“The results from a one week improvement event led to as much as four times the previous throughput measurements in our factory! Outstanding coaching and direction allowed employees at all levels to quickly understand the basics of lean manufacturing and act on them right out of the gate. The enthusiasm of the team continued into the factory and made a significant positive change to the way we do business forever.”
– David Hyden, Mfg. Process Improvement Manager
The following examples present actual results achieved while working with clients to implement Lean Manufacturing and Process Improvements. We describe a few interesting results that also illustrate how Lean Manufacturing tools are applied. Only a very small fraction of our client success stories are summarized below.
Problems: With every step made toward creating a Lean environment, campus layout at this successful foundry became an increasingly important issue. Quite literally, dozens of people would make a 4 to 8 block trip (depending on the location of their work center) several times a day to a building housing the NDT (non-destructive testing) equipment. Parts were processed in buildings several blocks away, then transported via carts, trucks, or forklifts to NDT for further processing. Generally, parts would be tested at NDT, then returned to the original building for additional processing. Certain parts would repeat this cycle several times.
Lean Solutions: Recognizing the importance of locating the NDT area near its internal feeders, we located a centrally located space that would sufficiently meet the needs of the NDT area. After considerable re-layout, equipment streamlining and workflow improvements, the new NDT location used only about one-third of the previous space. Additionally, we incorporated a lab area, previously located adjacent to the old NDT facility, and then added a shipping function for the immediate packing and shipment of completed products. We then redesigned the x-ray processing booth to accommodate the improved workflow, and KanBans were established between NDT and their several “Internal Suppliers.”
Impact/Results: Dozens of lost production hours are recovered on a daily basis. Time spent transporting parts is now spent processing products. Communication and feedback between “Internal Suppliers” and “Internal Customers” significantly improved. Defects caused by packing and transporting parts are now almost completely eliminated. The now unnecessary and distant building that formerly housed NDT has been leased-out to further generate revenues. Very conservative estimates value this improvement at more than $2 million annually.
Problems: Long changeover and setup times between product runs created considerable downtime. Buying additional equipment was under consideration to prepare for a forecasted increase in demand. Quality defects and raw material waste issues considered “inevitable in this business” were also of great concern.
Lean Solutions: Using S.M.E.D. (Single Minute Exchange of Die) methods, we reinvented the entire operation and created a procedure that minimized downtime. Setups and changeovers became well orchestrated events. Due to the nature of the equipment, we also relied heavily on 5S and ergonomic tools to properly stage needed items and reduce risk of injury and operator fatigue. Quality defects were addressed by implementing a series of strategies for scheduled component maintenance and machine calibration. Raw material waste was also addressed through a “go, no go” procedure and a setup innovation.
Impact/Results: Depending on the number of colors used on a job, setups and/or changeovers were consuming between 3 and 7 hours (5 hours on average) of production downtime per machine. After implementing the new procedures, all setups and changeovers were completed in under 30 minutes regardless of complexity. This improvement negated any need to purchase equipment to meet forecasted demand.
Third shift employees were brought to second shift and throughput increased. An approximate 25% decrease in raw material waste became standard, and quality defects decreased greatly. These improvements were applied to six similar machines throughout the plant. Each of the seven machines experienced an increase of approximately 5 hours per shift in additional uptime. The company gained shop floor production time of about 5 hours per machine per shift (accounting for the elimination of the third shift), resulting in an additional 70 hours of capacity per day, with a third shift available in the event sales created even greater demand. These improvements resulted in more than a $3 million annual windfall, accomplished without adding a single piece of capital equipment or additional employees.
Problems: An awkward production process and workflow in the Transit Antenna build area created excessively long lead-times. This small factory used floor space too liberally, while the owner considered purchasing a new building to meet their needs.
Lean Solutions: We restructured the floor shop layout into a single work cell for the antenna build area. The primary “bread & butter” products became streamlined using work instructions and a balanced cell. 5 part KanBans between operations emerged, later becoming 1 piece between assemblers and operators. Critical processes integrated visual aids and many “rules” were challenged. Working closely with company engineers, we created several fixtures to make critical dimensions and procedures mistake-proof. The employees learned to eliminate many redundant tools and procedures from their processes. Quality officers incorporated testing procedures into the process for immediate feedback and quality verification. Implementing Standardized Workwas another important part of the solution.
