tool is constantly cutting metal and adding value. This is sometimes called spiral or Z level machining and can be found in trade articles. The interesting point is that this technique can be ‘discovered’ by applying lean waste elimination principles to what most would consider a value adding process.
While Lean manufacturing principles provide many tools and techniques the simplest and most fundamental principle of going out and looking can yield 10% or better improvement with little investment, effort, or disruption.
Art Communicates on Communication
Posted by Bruce in Business Development, Lean Principles, Operations and Manufacturing on March 14th, 2009
Too many years ago I saw a painting in a friend’s father’s study. This was probably the first piece of art which really communicated a strong message to me. I recall a simple group of stick figures arranged around a boulder. There were two groups each apparently trying to move the boulder in opposing directions. Evident in the forms were thought, planning, and frustration as the two groups worked against each other.
There have been many times I have thought about communication, coordination, and control in business and recalled this painting. I’ve recreated it as best I can. My version doesn’t convey the emotion I recall from the original.
One project provides a couple of specific examples. I was managing engineering of very large machines which applied coatings on glass sheets- up to 3×6 meter sheets. We shipped a multi-million dollar retrofit to an old system that had been operating for at least a decade. It seems the installation team had stalled and the customer wanted their line running. I was invited to an early morning meeting. After an update on the status the GM said, “I think we need to send a team.” About a dozen people became silent, not wanting to draw attention to themselves. As a senior manager and probably the most knowledgeable on all aspects of the system I volunteered; a few hours later I was on a flight to Belgium.
First thing the next morning I gathered our entire team in a conference room and spent the next three hours creating a detailed list of every item preventing the system from operating. The list filled a white board. We then spent the next hour indentifying which items were truly required and which were just “nice to have” or cleanup items. The list was now down to three software items. We estimated one programmer could do two items in an hour each, the other programmer could do the third in about two hours. I could almost end the story here- a multi-million dollar installation was stalled and an emergency team flew to Belgium for four man-hours of work.
About noon I gave our team very specific assignments to complete the three items on the list and do absolutely nothing else. I made a gamble and told the customer we’d have the production line up by 5pm. Then I walked out to the shop floor to see how work was proceeding. The production line was rumbling as pumps and conveyors idled- PLC’s allow code changes while the logic is running- the noise could be felt as well as heard. Looking over the shoulder of one of the programmers I noticed the code he was working on had nothing to do with his assignment. He replied, “I just wanted to clean up a program label. Trust me.” He hit the enter key as he finished speaking. There was a clatter as hundreds of contactors banged open, dozens of pumps shut off, and huge valves clanged shut- then silence and a blinking red fault light in the control cabinet. So many lessons in one little enter key press- engineering is not based on faith or trust, consequences of an apparently minor action can be significant, and four hours of consideration, communication, and apparent consensus can be thrown out when one person goes off task.
We still managed to start the line around 5pm and the first glass ran through the line at 6pm. I remained in Belgium for a few more weeks, until I was confident I could leave without issues erupting.
An intermittent electrical problem encountered during that same trip provides another communication lesson. A gauge was shutting off whenever a valve cycled resulting in shutdown of one end of the production line. The installers were guessing there was a leak or pressure surge tripping the gauge off when the valve moved. I had our install manager bring a digital oscilloscope down to the end of the line and we began watching signals while cycling the valve. We immediately saw a huge electrical spike on a gauge control signal which was shutting down the gauge. I pulled the wires out of the cabinet and discovered that our manufacturing guys had created a 2 foot diameter loop of wire in the electrical cabinet and had used about 6 feet of wire to go from one terminal to another terminal located about 3 inches away. The valve wires made a similar loop creating a single turn transformer which coupled the valve signal into the gauge input. We pulled out the wires and ran the gauge inputs on a direct path a three inches long- problem solved.
