Iw lean handbook


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Iw lean handbook

  1. 1. Table of Contents Table of Contents.....................................................................................................................1 Rockwell Collins Accelerates With Lean Engineering...........................................................2 Streamlined product development processes cut cycle times, reduce time-to-market. Average Isn’t Good Enough................................................................................................3-4 Simply stated, manufacturers that aren’t continually improving are losing ground. VIBCO Vibrators has embraced the principles of lean to assure it remains in the game, not behind the pack. How to Make it in America -- the Lean Way.......................................................................5-6 Five questions with American Leather co-founder Bob Duncan. Lessons From the Road: Sustaining Your 5S Efforts..............................................................6 5S too often is short lived, but these six steps can help keep it running smoothly. How to Design a Lean Implementation So Failure is Guaranteed...................................7-8 Three critical characteristics will help gauge your chances for success. Safety Beyond Compliance.....................................................................................................9 A ‘lean’ approach to safety builds a culture that engages the entire workforce in proactively seeking out and removing injury risks. Lean Confusion................................................................................................................10-11 It has been embraced, ignored, misunderstood and even derided, but lean’s proponents continue to exhort its value as a driver of operational excellence. Lean for Machines............................................................................................................12-13 Applying continuous-improvement strategies to maintenance can help your plant run like a well-oiled machine. Don’t Let Size be a Lean Barrier............................................................................................14 Small manufacturers have advantages when it comes to implementing lean. IW | The Manufacturer’s Guide to Lean | 1
  2. 2. Rockwell Collins Accelerates With Lean Engineering Streamlined product development processes cut cycle times, reduce time-to-market. By Jonathan Katz Rockwell Collins Inc. is in a race with global suppliers to expand into emerging markets, such as Russia, China, India and Brazil. Diversifying into new markets has never been more important for the aviation electronics and communication equipment manufacturer, with the United States and Europe clampRockwell Collins systems engineers perform tests in a Blagnac, France, lab on ing down on defense budgets. the crew alert system for the AgustaWest-land AW149 and AW101 helicopter In late 2010 Rockwell made several announcements regard- programs. ing agreements the company signed with China’s state-owned Photo: Rockwell Collins Commercial Aircraft Corp. of China to provide systems cess. So Level 1 may be simply a design idea, whereas for Comac’s C919 aircraft. The company also is working Level 9 is a product realization. with Russia’s Irkut Corp. to build the MS-21 commercial “The manufacturing readiness level assesses how aircraft and is competing to provide technology for robust a design is for transition into the factory,” MatBrazil’s next-generation tanker platform, says Nan Mattai says. “So it looks at whether you’ve completed your tai, Rockwell’s senior vice president of engineering and qualification test, have you put the right infrastructure technology. from a test-equipment standpoint in the factory, have The global expansion means aerospace manufacthe build operators been trained, have the technicians turers must make improving time-to-market a priority. Nan Mattai: been trained, have you run a pilot line. It’s assessing One of the ways Cedar Rapids, Iowa-based Rockwell Col- “We standardize our processes those areas to evaluate your readiness for factory tranlins has hastened the product-development process is into what I call a sition.” through lean engineering. The company began its lean technical-consisThe lean engineering processes help Rockwell move engineering initiative in the 2001-2002 timeframe. Rock- tent process. We engineers where they’re most needed, optimize rewell adopted lean techniques being applied to its plant standardize the major tools we search and development dollars and accelerate the floors to standardize the engineering process. utilize.” engineers’ learning curve as they move from the gov“We standardize our processes into what I call a ernment side of the business to the commercial side, technical-consistent process,” Mattai says. “We standardize the major tools we utilize.” The company’s lean engineering Mattai says. The result has been an average cycle-time reduction system is called Core Process Optimization and includes an up- of 20% to 30% across various projects over a three-year period, stream and downstream approach. That means the company fo- according to Mattai. As part of the engineering team’s lean adoption, the comcuses on its pursuit and order-capture processes as well as how the design and development processes transition to manufac- pany also has implemented a variation of a “pull system.” That is, the engineers are closely aligned with internal and external custuring, Mattai says. Rockwell implemented common engineering tools that allow tomers to ensure they’re adhering to customer requirements. engineers to move across different business segments in a more Some of this engagement occurs in customer labs, such as the streamlined fashion, Mattai says. Downstream the company in- Air Force Research Lab, or working with internal business units troduced a “manufacturing introductory index” that helps tran- during their strategic-planning sessions to understand their sition designs to the plant floor and a manufacturing readiness needs, technology gaps and to infuse innovative thinking into level that assesses where a product is in the development pro- their processes, Mattai says. IW | The Manufacturer’s Guide to Lean | 2
  3. 3. Average Isn’t Good Enough Simply stated, manufacturers that aren’t continually improving are losing ground. VIBCO Vibrators has embraced the principles of lean to assure it remains in the game, not behind the pack. By Jill Jusko When your actions -- or more precisely lack of action -- make a grown man cry, it’s not a moment you are likely to forget. Karl Wadensten hasn’t forgotten. The president of privately held VIBCO Vibrators cites the incident as the catapult that launched his Wyoming, R.I.-based manufacturing company on its lean journey more than eight years ago. The story goes like this: A salesman for a distributorship sells a large construction project on the benefits of purchasing products made by VIBCO, which manufactures electric, pneumatic and hydraulic vibrators for construction and industrial use. The salesman places the order with VIBCO, which provides him with a delivery date. VIBCO misses the delivery date. The manufacturer then misses a second delivery date, which prompts the salesman to call VIBCO on a Friday afternoon, in tears. His reputation and likely his job are on the line, “and here we are not holding up our end,” says Wadensten. The construction firm is set to begin pouring concrete the following Monday. Add to the story VIBCO’s typical manufacturing operations work week, which is 40 hours in four-and-a-half days. Thus the plant floor is largely cleared out by the time VIBCO’s customer service representative escalates the issue to Wadensten, who has been home sick. The feel-good ending is that VIBCO shipped out the order on that Friday, after rallying employees to return to the manufacturing facility and push through the order. Except, of course, it wasn’t a feel-good ending. “It’s not one of those orders you can celebrate. VIBCO President Karl Wadensten (in orange) says the entire workforce embraces lean with the same ferocity he exhibits. Pursuit of those lean principles helped the company gain market share during the economic downturn. Photo: VIBCO Vibrators IW | The Manufacturer’s Guide to Lean | 3