Impact/Results: Initially the “visual shock” of turning 26 workbenches into only 6 workbenches became almost overwhelming. Since floor space was a highly valued premium, this emerged as one of the great accomplishments of the effort. Soon after the re-layout and implementation of the new processes, it became obvious that production increased to unprecedented levels for many of the programs. Teamwork became the norm and, along with a great deal of collaboration with engineering, many programs began using modified/standardized components.
Since only a maximum of 6 people were now needed to operate the cell (including the newly integrated testing area), the remaining 5 people were relocated to other lagging areas throughout the plant. Since this level of success was experienced in every area of the plant, staff was simply not replaced as natural attrition occurred.
Sales were in a slump for this market as of this writing, but should they rise again, this small company will be in position to nearly double their production, with only half the staff they once employed. Not one employee lost their job due to these improvements.
Problems: This global leader produces a wide variety of cables and assemblies. They needed to reduce setup times and WIP (work in process) inventory. They also struggled with quality consistency issues that warranted immediate attention. Long product runs were common, but did not allow sufficient flexibility to reduce lead-time to market.
Lean Solutions: We first attended to the setup and changeover functions of essential equipment and found a number of ways to streamline the process. These methods were then applied to similar equipment. We then established KanBans between cable processing functions that required upstream processes to stop building product that could not be completed due to resources and equipment running at capacity. This, of course, focused attention on the upstream (constraining) processes and equipment. We then level-loaded these production areas via KanBans and then established new procedures.
As always, 5S (Visual Workplace) methods were used to clean and organize the machines and areas for maximum efficiency and quick changes. An improved “1st article” process was created and adopted to ensure “near perfect” products. These were products that would eventually be as long as 2000 feet and consume a considerable amount of production time and materials. Staging procedures and preparation checklists were instituted to maintain quality, process integrity and follow-through.
Impact/Results: Machine setups (from taking off the “old job” to successfully testing the “new job” 1st article) realized Immediate gains that, prior to the Blitz Event, were ranging from 3 to 12 hours (5 hours on average). At last check, setups averaged less than 35 minutes, with many below 17 minutes. This added approximately 5 hours of additional up-time per machine, per day. This number would be higher, but the ease of setups and changeovers allowed for more flexibility to the product mix: a very desirable result, which consequently, increased changeovers.
Quality checks for 1st articles that could take an hour or more were prioritized and all staff and equipment were subordinated to their rapid completion. “Known” products were given a “conditional green light” to continue production while the inspectors conducted the 1st article check. This added considerably to the daily up-time. “Unknown or unproven products” were required to pass certain checks before production could continue. In the end, the company deemed current equipment sufficient to meet not only present demand but also forecasted sales expectations for quite some time.
The teamwork and contributions of those involved in these improvements were impressive by any standards. These improvements increased the capacity of this product line by approximately 35%, resulting in several million dollars of potential additional sales per year.
Problems: Changing from one shift to another created long periods of low or stopped production. Since this was a three shift operation with shift changes averaging 30 minutes three times per day, this became a costly and destructive routine. Cell “purging” (consuming all WIP without leaving work “in cue” for the next shift) was also a common practice to meet or exceed each shift’s specific production goals.
Lean Solutions: Working with the teams across all 3 shifts, we devised a changeover process that would minimize downtime and allow for adequate cleaning and maintenance of equipment in the work area. Procedures were agreed upon, posted, trained on, and adopted. The new procedure required all employees to spend the first 10 minutes of his or her shift cleaning the work area, servicing equipment (where possible), and communicating with the operator they would be replacing regarding special concerns or critical information. All of these duties were performed while the operator from the previous shift continued to run the equipment or completed assigned work processes.
“Purging” the cell was discontinued so that in-coming operators could begin with work already waiting for them. Out-going operators would finish paperwork and minor cleaning only after their replacement was in position and working. Appropriately, we referred to this new shift change methodology as the “Tap On The Shoulder Shift Change.”