Our installers were very uncomfortable with this fix. It seems there was some rule about prettiness of wiring and always going in giant counterclockwise loops instead of taking the direct path. When I got back to my office I explained the problem to the VP of manufacturing. His stunning reply, “We can’t tell the workers how to run the wires in the cabinet.” So, it’s OK to ship systems with mysterious intermittent problems and no hope of reliable operation, but it’s not OK to tell our own employees how to assemble our systems. I ended up taking an executive position at an organic display startup before finding a solution to our internal issues.
Somehow, as an immature, inexperienced teenager I saw all of this in that one painting too many years ago. I’m still working on solving/preventing the same issues and challenges. Closing the loop in communication by monitoring, measuring, and correcting what is actually happening is critical. The military uses (used?) C3 (Command, Control, Communications) to which I would add a few more C’s- collaboration, coordination, cooperation, consensus, concurrence, confirmation, and correcting to create a complete C9 management scheme, and maybe a few more C’s for Documentation, Metrics, Feedback, and Learning if I can find synonyms.
Lean in low volume manufacturing
Posted by Bruce in Lean Principles, Operations and Manufacturing on March 5th, 2009
“Lean is for automakers” is a common misconception. Lean principles can be applied in job shops which engage in one-off unique part manufacturing.
I visited a shop which machined metal parts for customer who typically needed a small number of parts made once, sometimes only one of a particular part. In this environment creating work cells or one piece flow are not the right tools.
Lost time or waste can be identified and reduced in any environment. Value stream mapping or spaghetti diagrams can be used to look at material flow and operator motion. In one job-shop work orders were placed on clipboards on a table near the front office. This was convenient for the office workers who had to set out the work orders, but the machinists producing the parts had to walk across the building and down a long hall. Adding to potential lost time there was a coffee area, bathroom, and some distracting ladies in the office. Moving the work orders to a board on the shop floor eliminates the long walk for the operators. It also creates a visual of the backlog to encourage the operators to manage their time. Assuming that a work order takes 4-8 hours to process and the walk costs about 1/2 hour (with distractions) the potential improvement is 6-12% just from moving work orders to a new location.
Another improvement that works anywhere is a shadow board. As part of 5S a shadow board provides a place to store tools. The shadows highlight missing or borrowed tools insuring that the required tools are always available. The board itself present the tools for quick access, but the biggest improvement comes from not losing tools. Huge amounts of time can be wasted if tools are not returned.
Lean principles are flexible and applicable in any environment. Lean does not need a big investment to generate signifcant results.
Lean is for every business – Hospitals
Posted by Bruce in Lean Principles, Operations and Manufacturing on March 5th, 2009
Lean (Toyota Production/Product Development) can be used in any business. Although developed in a manufacturing environment the principles of elimination of waste translates well to other environments.
Service industries, including hosptials, provide some examples. Chemotherapy is one area in which patient treatment has been improved while reducing costs and increasing the treatment capacity of a given area. Two types of waste are waiting and motion of people or materials. In chemotherapy many patients require a blood test prior to administering the treatment. The time to carry specimens to the lab and then wait for results can be 1/2 to 1 hour. I have seen waits up to 2 hours. Specimens have to be carried which ties up a staff member, often a nurse. The actual treatment times can be 1/2 to 1 hour or more.
In a lean improvement process a Value Stream Map would itemize each step in the process. Waiting is shown as a separate item. The improvemnt team then looks at how to eliminate both the excess motion (nurse going to lab) and the waiting time (transport to lab and time in lab queue.) Different approaches may be considered: the lab could be located adjacent to the chemo area with chemo specimens processed on a priority basis or a dedicated lab instrument could be placed in the chemo area. The improvement team needs to consider costs, skill sets to operate the equipment, conflicting demands on the lab and other factors.
Eliminating the lost time transporting samples and waiting for results allows the treatment to begin a short time after the test. Valuable staff time is freed up for patient care. The treatment time may be cut almost in half, significantly improving the patient experience- chemo is bad enough without sitting for an hour or more with a needle in your arm just waiting to begin. There may also be a small reduction in IV solution by eliminating an hour of unnecessary IV drip. Reducing the time the patients spend in the area also increases the number of patients that can be treated in a given space in a day.
In practice treatment times and patient capacity may be improved 25-30% for a relatively small cost.
