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Lean Efforts Capture the Shingo

By Brian J. Hogan Editor, SME Media

Worker involvement and assistance from outside enhance productivity and reduce waste at Hearth & Home Technologies

A subsidiary of HNI Corp. (Mustacine, IA), the second-largest manufacturer of office furniture in North America, Hearth & Home Technologies (HHT; Mt. Pleasant, IA) manufactures sheetmetal fireplaces (both wood and gas-burning), vent pipe, and fireplace accessories. The company has four manufacturing facilities. Its Mount Pleasant plant occupied 110,000 ft2 (10,219 m2) when it opened in 1964, and has grown into a 280,000 ft2 (26,000 m2) operation today.

Thirty minutes of sheet metal blanks are positioned on lightweight rolling carts ready for use at Hearth and Home Technologies.

About 200 fireplace SKUs (Stock Keeping Units) and more than 700 vent pipe and accessory SKUs are made at Mt. Pleasant. In a typical day, the plant produces 1200–1450 fireplace units and 10,000–20,000 vent pipe and accessory products. HHT makes the famous Heatilator line, which leads the market for factory-built fireplace systems in the US. Earlier this year, HHT was among US manufacturers awarded the Shingo Prize for Excellence in Manufacturing, which is often referred to as the Nobel Prize of Manufacturing.

The company has set out to organize its operations around the idea of Rapid Continuous Improvement (RCI). Today, RCI processes are ingrained in the culture of HHT.

Rob Hunt, RCI/flow manager at HHT, says he was hired off the street in 1988, and became an assembler. He has risen through the ranks, and achieved his present position about two years ago.

When he arrived at the company, he had never heard of Lean, and the company looked as though it was in the same situation. “We had lots of inventory. Baskets and baskets of parts stacked to the ceiling, lots of racks of WIP. We had a three-week lead time, which we thought was pretty aggressive back then. But the three-week lead time generated a lot of this inventory, because you had to order your parts for three weeks into the future, and always make adjustments back and forth. It was basically a Material Requirements Planning (MRP) system. And that was one of the things we took an axe to in the early ’90s. We went to the kanban system, where we could control our inventory a little better,” says Hunt.

At the beginning of HHT’s lean journey, according to Hunt, things were a bit rough. George Koenigsaecker, one of the leading experts on lean implementation in the US and now president of Lean Investments LLC (Muscatine, IA), led a group of consultants into the plant, and reviewed the production system, starting with a high-volume fireplace line. The consultants were blunt, and ruffled feathers among employees. But the commitment of leaders, such as Stan Askren, chairman, president, and CEO of HNI Corp., carried the project forward. Askren emphasizes the need to continue to press ahead in the lean effort, and the absolute requirement for leadership to go where the action is, and gain personal experience with the work on the floor. He points out that going lean is not something easily accomplished.

“There are a lot of people out there who think it’s all pretty simple, but it’s not,” Askren states. “It’s very logical, and it makes a lot of sense. But the application requires the personal application of your time, your initiative, and your mind to the process. Don’t try to over-analyze, don’t try to figure everything out before you start. Just go do it. Push forward, set objectives, get as many people as you can involved, then—finally—commit resources to it. Trust me, you get a return on those resources.”

“That level of leadership is just relentless,” says Hunt. “They are not going to give up on it [lean]. They believed in it, stuck behind it, and drove it through.”

Key to the acceptance of lean at HHT, says Hunt, was that no member (at HHT employees are called members) lost a job because of lean. “We absolutely never allowed anyone to lose their job,” Hunt insists. “If we had an RCI event that resulted in less members being needed to perform the task, we would redeploy to another area that had an opening.”

HHT is primarily a sheetmetal forming house. In the days before lean, the company culture said that more was better. So long as a place could be found to store parts, the fabrication department would make it. Separate rework lines were organized to repair parts damaged during the production process. There was no attempt to match output to the needs of the downstream processes.

In lean implementation work, the early, easy successes are commonly referred to as low-hanging fruit. This term usually refers to elimination of obvious waste in the production process. “Definitely, in the first two or three years, the fruit wasn’t just low-hanging; it was rotting on the ground. You could scoop it up with a shovel,” says Hunt. The company proceeded to move forward with basic lean tools, and achieved results quickly. “I think the first step was just establishing takt time,” Hunt remarks. “We just said we need 500 a day, and ‘get her done.’ So the first step was to establish takt time, and base standard work on that. It was quite a cultural change.”

HHT is organized in a focus factory management system, where each Focus Factory Manager is responsible for a business unit. This manager controls the business unit’s operations, including budgeting, capital expenditures, expense control, engineering, and member (employee) hiring and evaluation.

Focus Factory Manager Rod Cox, who has spent 20 years with the company, manages all of the gas assembly lines. “When I started here, we had one main assembly line. It stretched from one end of the building to the other. All our main fabrication equipment was in a different department. We had a master production scheduler who was looking at history and forecasts to try to figure out what we’re going to build three weeks ahead of the build. Inevitably we had tons of parts, but never the right part.”