Impact/Results: Adding one and a half hours of production up-time to a high velocity manufacturing plant yields incredible and powerful results. Streamlining the shift change process in this one cell increased much needed capacity, improving throughput by more than $1 million annually. This process was adopted as the official, plant-wide, shift change protocol.
We never calculated the plant-wide impact of implementing the “Tap On The Shoulder Shift Change,” but experience tells us that many of the other 45 cells were enduring similar losses in production prior to its implementation. It was commonly speculated among management that this one change in procedure was worth tens of millions of dollars to the company annually.
Problems: This company produced its primary “bread and butter” product at a rate that would not meet a sales forecast, a number that would double the current rate of demand. Senior management considered adding an additional 20 to 25 production workers to meet this demand. Quality defects plagued approximately 99% of every product made, most of which were discovered internally then corrected. Finished goods and WIP (work in process) inventory levels were also elevated beyond desired levels.
Lean Solutions: The “Blitz Team” worked hard to create a set of standardized work instructions that would guarantee quality and increase productivity. Independent workers were asked to form NWT’s (Natural Work Teams), and work together in a new cellular layout designed during the Blitz process. 5S, 2-bin, and one piece KanBans were used to reduce WIP (work in process) inventory and allow for uninterrupted parts replenishment. Many adopted recommendations streamlined the assembly of this and other mainstay products.
Other innovative solutions and standardization of components and hardware were suggested and implemented. Common tools that were needed, but in perpetually short supply, were purchased and placed in specific, convenient locations. A special turntable was constructed to allow for easier lifting of heavy parts. Many procedural and disciplinary adjustments were made to ensure a constant flow of products through the newly formed cell.
Impact/Results: Prior to the Improvement Blitz, individuals were expected to produce 1.8 of the primary unit each day. After the Blitz, the new cell, using only 4 assemblers, was capable of producing one unit every 15 minutes, 4 per hour, or 32 units per day, with 99% perfect quality! This was a productivity improvement of more than 4x. It is only fair to note that due to some long-standing cultural and training issues, this cell did not always perform at this level. This company showed exemplary compassion for its workforce and invested in the development of their people and their skill-sets.
WIP and finished goods inventories were brought under control, and no additional production staff were hired. Currently the company is feeling the effects of a recession, as are most manufacturers. Once demand increases, this high-quality supplier will be capable of meeting it easily with the resources they already have. In full operating mode, under peak demand conditions, this new cell will generate additional revenues in the tens of millions of dollars.
Problems: Machine downtime and its associated costs impacted the bottom-line profitability of this well established, full-service machining operation. Concern about proper care and maintenance of equipment warranted a proactive effort. Increasing teamwork and cooperation between shifts was also at issue.
Lean Solutions: We worked with the machine operators, both highly skilled and new to machining, to begin using the tools of TPM (Total Productive Maintenance). We constructed work instructions, both visual and written, along with standardized maintenance routines of the machines in the CNC area. Some machines had hidden defects, along with grease zerks and other components requiring previously unknown lubrication and/or maintenance. We facilitated this process with members present from both day and swing shift. By using the talents of machinists from all areas of the plant, teamwork and cooperation became a natural and happy byproduct.
Impact/Results: Many potentially destructive and completely debilitating defects were discovered and corrected. A comprehensive schedule was created, complete with a check and balance system, to ensure all components were being adequately cared for and maintained. It is difficult to quantify and assign a dollar value to “what might have gone wrong,” but it was obvious to the cross-shift, interdepartmental team that our proactive efforts would extend the machines’ service lives that underwent this process. Previously separated, niche operators became highly interactive and cooperative throughout this process. Many long-standing assumptions and inhibitions to communication were discarded. In another division of this company, we trainedTPM facilitators to help teach and implement the same program throughout the remaining divisions, with impressive results and many successes.
Problems: A dynamic and visionary manager at this foundry recognized an increasing need to empower his staff to make more decisions with less direction. Increased teamwork and cooperation within and between shifts and departments was required in order to facilitate this new management style and to meet the expectations of this exceptional leader.