  4. 4. Yes, we did it,” Wadensten says. “[But] we built no bridges with the relationship at this point. We did nothing for the brand of our company. It’s sad that we had to get to that point to get something out for somebody.” Time for Self-Reflection The high-profile incident drove Wadensten to take a good, hard look at his company, and what he saw frustrated him. The VIBCO president describes the mindset of his company back then as typical of U.S. manufacturers. “We were like an average manufacturer. We’d miss some [dates]; we’d make some,” he says. While the incident with the crying customer wasn’t the norm at his firm, he said it brought home some ugly truths about how good the company really was. And he recognized the need to improve. Wadensten points out the competitive advantages U.S. manufacturers should bring to U.S. customers -- speed, agility, trust and relationships. Yet what he saw in his firm were unpredictable delivery at times and a lack of stable processes. On the plus side, he says VIBCO made a good product and boasted a dedicated staff, “but we weren’t communicating.” That mindset no longer prevails at VIBCO. Indeed, exactly the opposite is true, and Wadensten credits the company’s embrace of lean for the change. He describes the lean transformation as more than waste elimination or process improvement (although both are important), but a cultural change as well that has turned the employees into a workforce of problem-solvers. “I have 85 problem-solvers,” he says. “They are intuitively fixing things all day long.” It’s to the benefit of customers. VIBCO produces 1,300 different products and 6,800 component pieces and can deliver within 48 hours “from scratch,” with same-day or next-day delivery on standard products. Helping boost that velocity are lean practices such as quick changeovers. For example, changeovers on lathes that once took 75 to 90 minutes have been reduced to less than 10. Assembly times that took hours have been driven down to four minutes. “We’re doing everything for the customer because at the end of the day, that’s what we’re in business for, that’s what pays our bills,” Wadensten says. VIBCO’s embrace of lean benefits the company as well. Its benefits became especially obvious during the recent recession. Wadensten points out that VIBCO didn’t lay off people during the downturn and worked 40-hour weeks. It spent money on marketing and equipment, and grew market share by 16%. Plus, Wadensten says the time saved by eliminating non-valueadded tasks freed time to develop new products, pointing out that VIBCO added 13 products and two new patents to its stable in recent years. “Lean allows you more time to do things that are important to the customer and that they are willing to pay for. Then your company can grow and spend more time on R&D, spend more time on innovating, spend more time on process control, spend more time on material and information flow,” he says. Lean Activist Wadensten has become an ardent advocate for lean manufacturing. (The manufacturer even hosts a radio show called “The Lean Nation.”) He has advice for manufacturers who suggest they don’t have time for lean. Make time, he says, “because the rest of the globe is making time for this, and you are going to get your clock cleaned.” Also, he says, don’t think you can “dip your toes” into lean, choosing small pieces to incorporate and think you’re done. That’s flavor-of-the-day thinking, Wadensten observes. That’s not to suggest lean is easy. Some lean tools, such as single-piece flow, are counterintuitive to the batch production taught in engineering or business schools, Wadensten notes. Standard work may be another challenge. For VIBCO, however, the biggest early challenge was the “people” side of lean. Some employees were skeptical and didn’t believe their ideas would be heard. And while VIBCO strove to encourage what Wadensten describes as peoples’ intuitive desire to share in the improvement process, such collaboration requires that companies gain the trust of their employees -- trust that driving business improvements does not equate to driving away jobs. “Lean is a growth strategy, not a strategy to eliminate people,” he says. More recently, VIBCO has encountered the challenge of sustaining its lean efforts. In June 2010 lead times started stretching out, and a backlog began to develop. The company consulted with other manufacturers that had been pursuing lean journeys over longer periods and gained valuable perspective. Among the learnings: VIBCO’s lean journey had driven many point solutions, but an overall corporate strategy was lacking. The infrastructure needed to sustain the gains was missing, in other words. That’s where VIBCO is concentrating much of its efforts today. Its backlog has largely disappeared and the company may soon improve on its same-day, next-day mantra. IW | The Manufacturer’s Guide to Lean | 4
  5. 5. How to Make it in America -- the Lean Way Five questions with American Leather co-founder Bob Duncan. By Josh Cable The story of Bob Duncan isn’t your typical success story in manufacturing. Duncan didn’t rise through the manufacturing ranks as a salesman or a plant manager, nor did he invent anything. In fact, before Duncan and Sanjay Chandra co-founded luxury furniture maker American Leather in 1990, Duncan had no manufacturing experience whatsoever (except for the time he spent in his father’s cotton gin as a kid). After earning his master’s degree in manufacturing engineering, Duncan got a job as a consultant. In his two-year stint in the consulting world, Duncan learned about a business concept that changed his life: lean manufacturing. For American Leather CEO and cofounder Bob Duncan, lean is the business model. Today, Dallas-based American Leather is a $70 million business, and it has carved a niche by manufacturing and delivering customized high-end upholstered furniture in three weeks or less. Duncan built the company on lean principles, so much so that he insists lean is his business model. IndustryWeek recently asked Duncan about his company, the importance of lean principles and his commitment to manufacturing in America. IW: Of all the possible business ideas you could pursue, why did you choose high-end furniture? BD: One of the clients that I had consulted with was involved in the furniture industry. They own their own stores, and they had a factory, and in the course of doing some work for them as a consultant, I learned about the industry. I learned that for the most part, the furniture industry from a manufacturing standpoint was still a very old approach to manufacturing -- it was more of a batchbased manufacturing mentality, and lead times were very long, even for domestic producers. ... So if you wanted to special-order a leather sofa, or for that matter a fabric sofa, probably the standard lead time for a domestic producer was 10 to 12 weeks. Eight weeks was really fast. At the time, Italy was the dominant offshore producer, subsidized by its government, and it was very price-competitive. Italian goods had an even longer lead time -- I’d say probably 16 weeks. And so our whole idea was that we would apply Japanese manufacturing methods to an old-line industry, and allow consumers to have a lot of choice -- everything made to order. So allow a consumer to come in and really customize exactly what they’d like, and then ship dramatically faster than was the norm in the industry. IW: So lean was the foundation of your business model? BD: When we started our business, our mentality was, ‘If Toyota was going to build furniture, how would they do it?’ Lean was our business model and our business advantage from Day 1. For American Leather CEO and co-founder Bob Duncan, lean is the business model. So in some respects, we have less competition in our niche than we did say five to seven years ago. IW: How has the industry changed since you started American Leather? IW: What is the biggest operational challenge that you face? BD: A lot of our domestic competitors now do a substantial amount -- if not all -- of their production offshore, mainly in China. And when you do that, obviously it affects the lead time. And typically that model isn’t really set up for custom or made-to-order business. So they’re able to produce and sell a brown sofa at a much lower cost than they were four, five years ago in their domestic factories. But if you want a different color, if you want other options -- we have hundreds of options, and ultimately we have tens of millions of configurations that could be ordered from our factory at any given point in time -- that’s just not typically what a Chinese manufacturing model is going to be set up to do. They’re normally large, very efficient batches, but it’s going to be less custom-ordered. BD: We’re two or three times more expensive than a mass-market price point because [the overall price of furniture] has gone down. And so we have to explain to a consumer why are we worth it. To do that, the pressure on us hasn’t been so much to make things less expensively, but it’s been to offer more choice, more features, more options, more innovation. (Duncan notes that the company now offers 87 different leather colors and approximately 400 fabrics.) So the complexity of our process today is easily two to three times higher than what we would’ve had say just five or six years ago. ... The manufacturing model certainly, but even just keeping track of all the data and getting everything right, is a huge challenge. The only way I think you can IW | The Manufacturer’s Guide to Lean | 5
  6. 6. pull that off is through lean principles. IW: Why is it so important for you to keep your manufacturing operations in the United States? BD: There are two reasons. The first is for our business model, I think it would be very challenging to do it offshore. Certainly to do it in China with the [shipping] times and the distance over water would be very challenging. Maybe you go to Mexico -- we’re not that far, we’re only 300 miles from the Mexican border -- so maybe you could replicate that in Mexico. I grew up right on the border with Mexico, and it’s a different country. There are just challenges to doing business in a different country, and our model is extremely demanding. Plus I just think from a communication standpoint, from a supply chain standpoint, I think that there’s a good chance that it would kind of fall apart if you tried to replicate the model outside of our market, outside of the U.S. So from a business standpoint, I just think that there’s a very high likelihood that it would fall apart, that it wouldn’t be sustainable. And the second reason is that I love manufacturing, and I like to build things. I suppose some people would say you could buy your own factory somewhere, or have a strategic partner, but what’s been more typical in our industry is that they simply outsource and just contract with somebody else to build their product. For me personally, the passion and the enjoyment is making things. And so if I wasn’t making it, then why do it? ... Personally, this is only fun for me if I’m building my own products and building them in the U.S. If I had to go offshore to do that, then I think I’d just like to do something different. Lessons From the Road: Sustaining Your 5S Efforts 5S too often is short-lived, but these six steps can help keep it running smoothly. By Jamie Flinchbaugh 5S is probably the most common lean method applied. It is seemingly simple, progress is visual, and it involves everyone. However, the average lifespan of a 5S effort is a paltry one year. This is worse than doing nothing at all. Getting the organization to put this much effort into something and then not sustain it sends the unintended message that their efforts were not valuable. It is disrespectful. So how do you sustain the 5S efforts? The following steps include actions to take during its installation, and afterward. 1. Communicate the purpose. The purpose of 5S is not safety, discipline, engagement, tidiness, being “tour-ready” or improving efficiency. Those are benefits, but the primary purpose is to be able to spot problems quickly. Look inside a NASCAR garage, and you are likely to see the cleanest garage you’ve ever seen. Why? Because if there is one drop of oil on the ground, I want to know about that problem right away. I don’t want to find the problem 10 laps from the finish line. I want to find that problem immediately. 5S, when done right, allows you to walk into any area and spot abnormalities easily. People need to have a clear understanding of the purpose to be able to make good decisions about its use. 2. Audit at the leadership level. Most organizations get some kind of audit and check into place. Some do it from inside the team, some from peers from other groups, and sometimes from a central team. Audits are inherently wasteful but necessary. The leadership of the organization also needs to do a form of audit. What’s the purpose of their audit? It’s less about accountability and more about finding systemic barriers to 5S success through direct observation and engagement. These are the problems that leaders must solve to help enable sustainable 5S. 3. Periodically change your audits. Audits can become stale and routine. When they do, they stop becoming effective. Change the audit methods periodically. You might change the scoring, change the roles, change the frequency or change the evaluation method. Audits are about seeing what’s working and what’s not. Sometimes you need to look from a different angle. Changing how people view the process can help them see something they missed before, as well as prevent them from taking the audits for granted. 4. During a crisis, double your audits. If an area is in the midst of a crisis, be it production or quality or anything, what is the natural reaction? Do you drop the nice-to-have audits, or do you double them? Dropping is the common reaction but the wrong one. During a crisis, you want your process as stable as possible so you can focus in on the challenge or abnormal condition causing the crisis. If 5S is truly connected to helping you maintain a stable process, then it is more important than ever to sustain it. Not only does dropping the audit during a crisis send the wrong message, it can make recovery even harder. 5. Escalate problems. If audits find breakdowns in the process but there are no consequences, then what’s the point? There must be an escalation process with consequences for failures. For example, one organization knows that if an area is out of control, they run the risk of serious problems. Therefore, if you fail one audit, you have a chance to correct things. But if you fail two, your area is shut down. And management must come to the area to figure out what is going so wrong and what to do about it. There must be an escalation of breakdowns in 5S for corrective action to be taken seriously. 6. Eliminate doors and drawers. You can only solve problems of an organization when you can find them. What’s the purpose of doors on cabinets and drawers? Primarily, to hide the clutter. We don’t want to hide the clutter —we want to eliminate it. Eliminating doors and drawers help make observations and finding abnormalities easier. 5S is relatively simple. But simple doesn’t always mean it’s easy. If 5S is worth doing, it’s worth doing the hard work of sustaining the efforts. Only then do you reap the gains from this investment. Contributing Editor Jamie Flinchbaugh is a co-founder and partner of the Lean Learning Center in Novi, Mich., and the co-author of “The Hitchhiker’s Guide to Lean: Lessons from the Road.” IW | The Manufacturer’s Guide to Lean | 6