Mike Walker, a team leader for the fabrication and powder coat groups in the Mt. Pleasant plant, says that moving equipment around was an initial step in becoming more lean. “We started moving some of the machinery out of fab into the end user, so it was where they needed it. We created a good flow from raw material to finished goods. We had nice straight aisles. Now, you can see from one end of the plant to the other on the main aisles. There is more of an interstate system versus an old gravel road.”

Comparing the situation before and after the beginning of HHT’s lean journey, Rob Hunt points to the company’s success in getting away from MRP, and going to a different type of ordering system. “When I first started working here, we had a three-week lead time, and we still only got it right about 80–85% of the time. Today, if 80% of our kanban inventory levels are one or two-day quantities, then some of our lower-volume product might run 2–5 day tickets. Our worst case scenario is a five-day run quantity, and that is just a very small number of our parts,” he says.

Hunt observes that the kanban system at HHT is a bit different from that used at some other companies. “Some companies I know of run a kanban from raw start to finish good, and we do not do it that way. We basically run our kanbans from raw to the next operation, then we pull from that operation in sequence. We run a kanban-to-kanban store, then we pull from that kanban store the parts we need for that day’s run, or that hour.” He points out that the finished good inventory at HHT is a bit unusual. “You might not call it inventory–you might call it inventory waiting in queue. Every piece of inventory we have in our warehouse is a finished good, and already has a sales order attached to it.”

One significant advantage of this system is that HHT can maintain a lower finished good inventory. Hunt points out that inventory increases in cost (or value) as it moves through the production process. Each production step increases the company’s investment in the workpiece. Five pieces in the fabrication area might be worth $5 apiece, but after processing the cost/value of each piece increases significantly. To maintain a good inventory number and keep inventory dollars down, if HHT is going to store a workpiece it will be stored when the investment in the part is lowest. “We store it [inventory] right beside the machines that, by design, are not one-piece-flow machines, like coil-fed presses and automatic machines,” says Hunt.

Nothing is taken for granted on the production floor these days. “We run our changeovers and setups with a NASCAR pit crew mentality,” Hunt states. “We externalize as much activity as possible by prestaging dies and coils; we unband the coils and do as much work as possible while the press is operating. Many of our dies have a worm drive, and to change the die, you just loosen it up and it splits in half. Changeovers from one part number to another require less than one minute. We have downtime clocks on all of our coil-fed presses. We monitor every press, and every last part.”

In conformity to the idea of visible operations, a running LCD clock above each workstation allows the manager of the area to look down the row and see what’s going on. A visual control board also helps in scheduling machine capacity. As for the kanban card, it’s more than just a trigger. It also carries run-time information, changeover information, and the length of the run.

Member involvement on Kaizen teams ensures that carts and racks are prepared exactly as they need to be for each workcell application.

Twice a day 7000-lb (3178-kg) coils arrive from Chicago. There are about 10 coil-fed presses on the floor, and they average a 9.7-min setup per press. “We’re challenged to get down to three minutes,” says Hunt. “We’ll see how that goes. It’s an aggressive goal for sure.”

Rod Cox observes that before the days of lean, “When we designed the die, we centered the die’s function around the part. We ignored everything else about the setup. Then we asked: ‘What can we do to make this setup repeatable, and use consistent techniques or measurements to set it up.” Initially, there were no common clamping points, it all depended on die size. No thought was put into the setup. To overcome all that, HHT members standardized all die shut heights, so every die has a 17″ (432-mm) opening when it’s closed. “We plated all the dies so we had common alignment points. Once we had those common points,” says Cox, “we could develop common clamping points. We started making our dies intelligent, to help us recognize when they are producing a bad part. For example, on some dies we measure whether a break is correct. If it isn’t, it stops the press. Then we started prestaging. Before, we waited until one part was done. In today’s world it’s prestaged, so we prepare for the setup.”

In the months since the Shingo Prize committee visited Mt. Pleasant, the plant’s lean journey has continued. Today, over half of the parts made by the operation are produced and placed into 30-minute containers that are carried directly to the point of use. “The kanban ticket comes up and says to run part number 12345,” says Hunt. “I bring up my store right to the machine, and it’s broken into 30-min quantities. Then they take the containers back to the parking spot out in the store. Most of our small parts are done that way now, as part of our forklift elimination initiative. The goal is zero to forklift.”

What advice would HHT offer other companies as they begin their own lean effort? Mike Walker says, focus on your employees. “It’s so important to involve everyone in the organization in this process, all the way from the general manager down to the production operators. When we first got into lean, or the RCI way of always trying to improve, we thought there was an end someplace. ‘We’ll improve everything and then we won’t have to be on the RCI teams, and we won’t have to work concentrated hours during the week to try to make things better.’ We quickly figured out you never get there. It’s something you’ll always be doing if you want to stay ahead of the competition, and constantly give your customers what they need. You just have to keep changing and improving.

This article was first published in the November 2007 edition of Manufacturing Engineering magazine.

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