Lean Solutions: Using a customized approach, we designed and facilitated a day-long outdoor experiential team training event. This was followed by another day of classroom processing and training on key, area specific, and business issues. Communication skills, problem solving, and several Lean Manufacturing basicswere also covered. Honest discussion about area issues and redefining all departments and staff as internal “customers” and/or “suppliers” was an important mind-set change and a matter of practical application.
Impact/Results: Normally it is difficult to quantify the results of such an undertaking. In this case, however, the foundry reported a 20% gain in productivity in the area during the following week. This gain was sustained and later improved upon after a re-layout of the area in a Blitz Event. Empowering trained and responsible adults to take real ownership in their areas and to be accountable to common goals will continue to net outstanding results for this forward-looking company for many years to come.
Problems: Pressure from their customers for shorter lead times and improved on-time delivery performance was causing this privately held company severe difficulty. They faced a very real risk of losing some critical accounts. Key customers were demanding “next day” shipment. They expected to be able to place an order today and pick up or have their order shipped first thing the next day. The company had spent many months attempted to make the transition to lean on their own, with minimal success. Lead times were still too long, and delivery performance was unacceptable.
Lean Solutions: In addition to the more traditional lean techniques such as instituting kanban controls and improving change-over times, this client required some more fundamental disciplines. Step one was to immediately change the attitude in regard to schedule attainment. Brief all-employee meetings were held on all shifts. The need for absolute schedule adherence was explained and personalized: “A commitment date to a customer is a “promise”. How do you feel when someone breaks their promise?” We instituted a simple policy: The day ends when the schedule is complete, … NOT the other way around. Overtime was authorized and basically automatic if needed to attain the daily schedule. The next step was to “stagger” the shifts so that each shift could be held accountable for schedule attainment. Improvement curves (Goals) were set by the employees, and monitored daily. The next problem was in creating flexible capacity (the “rubber” factory). Like most companies, the majority of their work force was on the first shift. This posed a problem: Many orders were received late in the day, for next day shipment. We obviously needed to change the balance of our shifts. Goals were set to gradually move toward a 50/50 balance of the day and night shifts. This was accomplished through volunteers, replacements for attrition, advancement opportunities, and rate adjustments.
Impact/Results: Within weeks, on-time delivery was at or near 100%! Average lead times were cut from two weeks to three days. Set-up times and Lot sizes were cut by 75%. Total inventory was reduced by 50%, and one entire building was freed up for new product introduction.
This large manufacturing facility produced electro-mechanical medical devices. The plant was vertically integrated, producing their own circuit board assemblies, cable assemblies, and the box-build final assembly and test. The process was driven by an ERP system with multi-level bills of material, shop order travelors, pick lists, lot sizes, and stock room transactions. Costs were too high, lead times were too long, and they had too much money tied up in inventory.
Inventory reduction goals were set with the management team, and pushed down through the organization. The initial efforts focused on the ERP planning process. Bills of material were challenged and compressed. Lead times and lot sizes were cut. Parallel efforts were begun within the various production departments. Cellular manufacturing techniques were introduced to the cable assembly, wire harness departments, and final assembly. Natural work teams planned and participated in their area re-layouts. Flexibility was built-in so that all future layout modifications were essentially free. Kanban controls were established both within the subassembly areas, and between them and the final assembly areas. This eliminated many non-value-adding reporting steps and stock room transactions. Shifts were balanced so as to allow product to continue to flow across the entire process, and not just the “bottleneck” operations. Sequential inspection was initiated, followed by failsafe steps.
In less than six months:
- Inventory was reduced by $1.7 million
- Lead times were cut from 8 weeks to 5 days
- First pass failures were cut by 60%
- On-Time Delivery went from near zero to 100%
Simplification and streamlining resulted in the freeing up of resources (people, equipment, and space) for other growth opportunities.
This large division of a vertically integrated steel mill had been losing money for several years. The parent company was seriously considering closing it down. In addition to poor financial performance, the division had too much cash tied-up in inventory and had lead time and delivery performance problems.