  7. 7. How to Design a Lean Implementation So Failure is Guaranteed Three critical characteristics will help gauge your chances for success. By Lonnie Wilson, founder, Quality Consultants Let me share with you a scenario I have seen often -- way too often. Someone from the C-suite, like the CEO, makes a visit to a nearby facility that claims it is “lean by every measure.” He is completely wowwed by the neatness, with a place for everything and everything in its place. He is amazed by the smooth flow of the product and the smooth flow of both the people and the information they need. He is further impressed with the “visual factory” depicting a high degree of control, resulting in excellent on-time performance with low levels of scrap and rework. Furthermore, he sees a workforce that is producing independently at a pace his facility cannot even approach, yet it is working with both a high degree of comfort and confidence -- almost like a stress-free environment. In addition, the facility is doing this with some surprisingly unimpressive machinery. And he is sold, absolutely, totally sold on this “lean thing.” He promptly gathers the rest of the C-suite and with conviction and passion declares that this “lean thing” is “exactly what we need.” With animation like he has never displayed, the CEO relays all of the wonderful things he has just seen. Soon he is surrounded by a group of impassioned followers. Quickly they devise a plan by appointing Juan as the lean leader. He is a midlevel manager who is proficient in many of these techniques and has been a vocal advocate of lean for years. Next they appoint three others to work with Juan -- the lean implementation team -- and announce that Juan will unveil the lean implementation plan in 30 days. The team, on schedule, publishes the implementation plan. They want to get everyone involved so their year-one objectives are to implement 5S and standard work across the entire corporation. Juan and his team teach all the facilities and spend a great deal of time traveling to each facility. Juan and his team not only introduce the initiative but also teach the tools. They then are required to follow up and assist the various locations as those workers implement the lean tools. Does this sound good to you? Well . . . don’t be fooled. This is the perfect formula for failure. So what’s wrong? We have a jazzed-up top management. We have dedicated expert resources to train and support. We have a published plan. Everyone appears to be on board. Excitement and anticipation are high. Doesn’t it sound like success is right around the corner? Well, the lean answer is “no.” The not-so-lean answer is “hell no.” Culture-changing efforts designed like this are failing by the droves. And it makes no difference if it is a lean initiative, reengineering, something smaller like a total productive maintenance push or an effort to implement Six Sigma. They will fail if they are designed in this manner. Again I say, “So what’s so bad about this?” Well, let me share some information. We at Quality Consultants have studied a number of culture-changing initiatives “ Does this sound good to you? Well . . . don’t be fooled. This is the perfect formula for failure. ” and compared their measured level of success to a variety of critical success factors. The success of each firm was computed using a 1-to-4 scale with 1 being a failed event, 4 being a continuing success, and with gradations between. Each critical characteristic was evaluated on a 0-to-5 maturity scale with 0 being very ineffective toward achieving success and 5 representing full maturity of the characteristic of concern. Using these data, correlations were made and three critical characteristics stood out as some that could be categorized as “sounding very good but not leading to success.” Each of these three critical characteristics was an “error” in the design of the implementation effort and was so significant that if the characteristic was done correctly, success was possible. However, if the characterisitic was executed ineffectively, failure was virtually guaranteed; each was a “litmus test” for failure. Just what are the three characteristics and what do the correlations to success look like? These critical characteristics, in question format are: 1. Have you integrated the culture changing initiative into your daily activities? 2. Do you have the required sense of urgency? 3. Is your initiative line or staff driven? ERROR NO. 1- Implement a Tools-Only Approach This characteristic measures how well you integrate your culture-changing initiative into the daily activities of both IW | The Manufacturer’s Guide to Lean | 7
  8. 8. the management and the rank and file. Many times people talk about the “tools” of lean manufacturing, citing such tools as kaizen, heijunka, 5S and value stream mapping, to name a few. Then an effort is made to integrate these tools into the business culture. This, too, “sounds” very logical. The people are taught the theory and techniques on how to apply the tools but all too often are left to their own inexperience on “how” to apply these tools. In effect the implementation team is saying, “Here is a tool, now go apply it.” All the “tools” of lean are countermeasures designed to mitigate some type of waste. So in “lean speak,” when we use this “tools” approach we are effectively saying, “Here is a countermeasure [a solution], now go find a problem to use it on.” As strange as that may sound, that is all too often the approach used. However, to properly root out waste and improve on a daily basis we must ask ourselves for: 1. an understanding of the present state 2. an understanding of the desired future state and 3. What are the next steps, the countermeasures, we must take to achieve the desired state? This questioning approach then leads to a selection of countermeasures that are employed. So in the end tools are selected. But they are selected based on the needs of the facility not some arbitrary selection process. When using the problem solving approach, which is the correct lean approach, tools are “pulled” based on the needs of the facility rather than “pushed” to them and expected to be utilized. ERROR NO. 2 -- Create No Sense of Urgency The second critical characteristic is that there must be an appropriate sense of urgency. Our mythical but all too real CEO got all “jazzed up” about what he saw, and I am sure he was sincere in his desire to improve his business. Again that “sounds” good, but the rank and file -- the folks with their hand on the tiller -- needs to know each and every day that what they are doing is necessary. Nothing will catalyze this better than if they can see daily that they are making a difference to what really matters. They need to feel both a sense of accomplishment and a sense of urgency to stay focused. The CEO may convey his passion in his periodic speeches, but each and every hour of each and every day the rank and file must be reminded by this sense of urgency to stay focused. With it they can see their contribution and sense their individual importance toward the betterment of the facility. The point is that the motivation of the workers cannot come in fits and starts from the passionate speeches of the leadership. It must be present, with the worker, on the floor, continually reminding and reinforcing his/her actions. There simply is no substitute for this. ERROR NO. 3 -- Let the Program be Staff Driven The third critical characteristics really gets to the point of precisely who is implementing the initiative and who will both learn from and lead the waste elimination efforts. When the staff is