I recently witnessed a good example “flow in a manufacturing line” when getting a flu shot. One person was checking patient ID, another was swiping patient health cards, and a group of nurses were giving injections. Patients moved quickly through the line demosntrating good “one piece flow,” all staff members had everything they needed at hand, demonstrating good 5S methodology. I don’t know the numbers, but I am sure the operation was very cost effective and, speaking as a patient, I considered the very fast moving line excellent service.
Lean principles can be applied just about anywhere and typically result in better products or services at improved cost. The focus is on eliminating waste insures that lean improvements do not result in quality versus cost tradeoffs.
Accounting should be a core competence
Posted by Bruce in Finance, Operations and Manufacturing on February 21st, 2009
I continue to encounter accounting which almost insures expensive errors in decision making. I thought ABC and TCM were accepted and that technology- computers, barcodes, and RFID- had made it relatively painless, but I find old-school accounting still driving decisions.
When direct labor was most of the cost of manufacturing (circa 1900) indirect costs were less significant. Accounting was done on paper making calculation and allocation of overhead truly tedious. The use of simplifying assumptions and simple ratios to allocate costs did not result in significant errors and did represent a significant accounting labor savings.
Many businesses still use simple allocation to determine standard costs. An example of this is a large machining operation which allocates costs of cutting tools as overhead. While it is difficult to track exactly on which parts a specific cutter was used the cutter consumaable costs can range from 1% to 50% of the part cost resulting in large potential errors.
For a manufacturer considering outsourcing parts the errors in costing pretty much guarantee unexpected increases in cost as a result of outsourcing. When supplier bids are compared with internal costs those parts that are high consumers of allocated costs will appear cheaper to make in house. Suppliers’ bids will be high because they will have correctly estimated the higher costs. Conversely bids for parts that do not consume indirect costs will appear to be very low. Internal costs will be inflated due to allocation. Even if the supplier bids are high the outsourced parts will still appear to be a much better deal than the overburdened in-house parts.
An outsourcing decision based on poorly allocated costs will always outsource the over burdened ‘easy parts’ and retain the underestimated ‘dificult parts.’ At the end of the year costs will likely increase as a result of an outsourcing exercise to reduce cost. The costs which were truly a result of the retained parts will not go away and the prices negotiated on the outsourced parts, while lower than the internal estimate, are likely to be higher than the actual internal cost.
I’ve seen cases where the teams making decision knew the numbers didn’t make sense, but could not make decisions which contradicted the numbers. The 20-40% potential cost error can easily destroy any hope of profitability in most companies. There are always ways to estimate to reduce the error and minimize risks. Best knowledge and assumptions should be used for decision making and not simply what is easiest to calculate.
Lean is dead?
Posted by Bruce in Lean Principles, Operations and Manufacturing on February 17th, 2009
I’ve heard a couple of odd comments about Lean (Toyota Production System) recently.
- We tried Lean and it didn’t work.
- Ford and GM are lean and look how they’re doing
- Wasn’t Lean a fad in the 90′s?
- Lean is for automakers
The confusion I think comes from looking at specific tools such as 5S, JIT, and Kanban and other specific examples of lean implementation and believing that these define lean. Lean is a way of thinking, a philosophy, and some general principles. While lean projects may lead to implementation of certain techniques or process these are not inherently lean.
Lean is all about perceiving reality directly, looking at problems, eliminating waste, and above all a relentless application of common sense. Saying lean didn’t work for us is like saying common sense doesn’t work.
I don’t consider Ford or GM to be examples of lean business. Clearly they have mimicked use of some lean tools and may even have seen some benefits. In terms of a culture of continuous improvement, elimination of waste, and getting managers out of their offices to see the reality of their factories I don’t believe it happened.
No it’s not a fad. Continuous improvement, eliminating waste in business, and observing and reacting to reality are not concepts that can go out of style.
Lean is not just for automakers. Lean principles have been applied in all types of manufacturing, in product development, and in service businesses. Hospitals have seen significant improvements in patient care while reducing cost through application of lean principles.
