How lean is your operation, and what steps must you take to sustain lean on the floor?
Lean Enterprise Training
In the journey to become a world-class manufacturer, there are many tools to utilize, many techniques to apply, many terminologies to learn.
Please take time to answer each of the following ten questions. If you find a term unfamiliar, or if you have difficulty answering a particular question, it's possible that difficulty can lead to an opportunity to educate yourself and your team about these terms, tools, and techniques.
After posing the questions I will define each term, and explain why each technique is critical when striving to implement a lean transformation.
How many distinct value streams operate within your organization?
When companies first start up, they probably have a very small number of products. As the company grows, the growth leads to complexity. World-class companies are discovering the value of simplifying by dividing the organization into smaller units called value streams. Doing so permits the team to explore improvement possibilities without being encumbered by the complex nature of the entire enterprise. It is not uncommon to see 12–15 distinct value streams (some of which may be processed through the same machines or processes) within a company.
What percentage of your value streams have been value stream mapped?
A value stream map is a visual representation of the processes required to produce a product or service. Because of the compounding effect of complexity caused by co-mingling multiple value streams, it's nearly impossible to value-stream map your entire company on one document. Step one is to identify the number of distinct value streams, and then map them individually. Later you can "roll-up" the data into one document, if that's necessary for overall plant capacity planning, loading, and line balancing, but separating them at the value-stream mapping process is critical.
What is the takt time for your primary value stream?
Takt time is the manufacturing rhythm. Just as the heartbeat provides a flow of blood in living creatures, takt time is meant to provide a flow of product through a company's production processes. If one process produces more than the next operation can absorb, then problems occur. When everyone works to the same rhythm, that behavior reduces inventory, waiting, motion, transportation, and all the other forms of waste. Takt time is calculated by dividing available time by demand. For example: a window-manufacturing company produces two kinds of windows on two manufacturing lines; single-pane picture windows and two-pane sliding windows. Let's say they work an 8-hr day (480 min available time) and they sell an average of 20 sliders per day and 30 picture windows per day. Then the single-pane window line would calculate their takt time as: 480/30 = 16 . Their takt time is 16 min/window. The slider team would need to produce a completed window every 24 min (480/20). Assume that both teams share the glass-cutting department. Because this department is a shared resource, it will have to produce at its own takt time. Because sliding-pane windows require two individual pieces of glass, the demand for glass is actually 70 per day. So their takt time might be expressed this way: 480/70 = 6.8 min.
What is the value-added ratio for your primary value stream?
Value-added ratio is a fairly new concept to most people; it provides an indicator (a metric) for companies seeking to become lean. A ratio is expressed this way; 1:100 or 1:20. In this case, we are interested in finding the difference or ratio between value-added time and non-value-added time. Value added is defined as something the customer is willing to pay you to do (e.g.: weld or paint). Non-value-added time consists of activities that the customer is unwilling to pay for (e.g., moving product, counting, reworking defects, etc.) The value-added ratio provides an indication of how much time is spent working on a product versus how much time it spends sitting in a rack, or in someone's in-box, or in the warehouse. A value-added ratio of 1:200 means that for every minute of value-added activities, 200 min are spent with the product sitting on a shelf, or in a bin, or box, or entangled with any other non-value-added process. World-class companies are focusing on attaining a value-added ratio of 1:10. Once your teams develop their value-stream maps, it should be easy to calculate the true value-added ratio of each value stream.
What (%) reduction in machine setup times (SMED) have you experienced?
We need to behave like an Indianapolis 500 pit crew. Toyota has taught us the value of spending the minimum time in the "pits" between production runs. Our machines are like race cars, and if we approach our changeover like the pit crew does, we will find standardized ways of doing things to reduce the downtime associated with setup. Single Minute Exchange of Dies (SMED) clearly defines Toyota's method and goal of outpacing the competition. Recent developments in the automotive industry prove that fast setup is no longer optional. In more than 250 setup reduction projects, we have found that a 50% reduction in machine downtime is nearly always possible. While it's not a typical result, we have data showing that some teams have recognized reductions of as much as 92% on the first try.
To what degree has the 5S program been implemented in your plant?