involved beyond basic design, initial training and specialized support untold amounts of damage are done. The initiative absolutely must be line-driven. The corporation management and leadership must be lean-competent; there is no substitute for this. And it must be driven from the top down with no layers missed at all. Again there is no substitute for this! When the line organization relies heavily on the staff to train and execute waste countermeasures a great deal of effort is improperly directed, knowledge transfer is missed and lean leadership is completely lost to the staff functions. This may look good in the short term, but in the long term it guarantees failure. Summary The danger of these three typical errors is that they all “sound” so good. But make no mistake about it; to be successful we need not just any lean tools that “sound” good but the specific lean tools that will assist in the attainment of our critical goals. We need to have a motivating sense of urgency that is visible each and every day, not just periodic injections of energy via “sound bites” from the C-Suite. Finally, although it may “sound” good for the lean implementation to have some early successes led by the staff trainers; in the long run it is imperative that the entire line organization incorporate lean leadership skills into their daily activities so this culture-changing initiative is the “new way” to do things, which then leads to continual success. Lonnie Wilson has been teaching and implementing lean and other culture-changing techniques for more than 40 years. His book, “How To Implement Lean Manufacturing” was released in August 2009. His new book on “How to Lead and Manage a Lean Facility” is under construction and will go to print in the third quarter of 2011. Wilson is a frequent speaker at conferences and seminars. In addition to IndustyWeek, he has published articles in Quality Digest and is a frequent contributor to iSixSigma magazine. His manufacturing experience spans 20 years with Chevron, where he held a number of management positions. In 1990 he founded Quality Consultants, www.qc-ep.com, which teaches and applies lean and other culture-changing techniques to small entrepreneurs and Fortune 500 firms, principally in the United States, Mexico and Canada. In his not-so-spare time, Wilson is the men’s varsity soccer coach at Cathedral High School in El Paso, Texas. You can e-mail Lonnie Wilson at law@qc-ep.com. IW | The Manufacturer’s Guide to Lean | 8
  9. 9. Safety Beyond Compliance A ‘lean’ approach to safety builds a culture that engages the entire workforce in proactively seeking out and removing injury risks. By Jill Jusko Too often, manufacturers think of safety only in terms of compliance. It’s easy to understand why. The Occupational Safety and Health Administration requires companies to observe a wealth of rules and regulations designed to keep workers safe and healthy in their workplaces. Fines can be hefty if the federal agency catches a manufacturing company not complying with those regulations, and severe consequences are assured -- to both the manufacturer and employee -- if failure to comply with the regulations leads to grievous injuries or even death. Nevertheless, safety should not be only about compliance, says lean consultant Robert B. Hafey, president of RBH Consulting and author of “Lean Safety: Transforming your Safety Culture with Lean Management.” His expertise comes from some 40 years working in manufacturing at companies that include U.S. Steel and Flexco, where he spent part of his tenure as director of lean operations. Hafey says safety should also be about building a culture that engages the entire workforce in improving workplace safety. However, too often the safety role is put in the hands of one person (human resources manager or EHS director, for example) to push down to the employees. “You have to have compliance, but you can also have a continuous improvement component,” Hafey says. That’s where lean comes in. Lean safety is about using lean thinking and lean tools to drive world-class safety programs, Hafey says. And for manufacturers who are trying to introduce lean into their operations and anchor it into their cultures, the consultant suggests that safety is a “great way to start.” “Everyone will rally around safety,” he says. To share the impact lean tools can make on safety, Hafey points to a safety kaizen he facilitated. The goal of the safety kaizen was to reduce the risk of injury, primarily ergonomic-related injury that can result from such actions as repetitive motions, excessive straining or moving of weights, and out-of-neutral body positions. The three-day safety kaizen event took place at a host manufacturing plant. The 10-person kaizen team included members from the host facility, other area facilities and a few additional individuals. As part of the event, the kaizen team observed an employee performing her duties as a packer. Unlike with some kaizen events, no stop watch was employed to time the woman’s speed in performing her tasks and no one documented each step. The sole focus of the event was to improve safety, Hafey emphasized. After observing the woman performing her tasks, the kaizen team developed a list of about 50 potential improvements related to reducing injury risk. For the second two days of the three-day kaizen event, the team spent its time making changes to improve the safety of the employee’s job. Among the processes implemented were one-piece flow to reduce the repetitive motions associated with batch work she had performed and changes that reduced the amount of bending required to perform the job. Hafey said ultimately the employee felt physically better as a result of the task modifications, and the work grew easier to perform. The changes even ultimately sped up how quickly she could perform her tasks, despite the clear objective of the kaizen event to improve safety. “By applying lean to safety, [employees] can see what is in it for them,” Hafey says. The use of lean tools is not limited to kaizen events. Hafey notes that many lean tools, such as 5S, rootcause analysis and A3 reports, for example, can easily be applied to driving world-class safety. The “Lean Safety” author also emphasizes the need to involve the entire workforce in driving safety throughout the workplace. “The more people you engage in safety, the more cultural safety can be,” he says. That’s why Hafey believes in having broad-based safety committees that includes plant-floor members with management facilitation. Ultimately, a safer workplace delivers on two of the goals of lean: less waste and improved customer focus. “Injuries are waste,” Hafey says. They lead to employees being at home recovering rather than at work being productive -- and they consume enormous amounts of resources. On the other hand, engaging the workforce in creating a safer workplace helps deliver on the promise of supporting customers, Hafey says. “But only if you think of safety as continuous improvement rather than only compliance and a cost.” IW | The Manufacturer’s Guide to Lean | 9