The number one issue faced when attempting to convert any large, staid, business is its legacy of historical doctrine. In the case of steel mills (we’ve worked with eight of them, worldwide) the direct quote is “That’s not how you run a steel mill.” While there is a litany of standard objections, the number one is always “local optimization.” This company’s measurement and reward systems were typical, i.e. all geared to maximizing the efficiency of the individual operating units (tons per hour), … but not necessarily the entire process.
This inevitably results in a different set of operating rules at each unit. One unit wants to run by “grade,” another “thick to thin,” “wide to narrow,” “light to dark,” etc. The easiest way to accomplish these conflicting objectives is to keep a huge pile of inventory in front of every unit so that they can put together an optimal run schedule. Note that this “optimal” schedule can, and often does, lose sight of the customer promise date. Also note that these queues extend lead times, hide defects, increase handling damage, add difficulty to the scheduling process, tie up cash and space, cause excessive expediting, etc.
We began the Lean Transition with an education session for top management. Luckily, one gutsy division VP agreed to be the guinea pig. Inventory reduction and on-time delivery goals were set, and commitment attained. Brief overview education/introduction classes were provided for all employees. Then scheduling rules were attacked, blitzes were held to resolve obstacles, internal teams were formed to propagate the process, kanban controls were initiated, etc.
Inventory reduction goals were pushed down through the organization. These were readily understood at the unit level: Kanban limits, i.e. the number of coils allowed in front of an operating unit, were to be reduced an agreed amount over a specific period of time. Another key factor in achieving World Class operating performance is to control the order book. Strict capacity loading rules were put in place to assure that we did not overload the mill.
In Ten Months:
- Sixteen million dollars (U.S.) cash was generated via inventory reduction
- Lead times were cut by 60%
- Average lot size was cut by 65%
- Average coil mass increased by 9% (yield improvement)
- On-time delivery soared, from 55% to 95%, the best in their industry
- Customer complaints dropped by more than half
- Cost of quality plummeted
- Profitability improved by $5 million (U.S.) per MONTH
This producer of military hardware was experiencing production problems. Costs were too high. Delivery performance was not at acceptable levels. They were experiencing severe scheduling difficulties. Quality was being “inspected in.”
The initial meeting with the management team was spent identifying some of the real root cause issues. It soon became apparent that much of the scheduling difficulties were self imposed. While their contracts were eighteen months in length, with fixed linear delivery requirements, their lot sizing rules were causing extremely lumpy production schedules. The solution was to eliminate the constraints that kept them from producing at the same rate as the delivery requirements. Some of the constraints were kitting of electronic components. Others were related to set-up costs. Most, however, were caused simply by past practice; “we always build these in lots of 100.” An education overview of lean philosophy and techniques got the process started. Point of use stocking of components, and SMED techniques quickly allowed us to “build to rate.” Once this was accomplished, kanban signals replaced subassembly work orders, significantly reducing complexity and cost. This dramatic reduction of work in process inventory reduced the amount of scrap and rework proportionally. Introduction of sequential inspection caught defects almost immediately and substantially improved the ability to define true root causes. Failsafe devices (See Error & Mistake-Proofing) were then introduced, where applicable, to eliminate such.
Within a few months:
- lead times were cut by 80%
- On-time delivery reached and remained at 100%
- Shop floor space was cut in half
- Yields doubled
- The complex MRP based production scheduling was replaced by simple pull signal kanban controls
- And overall productivity increased by more than 20%
The CEO of this large integrated packaging company was a board member for one of our highly successful steel company clients. He asked us to help them achieve similar results. They had too much cash tied up in inventory. Their lead times were too long, costs were too high, and delivery performance was not world class. The company had a total of forty-five stand alone plants, all over the world.
Our approach was to establish an internal measurement process that would support and encourage the actions required to become a world class producer. These simple measurements (goal curves) included an aggressive aggregate inventory reduction target, and a similarly aggressive on-time delivery objective. Corporate measurements were standardized, and goals were then pushed down through the organization to become division and plant goals. After a rapid, extremely successful pilot plant implementation, our role became that of train the trainers. We did the initial kick-off, management team overview training, and assisted with goal setting for each plant. The internal support teams that we had trained then took over the majority of plant support. The internal support teams were established and educated in our process. One team was a general lean implementation team, trained primarily by working with us, hands-on, at a few plant sites. Another team was targeted specifically on rapid change-over (SMED). Many of the plants utilized similar equipment, so lessons learned were readily transferable. Our primary focus then shifted from “tools and techniques” to changing the corporate culture. Plants were provided the autonomy to set their objectives, and were expected to achieve them. Corporate and division roles were to support the plants in these endeavors. A process for achieving these goals was left in place.
