What happens when a manufacturer goes lean?
For Jim Calhoun, General Manager at Walton Sign, going lean means more profit. “We cut $2 million in costs out of my factory in the last three years on a $30 million top line operation,” said Calhoun.
The smiles and energy were palpable as members of the San Antonio Manufacturers Association (SAMA) talked about their successes and challenges in going lean.
Bob Buckley saw the production of pens at Lighthouse for the Blind jumping from 6,000 a day with 16 workers to 9,000 a day with nine, and backorders dropping from $80,000 to zero. “We have one hundred percent on time delivery on our writing instruments and we have no backorders.” he said.
For Mike McIver, Pressure Systems International’s on time deliveries went up by 27 percent. “We have not increased the price on our products in six years because we’ve been able to maintain our margins,” he said.
Mark Niederauer said lead time at EO2, a medical device manufacturer, decreased from six weeks to three weeks, and production went way up. “We went from 20,000 implants per year to 50,000 implants per year – more than double,” he said.
Is it by coincidence or by design that all four companies have experienced profit and/or production growth recently?
For Jim Caldwell of the Southwest Research Institute and Senior Consultant for TMAC, it doesn’t matter whether it’s called Kaizen, Six Sigma, 5-S, Total Productive Maintenance, Error Proofing, self-empowered teams, cross training, or visual process control. Lean manufacturing is all about improving processes and reducing waste, finding how to be more productive in less time, and improving reliability by keeping rejects low. Caldwell has worked with all four companies and the learning starts with Legos.
Learning Lean Starts with Legos
Caldwell often brings Legos when he consults a company, and uses them to create an airplane assembly situation. Workers in the simulation first build airplanes using traditional manufacturing methods. Then, the workers start again with planes built using a team-based approach.
“It accomplishes two things,” Caldwell said. “The first is to get them to participate, and second, to train the management that your folks have more of the solution than you do.” If employees can see the possibilities with Legos, Caldwell asks if the same can be applied to their operation.
“When you do this in Legos, you start with mass production and you have terrible failure rates and rejects,” he said. “In the real world, you also have somebody calling in with a change order. In one-piece flow, that’s not a problem. Now you get speed, predictability, dependability, and accuracy.”
It also yields dividends in terms of profitability and productivity. McIver said his company, PSI, went from producing 120 control boxes a day to 196 – after only one session with lean techniques. The number of workers stayed the same.
That Change Thing
Companies that move to a system of lean manufacturing often run into resistance from employees who worry about change. Getting employees to buy in to the changes that lean manufacturing entails will require some time.
“Three to six months is what it takes to begin changing minds and get acceptance by everyone,” said Niederauer.
Even then, “There’s always a ‘Susie,’” said Caldwell. Susie was the employee who told him that lean manufacturing wouldn’t work.
But lean manufacturing is not about changing culture, Caldwell said, it’s about changing processes. Once Susie understood that, she was on board. It took only a week. But not everyone will come around.
“Sometimes somebody won’t change,” Calhoun said. “So to change people, you have to change people.”
Buckley said it’s important to involve employees in the changes. “You have to get that team going on the line by having them share ownership and having the team be part of the solution,” he said. “That’s what’s going to sustain the results. It’s how you do it that will determine whether the results will sustain for the long term.”
Niederauer said now that lean is in place at EO2, the company puts on annual events for its employees. “It gives them ownership and they’re not being told what to do, so everybody is buying into what the company is doing,” he said.
What the company is doing when it adopts a lean approach is changing its processes. The result is elimination of waste – anything that adds cost.
“For us, it’s the minimization of waste,” said Buckley, “be that inventory, handling, queue time or anything that adds cost.”
McIver said his company started lean to boost capacity. “Most people think you have to add more people and more lines,” he said. “We had to get rid of the waste and add speed. For us, lean is about throughput.”
In fact, lean manufacturing’s goal is the elimination of waste. If something is not essential to the process, it’s out. Lean targets defects, overproduction, unnecessary motion, waiting, underutilization of people, and other problem areas.
One Piece Flow
“Lean manufacturing is about eliminating all distractions that keep you from adding value to your process from a customer perspective,” Caldwell said, and to do that, he introduces “one-piece flow” to the workplace. That means, said McIver, that the time a part is touched is reduced.
McIver used an example of making part “x” in batches of 40. “If 40 x’s are moved to the next operator all at the same time, he might discover defects in 20. Those bad parts then go back to the first operator to be fixed, slowing down the process.” In one-piece flow, tx moves to the next operator, who performs his task and moves it on to the next operator. The time spent dealing with defects is substantially reduced and no operators are standing around waiting for x’s to perform their operation. The parts flow one at a time without defects in a steady stream of workflow.
Safety & Lean
While lean improves processes, efficiency, and the bottom line, it also has another benefit: safety.
“Lean manufacturing is about eliminating all distractions that keep you from adding value to your process from a customer perspective,” Caldwell said. “It is totally related to safety because anything you do that’s extra gives you an opportunity for an unsafe workplace.”
Niederauer said a lean program can’t exist without a safety program. “You can’t have an expectation that you have 100 percent quality with no safety program – it just doesn’t work,” he said.
Calhoun said his supervisors are all 10-hour OSHA certified, and he has a safety consultant in three times a week. “With all of that, I still worry because at the end of the day, it’s the employer’s responsibility,” he said.
Buckley said at Lighthouse for the Blind, the most significant result of lean is a neat working environment.
“The blind can walk around our plant, just like a sighted person, but when something is out of place, that leads to slips, trips and falls,” he said. “Lean eliminates the clutter and we can get 287 people out of our building in 2:37 because there’s no clutter.”
Ken Lauber of Texas Mutual said lean manufacturing and safety go hand in hand. “Lean environments typically lead to safer environments, and safer environments typically lead to happier employees and fewer injuries,” he said.
Calhoun said the number of reportable incidents at his company went from 18 to four.
But sometimes, employees might be injured and not file claims. Caldwell said that can be changed, if the company has a culture where there’s no retribution for a loss.
“A minor injury can exacerbate in to a more significant injury, so you want people to be responsible and report them,” he said, “and that comes down to the management culture supporting the safety program.”
“When employees are engaged in the process of lean manufacturing, they know the job better than anybody, and they can identify the unsafe procedures,” said Woody Hill.
Toes In the Water First
Ultimately, moving to lean doesn’t have to be all or nothing.
“It’s a process and it fits better with certain types of manufacturing,” Calhoun said. “I pick the best of all of the worlds of lean and have learned you can implement lean in stages and in micro doses within departments that might not apply to the factory as a whole.”
“It’s about engaging your people through building processes,” Caldwell said. “It’s not about getting it perfect. We say we’d rather get 70 percent there, and then figure out the rest later.”