  10. 10. Lean Confusion It has been embraced, ignored, misunderstood and even derided, but lean’s proponents continue to exhort its value as a driver of operational excellence. By Jill Jusko Does it seem like lean has been under attack recently? For example, several lean proponents were up in arms in the wake of a July article in the Wall Street Journal. The article outlined component shortages faced by Apple and Nissan Motor, and concluded that in part “the drawbacks of lean manufacturing methods” were to blame, augmented by an overstretched global supply chain. Shoddy investigative reporting, commented one lean proponent about the article. Apple has never been considered a lean company, pointed out another. Lean has been completely misconstrued, said yet a third. Toyota’s recent woes, too, have been cited as an example of the failure of lean, a position frequently opposed by those who claim the failure was Toyota’s straying from its own Toyota Production System (TPS), the epitome of a lean production system. At the other end of the spectrum are the manufacturing companies and plants that extol the great productivity and other operational gains they have reaped through their implementations of lean manufacturing. Indeed, over the past five years more than 90% of finalists and winners of IndustryWeek’s own Best Plants competition, which recognizes manufacturing excellence, reported implementing lean manufacturing to a significant degree or more. Those same plants reported median 30% reductions in manufacturing cycle times over the past three years, median scrap reductions of 33% and median productivity improvements of 24%. Why the diversity of opinions regarding lean? If you speak with lean experts, a possible answer rears its head. That answer is that people are confused -- both about what defines lean as well as how to implement lean. Get that confusion straightened out and the value of lean as a driver of operational excellence grows more apparent. What is Lean? What precisely constitutes “lean” has been a challenge for many since the term joined the manufacturing lexicon more than 15 years ago. The term was coined by researchers led by James Womack to describe how Toyota ran its business. On Womack’s Lean Enterprise Institute website, lean’s core idea is described in this way: “to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.” Lean thinking, the explanation continues, “changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.” In reality, the definition of lean frequently varies depending upon whom you speak with -- whether it should or not. “I have always said if you had 100 lean practitioners in the room and asked for a definition, you might get 80 answers and about 20 themes, mostly around the tools of lean,” says Sue Gillman, a partner with Aveus LLC. Lean is strategic, states Rick Bohan, principal of Chagrin River Consulting. He says that done right, lean should provide an organization with substantial core capabilities that are difficult for other companies to emulate even over the longer term. A sustained competitive advantage is how he describes it. Few lean experts likely would find fault with that description. That said, managers don’t always view lean in that fashion. “They tend to implement [lean] as if it were simply tactical,” Bohan says. “They view it as simply a set of cost-cutting tools. Lean means providing better service to the customer at the same or lower cost, and looking at it simply as a set of cost-cutting tactics often can send a company down the wrong road.” Unfortunately, there exist literature and even consultants who reinforce that viewpoint, Bohan adds. The definition of lean is “pretty subjective,” agrees lean expert Art Smalley. “The analogy I use is the four blind men and the elephant, and they’re all touching a different part of the elephant and they’re all trying to tell you the truth of what they’re seeing or touching, but it’s not the whole.” Smalley is among the few Americans who have worked at Toyota in Japan, and he makes a distinction between lean and TPS. He is author or co-author of several books about lean, including “Creating Level Pull” and “Understanding A3 Thinking.” The lack of an agreed-upon definition may play a part in the current state of lean, which Smalley describes as a mixed bag. There are isolated success stories, he says, as well as a few plants that are implementing lean without results. Then, he says, there is a large pack in the middle that have started on the lean path, using a variety of tools and wondering why they’re not getting better results. “They’re starting to question themselves, which is a good thing,” Smalley says. Lack of a clear definition may impact peoples’ perceptions about what lean is. It may contribute to lean implementation outcomes. But execution -- or lack thereof -- is a significant contributor to a lean implementation’s success. That’s because lean is ultimately about solving problems. “The lean movement has been characterized by a tool-based em- IW | The Manufacturer’s Guide to Lean | 10
  11. 11. phasis,” Smalley says. People fall in love with tools like pull systems, 5S and standardized work, for example, and forget to problem-solve. “You really have to put [the tools] in the right structure and context with problem solving discipline to improve productivity, quality, cost, delivery, whatever dimension you are focusing on,” he says. Who is Doing Lean? Good data to identify how many manufacturers are employing or attempting to employ lean are difficult to come by. Lean guru Norman Bodek suggests that maybe half of U.S. manufacturing companies are into some aspect of lean. “Many do run kaizen blitzes, but only a fraction are truly committed to using all of the aspects of lean,” he suggests. “As an example, I feel that only 1% have the person ‘pull the cord’ [to] stop the process when they discover a problem.” Bodek, an author and publisher, has traveled to Japan more than 50 times to bring Japanese manufacturing methodologies, including the Toyota Production System, to U.S. industry to help improve quality and productivity. Bodek is leading a week-long lean study tour to Japan in September, which quickly sold out, seeming evidence of lean’s continued draw. While that news is good, it’s only 24 travelers, points out Bodek. “We should have 24,000 wanting to go,” he says. Thomas & Betts Corp. is among the manufacturing companies that have embraced lean in its operations. Most of the plants use some lean tools every day, says Herb Bradshaw, plant manager at Thomas & Betts’ Athens, Tenn., facility, a 2005 IW Best Plants winner. Whether it be from when customers think about purchasing a product, to using pull on the manufacturing floor, to working with suppliers, or to stabilizing processes -“We use lean in everything we do.” And lean continues to reap dividends for the Athens plant, even as it has been a constant for nearly 10 years. For example, he points to a recent team effort that improved throughput in a cell by 40%. “It never ceases to amaze me.” Like others, Bradshaw also shared his belief that an operation never fully implements lean, “because you always see more things to work on.” What’s Missing? Companies’ lean implementations frequently focus on singular aspects of the process rather than the whole, suggest several lean experts. For example, Smalley opines that quality is underemphasized. Just-in-time and flow seem to take precedence even though “jidoka” -- or quality built in during the manufacturing process -- is a pillar of equal importance to JIT in the Toyota Production System. Jidoka, which Toyota translates as automation with a human touch, means that equipment stops running when it detects a defect and ultimately when processing is complete. That ties into another difference between lean and TPS outlined by Smalley -- the production equipment. TPS emphasizes the importance of quality machine tools, with significant emphasis on developing better machines that break down infrequently. That’s not so much the case with lean, he opines. People often take the machinery for granted, while they will point out the kanban system or a standardized work chart. The equipment is underappreciated because what is happening is invisible inside the machine, he says. For many people, “You walk by all these big machines, and you don’t even know what you’re looking at,” Smalley says. At the other extreme is the human side of lean, an aspect Bodek says U.S. companies tend to overlook. Bodek cites automotive industry supplier Autoliv as one example of a manufacturer doing a good job of addressing the human side of lean. Last year at an Ogden, Utah, Autoliv plant, he notes, managers received 63 implemented ideas per person. “They