D. R. Rice Company

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Lean Manufacturing or The Visual Factory

By John Civerolo & Don Rice

What does it take to be a successful lean manufacturing company. Successful typically means achieving amazing results like:

bulletInventory turns doubling and tripling
bulletVelocity, flexibility, and responsiveness of manufacturing increasing
bulletMassive cost reductions.

Many companies have developed an interest in becoming a lean manufacturer. As usual with most good ideas, there is plenty of smoke and sometimes it's hard to see the fire.

We will start by looking at a definition of lean manufacturing, i.e. what does it really mean. Following this, there will be detailed discussions of some of the prerequisite actions, procedures, and tools that must be used to become a successful lean manufacturing company. The next section will detail some of the obstacles other companies have run into in their quest to become lean.

What is Lean Manufacturing?

Let's start our discussion of Lean manufacturing by focusing on what happens inside the building for a typical manufacturing company for a moment. What is happening in many companies is that the amount of work or tasks that needs to get done each day is rising or in a best case scenario staying the same. But at the same time many companies are not adding more people and in many cases letting attrition reduce the head count Everyone is overwhelmed with work and frustrated that no matter how hard they work it doesn't get any better. A lot of people have set an objective of just getting through the day. If I can survive today maybe tomorrow will be better. . So if the current business processes require 200,000 tasks each day to survive and we can't hire more people even though we're overloaded with work what can we do? Lean manufacturing concepts provides an excellent approach for resolving this dilemma. One of the major focuses and results of lean manufacturing is task reduction. It takes less work to get the job done each day. This should be one of the major sanity checks for implementing lean practices, do the change reduce tasks. If not, then we had better rethink this process until we can take tasks out.

Let's work through a simple example. In a typical manufacturing process you have many steps. Typically these include release, pick, move, queue, setup/change over, run/process and move. These steps can be repeated many times. Of these seven steps only the run/process step adds value. So all of the rest of the steps are candidates for elimination or reduction. If you are able to make a 20% reduction in these seven steps you have reduced the total number of tasks required to run the business each day. Additionally, from this example, two of the other significant benefits of lean manufacturing become apparent. The total length of the process is shorter, therefore the cycle time is less. And because the cycle time is less the process is more flexible or responsive to changes.

Many companies set an ideal objective of eliminating all non-value adding steps from all manufacturing processes. This is an admirable goal and is well worth shooting for. But at the same time, making a twenty percent reduction in non-value adding activities provides tremendous results. So there is no need to wait until everything is perfect before you start work. Many improvements can be started immediately and results seen quickly.

Why haven't companies embrace lean manufacturing more completely. In many cases it's because our traditional approaches for solving problems in manufacturing has resulted in complex problem definitions. And everyone knows that if you have a complex problem you must have a complex solution. Obviously, this over simplifies the issue but it does allow us to visualize some of the difficulties involved in becoming a lean manufacturing company. It's not uncommon to see complex solutions being thrust at us everyday. There are new acronyms and new software programs that will solve virtually every problem that is seen in manufacturing today. Lean manufacturing wants an analysis done of every solution before it is implemented. It is based on the C4 theory. The four C's are Complexity, Confusion, Chaos, Cost. Complexity helps to create Confusion, Confusion supports Chaos, Chaos increases Costs. The contrast to that is the S4 theory. The four S's are Simplify, Streamline, Synchronize and Saving. Simplifying a process allows the choice of streamlining and synchronizing activities. The combination of these three results in task reduction and savings.

Consider an example from my early days of working on a farm. When the hay baler broke in the middle of the hay field, my uncle didn't stop work, get together a cross functional group of local farmers and brainstorm potential solutions. He started working on fixing the problem. What always seemed to astound me as a 12 year old was that he could fix most of the problems just using the tools on the tool box he carried on the tractor. Bob Stahl, one of our senior partners explained this as an example of  "Complex things are studies, simple things works."

Prerequisites for Lean Manufacturing     (BEFORE)

There are two sets of activities to lean manufacturing, what you have to do to get started and what you have to do to insure long term results. The first set is the following list.

bulletAll material available and worry free
bulletsetups/changeovers reduced
bulletvisual controls in place
bulletKanban example
bulletSquares on floor, color of the day, open pegs, etc.
bulletStop production
bulletVisual Controls
bulletVisual Performance Measurements
bulletCellular Layout Vs. Functional layout
bulletBOM structure is shallow
bulletreduced transactions & paperwork
bulletvalid and realistic schedules
bulletHigh Quality (Data & Product
bulletPOU inventory
bulletPOU inventory not in planning system
bulletProblem solving skills & tools
bulletFind & fix root causes
bulletCorrective action teams
bulletNames & dates
bulletvalid and realistic schedules
bulletcross trained workers
bulletqueue controlled
bulletWIP reduced

Overlooked Obstacles (AFTER)

The second set of activities are frequently overlooked or ignored. Sometimes these are called what you must do after you start working in a lean manufacturing environment. Other people call these the "rocks"  hidden by inventory.

bulletNo foundation in place
bulletPlan vs. Execute
bulletBad inventory data
bulletOver complex bills of material
bulletInaccurate bills of materials
bulletBad customer order promise dates
bulletBad internal schedule dates
bulletPoor capacity management
bulletDon't follow up on violations
bulletVisible controls will identify symptoms of problems
bulletRoot causes must be addressed
bulletMaterial shortages
bulletLack of cross training
bulletPoor scheduling of maintenance
bulletMonth end push
bulletProblem solving skills not used
bulletNo link to S&OP and Master Scheduling
bulletDon't record ALL violations
bulletFlip chart
bulletVideo camera or digital camera
bulletOwnership of WIP inventory by manufacturing
bulletConflicts with traditional performance measurements
bulletThinking worker vs. Labor efficiency. & utilization
bulletTrust in temporarily stopping production
bulletMIND SET

Does it really work?

An example of the results from one company look like this. The original process has 13 steps of which only one was value adding. There was 13 pieces of paperwork needed and 7 moves required. After the process was changed and simplified there was 6 steps remaining, 3 pieces of paperwork and 4 moves. The net reduction was 7 process steps, 10 pieces of paper and 3 moves. Will this process require fewer tasks? Will the process be faster? Will it be more flexible? The answer to all of these is a strong YES!

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D. R. Rice Company

9326 Lake Shore Drive Brentwood, TN 37027 615-221-2196 riceco@riceco.us