The 5S program is one of the most visual and morale-boosting techniques in which your teams can participate. Workplace organization seems like common sense, but the 5S disciplines take it to a higher plateau. By first "Sorting" out what you need and do not need, teams eliminate items that prevent flow of material or information. Next "Straightening" up what they do need ensures that everything has a place, and that it is in its place. "Shine" has to do with the operator taking an active role in inspecting the machine through cleaning. This "S" makes the source of contamination easy to identify, because the machine is cleaned all the time. "Standardization" builds the techniques of Sorting, Straightening, and Shining into the work day. No more spring-cleaning events, or end-of-the-month cleanup parties. The work area is cleaned throughout the day, every day; it is part of the standard work. "Sustain" is the hardest of the 5S's; new habits are easy to break. For a while, there may have to be an audit process until the disciplines of 5S become part of the organizational DNA.
What percentage of your facility is in cellular versus functional layout?
No one sets out to develop wasteful manufacturing processes, it's an evolutionary development. When mom-andpop shops first start out, they arrange the few machines they have into a small cell, each machine being positioned in the next logical step in the process. As new machines are added, they are often grouped or arranged by function (i.e., shears get grouped together with other shears, punching machines get grouped together with other punches). Over time, departmental (functional) layout results in lots of transportation between departments, layers of departmental supervision, departmental inventories and departmental barriers, all manifesting themselves in wasteful and time-consuming job and material tracking, along with countless other non-value-added activities. World-class companies are working hard to restore the mom-and-pop shop feel of cellular layouts within the larger organization, simplifying the layout so that each value stream can produce with the least number of departmental handoffs. Shared resources create challenges to this objective, but creative scheduling and hybrid takt times can net significant gains.
What is your current DPMO (six sigma metric)?
Another indicator of performance (in this case quality performance) is the DPMO or Defects Per Million Opportunities metric. If your customer is not currently asking you for this dimension, get ready. They will probably begin seeking this indicator of your process capabilities soon. This six sigma technique does not mean that your team must become statisticians or mathematicians. The DPMO indicator is simply a way to magnify the quality of your output so that everyone has a common language. After examining water under a microscope, a water-treatment technician might refer to a glass of drinking water as having a mercury contamination of 3.4 parts per million. That is a lot different than a contamination level of 3400 parts per million. As an example, to say that a hospital has a 99.9% success rate in giving the right baby to the right parents would do little to comfort the 12 parents going home with the wrong baby each day in America. Hospitals have to get it right more often than that. Therefore many hospitals are using six sigma techniques and focusing on DPMO. By doing so, their goal is to reduce defects (mistakes) to zero, but at the very most, permitting fewer than 3.4 mistakes out of a million opportunities to make a mistake.
Are your kaizen events tied to clear and understandable business objectives?
Kaizen is a Japanese word for continuous improvement. Making sure that the events are not based on quantity, but rather on quality, steering teams will ensure that the kaizen-event charters are tied to clear and communicated objectives; objectives that are in turn tied to the organizational vision.
What percentage of your products are replenished using a kanban system?
When we go into a mini-market (like 7-11 or Circle K) there are really very few items on the shelf. The secret is the daily or weekly deliveries made by the dairy, bakery, soda, and other suppliers. How many of the items that you use in the manufacture of your products are maintained on a "pull system" or kanban replenishment program? We can learn a lot by observing other industries (i.e., restaurants, gas stations, hotels, etc.), and noticing how they manage their inventories. The goal is to have the minimum on hand while not putting your customer at risk. The calculation for determining the proper amount to stock is replenishment time divided by takt time.
Example: A glass manufacturer's supplier has a two-week lead time for raw glass. Therefore: two weeks = 80 hr working time.
80 hr = 4800 min.
If takt time is 6.8 min, then the replenishment signal must be sent anytime the inventory falls below 705 units, because:
4800/6.8 = 705.
Of course this calculation assumes that you know your takt time. Knowing your takt time also assumes that you have developed your value-stream maps, which in turn assumes that you know how many value streams you have.
World-class athletes and sports teams spend the offseason perfecting their skills and strategies for each upcoming season. We should do the same. Manufacturers in the US should take advantage of the "breather" we have in the current economic slowdown to prepare for the next wave of work that is sure to come.
It doesn't matter how good we were yesterday or last year or during the last economic boom. We have to get better everyday. Our customers have short memories of how good we were. They tend to be focused on how dependable and capable we will be tomorrow.
I hope that this short self-examination might lead you to realize that your team must continue to educate themselves if they are to be viewed as world class in the future.
This article was first published in the March 2009 edition of Manufacturing Engineering magazine.