are an excellent example of a lean plant. People are encouraged to use their brains, opposite to the [Frederick] Taylor concept of asking the workers not to think.” That’s not to say it doesn’t still have a ways to go, he adds. Even Toyota, Bodek says, has not designed work for the full potential of its people’s talent. Lean is never successful without substantial involvement from employees at all levels, adds Bohan. In most companies, that requires a substantial culture change, an aspect of lean that Bohan says frequently is ignored. Adds Bodek: “People should be empowered at every level based on their experiences, expertise and knowledge, but our management system asks everyone before change takes place to get permission and that permission is rarely granted. There is a great fear of making mistakes and yet making mistakes is one of the only ways we learn.” Aveus’ Gillman cautions that lean gains are not sustainable without employee buy-in and involvement, at least “not if the employee is expected to participate in the new process, or way of doing things, over time.” She adds, “Lean generates a lot of excitement and initial buy-in to the process and solution. However, the test of sustainability is if you can move the people who instituted the change and the process remains robust.” What Next for Lean? The lean movement continues to grow and evolve, moving beyond manufacturing production and into areas such as product development, administrative, information technology and accounting. It has moved beyond the manufacturing industry as well, most notably into the health care industry. Smalley suggests that asking what’s next for lean is a question that may be posed too soon. He remains focused on today, noting there is still plenty in the here and now to address. “When we have 100% uptime, 100% quality, short lead times, then we can worry about tomorrow,” he says. “If you want to get results, you have to address your problems of now.” IW | The Manufacturer’s Guide to Lean | 11
  12. 12. Lean for Machines Applying continuousimprovement strategies to maintenance can help your plant run like a well-oiled machine. By Josh Cable Before General Cable Corp. began its lean journey about a decade ago, Mark Thackeray, senior vice president for North American operations, says the company’s maintenance personnel were kind of like firefighters -- responding to equipCarlos Garcia conducts an analysis of overall equipment effectiveness (OEE) at ment breakdowns as quickly as possible. General Cable’s facility in Des Plaines, Ill. But now that the Highland Heights, Ky.-based manufacturer of wire and cable products has implemented lean stratPhoto courtesy of Gemeral Cable Corp. egies at many of its North American plants, Thackeray notes that the company has shifted from a “reactionary mainte- breakdowns, schedule preventive maintenance activities, nance” mode to a “preventive and predictive maintenance” anticipate its needs for maintenance parts and automatically focus. issue purchase orders before machine maintenance work is “[W]hat we’ve changed in our philosophy about main- performed, according to Thackeray. tenance in the lean environment is you have to be much “That has helped us to be much more compliant in workmore involved and proactive in ensuring the reliability of order completion,” Thackeray explains. “It’s allowed us to machines instead of running to the problem when they’re schedule the time we need to maintain our machines in a broken down,” Thackeray explains. preventive mode instead of running Another shift since General Cable them to failure, without disappointing Lean Tools for Maintenance embarked on its lean journey in North customers on work orders. And it’s alA number of common lean tools can be applied America has been the company’s eflowed us to minimize our investment in to the maintenance function to remove waste fort to squeeze additional output -- or MRO [maintenance, repair and operain the delivery of maintenance services and “entitlement capacity” -- from its extions] inventory, yet still have better upimprove equipment performance and reliability. isting equipment rather than buying time on machines.” They include: new equipment when plants reach full Thackeray notes that maintenance capacity. To achieve this, the company personnel are embedded with plants’ • 5-S (sort, straighten, scrub/shine, has focused on improving its overall natural work teams, a departure from standardize and spread/sustain) • Elimination of the “Seven Deadly Wastes” equipment effectiveness (OEE), a meathe “old traditional factory” days when (overproduction, waiting, transportation, surement that shows the percentage of “maintenance was a very prized set of processing, inventory, motion and time that equipment, when running or skills tucked away in the corner.” Having defects) required for production, is producing maintenance and production personnel • Standardized workflow • Value-stream mapping good-quality products at current rate co-located not only has had an impact • Just-in-time (or speed) compared with theoretical on OEE rates but also on metrics such • Kanban (pull system and visual cues) maximum rate. (OEE is calculated by as safety. • Autonomation (quality at the source) multiplying uptime rate by production “So rather than having maintenance • Mistake-proofing • Kaizen rate by first-pass quality rate.) in a separate corner of the building, we “Here we look to maintenance as a like maintenance to actually have their Source: “Applying Lean Concepts to the Maintekey stakeholder in improving the uplocation in the cell, in the value stream nance and Reliability Function” a presentation time leg of the OEE metric, and finding -- we like their toolbox to be front and by Bruce Hawkins of the Management Resources Group Inc. us additional capacity without spending center of the cell -- and for them to be money on machines,” Thackeray says. part of that work team that has ownGeneral Cable has implemented a ership of the mini factory,” Thackeray number of continuous-improvement strategies to pursue explains. “In so doing, they have daily contact with operaits maintenance objectives, including investing in a formal tors. So when an operator has a safety concern, they can pull computerized maintenance management system (CMMS). maintenance right over and they can figure out the way to Through its CMMS, General Cable can track equipment address that unsafe condition immediately.” IW | The Manufacturer’s Guide to Lean | 12
  13. 13. When their natural work team conducts a lean activity unplanned machine downtime. such as a kaizen event or a single-minute exchange of dies Plant manager Matt Walker points out that the facility has (SMED) improvement, maintenance personnel routinely par- added visual indices (such as red and green stripes) on gaugticipate, Thackeray says. es to make it easy for operators to determine if equipment is “We may have a kaizen to develop a visual factory re- running within its acceptable parameters. If a gauge “starts plenishment signal for a feeding operation. Maintenance creeping up or getting closer to the high side,” the operator will be involved in that for a number of reasons,” can log it on his or her TPM sheet for the day, and he explains. “One is to help design the physical atthe supervisor would enter a maintenance work tributes of the pull signal, whether that’s putting order, Walker explains. lines on the floor, a containerized replenishment “The operator may not have the training and signal, and on lights or something of that nature. skillset in electrical and hydraulics troubleshootBut they also help on the upfront design of that ing, but they understand the basic functions of to come up with low-maintenance solutions. From the machine and how it normally runs, and how it a safety perspective, they look at it from a prehas run,” Walker says. operations standpoint and ask, ‘Does this create a The Carrier -- Carlyle facility, which was named “Here we look to maintrip hazard? Does this create a pinch point? Does tenance as a key stake- one of IndustryWeek’s Best Plants in 2009, has this create an unsafe condition or allow for an un- holder in improving achieved some impressive results from its TPM safe act that we can solve before we ever put it in the uptime leg of the approach and lean strategies. The plant’s averOEE metric, and finding place?’” age machine availability rate last year was 99.5%. us additional capacSince applying continuous-improvement princi- ity without spending Meanwhile, the plant has reduced the number of ples to maintenance, General Cable’s North Ameri- money on machines.” maintenance hours by about 20% over the past can plants, on average, have achieved a 40% im- -- Mark Thackeray, three years, according to Walker. provement in their OEE rates over the past decade. senior vice president, Bruce Hawkins, director of field operations for North American Still, General Cable, which has had multiple plants operations the Southbury, Conn.