February 2008 Edition

THE LAST WORD

Learning Lessons from the Big Boys

Lean manufacturing works wonders in high-volume, repetitive manufacturing environments, but it also can work in low-volume, high-mix shops.

The Wisconsin Manufacturing Extension Partnership — and similar organizations around the country — help custom manufacturers implement lean strategies.

Both high-production facilities and custom manufacturers benefit from techniques like standardizing processes, mistake-proofing orders, eliminating waste, and applying a continuous improvement philosophy.

Though products may be unique, creation processes are often similar. By identifying similar processes, custom manufacturers can leverage improvements and ramp up productivity.

As with any kind of improvement work, custom manufacturers should have a plan. What are the critical areas for improvement? How can lead times be shortened? How can work-in-process costs and space needs be controlled?

Value stream mapping — VSM — is a diagnostic tool for custom manufacturers. It reveals waste and bottlenecks. A VSM lists the activities required to manufacture from raw materials to finished parts. The trick to applying VSM is knowing what to map.

Mapping the Territory

A job shop might need to do several maps. For example, an order not requiring engineering might be mapped, but it may need a unique label provided by sales. A second map might be done of an order requiring design work, and a third map may be for a new product that needs sourcing of new parts and processes.

The maps show product commonalities. Most custom manufacturers have a pattern of repeated practices or sequences, with variation entering at the end of the process.

To determine uniformity, a process matrix identifies product families. The matrix lists products on the left side of a table and processes across the top, e.g., stamping, welding, deburring. Each product's processes are checked, and the products with similar process flows are identified as a product family.

The goal is to improve the flow of one product to improve the flow of the entire family.

Data collection is a critical function in continuous improvement. Data should be collected by both product and process. For example, observing the same tooling is used on a brake press to make different parts may suggest better ways of sequencing work.

Collecting data on the shop floor is a way to do that. Scheduling boards, Kanban signals, and similar methods show how much work is waiting at each operation. This presents the physical reality. These are ways to see whether production is on time or not, rather than tracking by computers, which hides data behind the screen.

Admin as Well as Production

Many custom manufacturers replicate the gains found on the production floor into the front office — applying lean techniques for ordering, quoting, scheduling, design and engineering, and other functions.

A VSM reveals front office information flow and highlights potential delays. It may take three weeks to get an order out the door, but until mapped, it isn't obvious production only takes four days and the rest of the time is spent in the front office.

For custom manufacturers looking for an immediate return with little investment, lean tools such as 5S/visual management can yield benefits by increasing shop floor efficiency.

The "supermarket" concept is an example. It is a system of labeled parts bins placed at strategic points where parts are needed. Parts are more easily available for production. Two rotating bins are dedicated to each part. When the first bin is emptied, parts are reordered or machined to refill it, while the content of the second bin is tapped.

Coordination Pays Off

Consider, too, capacity planning and its potential to align business functions. Capacity planning is about a common understanding of the bottlenecks throughout the organization.

For example, a sales manager has a $100,000 order. The manufacturing manager determines the order requires using an over-scheduled lathe, so he schedules the job for three weeks in the future, instead of three days. There are further delays when the finance manager knows that the customer rarely pays on time. The product is expensive so ordering is delayed for a month when there is more working capital.

Capacity planning is designed to get all business functions in sync to understand the sales, manufacturing capacity, and cash needs of the company.

Properly applied, continuous improvement tools can increase efficiency, reduce waste and lead times, and improve competitiveness. Shops should take advantage of the flexibility of these tools to tailor improvements to meet company needs and improve profits.

Jim Hensch, a 30-year veteran of manufacturing, is a consultant for WMEP, a non-profit consulting firm that helps small and midsize manufacturers become more competitive. WMEP can be contacted at 877.800.8025. To find an MEP center, visit www.mep.nist.gov.