Corporate wide inventory was reduced by $150,000,000, while lead times, quality, delivery, and profitability all substantially improved. Probably most important; a culture of continuous improvement was established and maintained.
Problems: The maintenance department at a large union mill had an enormous amount of work to complete with a significantly reduced staff over earlier levels. The initial assignment focused on helping them learn how to more efficiently complete the many required and routine tasks. We soon discovered that the issues were more a function of conflicting protocols and competing agendas. Resolving these issues soon became our approved and primary area of emphasis.
Lean Solutions: Upon learning the true nature of the difficulties in attempting to meet the rigorous demands of the maintenance department, we discovered a desire among the majority of department members to improve and be proactive in their efforts. We began a simple but powerful process of “asking why?” This tool, (Ask Why 5 Times), is a lean manufacturing method that helps facilitators find root causes of presented problems. Soon we learned that there was no existing protocol that allowed for improvements to happen in a streamlined manner, nor the framework to accomplish the improvements in a reasonable amount of time. This became our primary task. Working with union and management leadership, we created and implemented an agreed upon protocol for implementing improvements.
Impact/Results: Collaboration between union and management leadership and maintenance staff allowed for the creation of a system that generated new and lasting improvements throughout the company. This protocol was adopted throughout many of the facilities and incorporated into job responsibilities. Unfortunately, this once great company was in the final stages of bankruptcy when aggressive improvement efforts were made through many and various sources and, unfortunately, has yet to recover. However, their strong and visionary leadership will eventually win the day!
Problems: Issues with long lead times, batches of product (in lots,) backed up waiting for final inspection, customers complaining about poor service, people working overtime to just get the product released, poor flow, large amount of WIP inventory, and staffing problems.
Lean Solutions: TPS was hired to co-design and co-facilitate a major 5-day kaizen event using the lean tools of: Standard Work, One-Piece Flow, In-Process Kanbans, FIFO Lanes (for incoming lots), and Visual Controls. The Kaizen Event team was trained on Monday, worked Tuesday – Thursday to implement all of the changes. On Friday the team Measured Results and Standardized the changes. The team also gave a presentation about the results they achieved at the end of the day Friday.
Impact/Results: Success! Lead time was reduced from 19 hours to 3 hours, WIP Inventory went from 21 lots to just 1 lot, Throughput increased from 6 lots per shift to 18 lots per shift (with no increase in manpower), Visual Controls were installed to enable the Final Device Inspection team to stay on track with their schedule…a “Day-By-Hour” board being prominent, Quality of Work life (QWL) as measured by a survey of employee satisfaction increased, and Customer Satisfaction (measured by quality and on-time delivery) increased. The General Manager and the entire management team are VERY pleased with the results. 7 more Major Kaizen Events are planned for 2009 and 2010.
We helped these and many other clients achieve fantastic improvements in their operations. We put a great deal of effort into training and obtaining commitments from senior management and all other staff to continue the improvement process long after we are no longer serving the clients on a regular basis.
Sometimes, regrettably, a certain amount of back-sliding or regressing takes place when our constant influence is reduced. Generally, this is a temporary phenomenon and the leadership from trained facilitators we leave behind continue where we left off, reaching even greater heights. We do all in our power to ensure a successful and on-going Lean implementation and improvement program and recognize that there is no substitute for committed, trained, and visionary leadership and staff.
Case Studies/Results in the Following Industries:
- Bags and Package Printing
- Electrical Assembly
- Mechanical Assembly
- Food and Beverages
- Electric Motors
- Mail Order Processing
- Extruded Metals
- Extruded Plastics
- Circuit Boards
- Personalized Products
- Injection Molding
- Mail Order
- Medical Equipment
- Aluminum Finishing
- Electrical components
- Industrial Fuses
- Stainless Steel