-based professional services named IndustryWeek Best Plants winners over the firm Management Resources Group Inc., is a big years (including two plants in 2009), is striving to believer in the power of TPM to “help lean out the improve those rates. maintenance processes.” He notes that the TPM “I don’t view it as world-class until you get to the 85% philosophy emphasizes the importance of engaging “anyrange,” Thackeray says. body who has anything to to do with the physical assets of the plant” in “managing and caring for” those assets. The Power of TPM Hawkins adds that with proper training, “it’s perfectly OK to have operators be responsible for the basics of mainteLike many IndustryWeek Best Plants winners and finalists, nance.” General Cable practices total productive maintenance (TPM), “We call the basics of maintenance ‘TLC’: tightening, lua comprehensive approach to maximizing equipment effec- bricating and cleaning,” Hawkins explains. “And just like I’m tiveness. The objectives of TPM are to eliminate responsible for that on my own car, operators waste, reduce defects, maximize productivity and should be responsible for that on the machines engage the work force, and it is considered a key they operate everyday. They’re the ones who, in enabler of a lean maintenance strategy. essence, own the reliability for their equipment. I One important component of TPM, as noted by don’t expect the guy down at the garage to own Lafayette Hill, Pa.-based maintenance consultant the reliability of my car -- I do that by taking care and author Joel Levitt in his book “Lean Mainteof the basics.” nance,” is encouraging operators “to take a greater While a big part of TPM is operator empowerrole in the health and productivity of the machines ment, an equally important aspect is how it cre“It’s perfectly OK to have they are tending.” ates a collaborative relationship between two operators be responAt the Carrier -- Carlyle Compressor Facility in sible for the basics of commonly disparate functions -- maintenance and Stone Mountain, Ga., for example, operators con- maintenance.” operations -- asserts John Kravontka, president of duct daily “PMs” -- inspections based on checklists -- Bruce Hawkins, direc- manufacturing solutions for Manchester, Conn.tor of field operations, of performance and safety criteria specific to their firm Management based Fuss & O’Neill Manufacturing Solutions LLC. machines -- and typically are empowered to clean, Resources Group Inc. “In so many plants we walk into, you’ll see the opinspect and change filters on their machines as erators in one corner saying, ‘Man if maintenance well as check gauges to make sure their machines could fix this equipment better and if they knew are operating within defined operating parameters, accord- what they were doing, it would run a lot better,’” Kravontka ing to Greg Bailey, facilities manager. In some cases, opera- says. “And maintenance is in the other corner saying, ‘If the tors also may perform some fluid changes. operators didn’t mess up the equipment and they knew how While the daily operator PMs are just one level of preven- to operate it, this thing would work better.’ It’s maintenance tive maintenance conducted on machines (a work-order versus the operators, and maintenance versus operations. system generates a schedule of weekly, monthly and annual The TPM process helps us pull both of them together to work routine maintenance), Bailey notes that the operator PMs are as a team to improve the equipment performance and reli“our first line of defense” against problems that could lead to ability.” IW | The Manufacturer’s Guide to Lean | 13
  14. 14. Don’t Let Size be a Lean Barrier Small manufacturers have advantages when it comes to implementing lean. By Jill Jusko The state of lean manufacturing across North America is largely a matter of anecdotal evidence. And what evidence there is focuses primarily on larger manufacturers -- Toyota, Danaher, Ford and even significantly smaller companies than those behemoths. However, frequently left out of the mix is the small manufacturer, whose annual revenue may top out at $50 million. The state of lean among these small manufacturers? “My sense is there’s a world of opportunity out there,” says Rick Bohan, principal, Chagrin River Consulting, acknowledging the lack of hard data. He suspects not as many small companies are implementing lean as should be or as well as they could be. In some respects, one could point to the literature about lean as a culprit in the lack of implementation. Bohan says it is easy to get an impression from lean literature that lean is a big-company initiative. Small firms likely don’t have the resources to have a full-time, separate lean champion or spend three days to train everyone on lean methods, both of which are frequently cited in stories about lean implementations. Small companies can also point to the reality that everyone already is wearing two or three hats. “They’ll say we’re already pretty lean,” Bohan says. “We make these parts and we send them right out.” Bohan some of that comes from not fully understanding lean, a challenge that besets companies of all sizes. Bohan in- cludes in his definition of lean: * It is strategic not simply tactical. It results in substantial capabilities that are tough for other companies to emulate. * It focuses on customer service. * It always involves a substantial change to the company culture. Improvements don’t stick if culture change isn’t a part of lean, he says. The question companies should be asking is “Can we put a better product in the customer’s hands exactly when the customer wants it, in the form and format the customer wants it, every time without error or delay,” Bohan says. “That’s the question that should be driving the lean initiative. Not so much ‘Can we reduce the cost of what we’re doing now.’” The consultant points out that small companies actually have some advantages over large companies when it comes to implementating lean, especially with respect to the all-important aspect of culture change. In smaller manufacturers, the CEO’s office may be right next to operations. He can -- quite literally -- speak to everyone on a daily basis to discuss the lean implementation and how each individual is feeling or reacting to it. It may also be easier to see when the workforce is beginning to divert from the lean implementation or when everyone’s energy is beginning to fade. As a result, a smaller firm can more quickly get back on track. “Feedback loops are short [in small firms]. That’s an advantage to implementing lean,” Bohan says. Also, “My experience has been the results show up more quickly and substantially in small companies.” Not an IW subscriber? Click here to begin your free print or eNewsletter subscription today! IW | The Manufacturer’s Guide to Lean | 14