Introduction
During the past several years, Lean Manufacturing has received a great deal of
attention in its application to manufacturing companies. The results can be dramatic.
The savings achieved in WIP reduction, MCT reduction and other manufacturing related
metrics have been unprecedented and far outweigh those achieved by traditional
improvement methods. The Lean Manufacturing methodology is a life-changing way of
doing business that creates significant sustainable results. These new ways of thinking
have typically been so different they prevented the firm from fully implementing Lean in
the organization.
Gone are the days of building the perfect balance between all of the various points in
your manufacturing operation and building product in huge batches. Gone are the days
of not noticing product problems until there is a huge amount already built. Gone are
the days of low yield. Product quality as measured was good, but the process has led
to the build up of analysis mills for the sake of output. Lean Manufacturing implemented
as described in this article will dramatically improve all of these areas and leave your
workers as happier and more productive people. It enhances managements
understanding and control of operations, and improves the decision making process.
This summary describes the partnership that formed between the Client and the
Consultant. Together, they developed Lean Manufacturing methodologies that have in
one area reduced WIP by over $400,000,000 over a six-month period in 2001. Use of
these methodologies caused a $20,000,000 drop in WIP in one product area in 2000.
The background history of its development and a brief overview of the process are
contained in this article. Although, the actual creation and implementation of this
process took approximately one year, once developed it was fully implemented with
over 1,000 Associates and in another part of the facility in only six months. Each
subsequent implementation was on a larger scale. This dramatic change in
manufacturing methodology is helping Client meet the difficult challenges faced by hitech.
Introduction to Client
The Consultant worked with the Client in one facility from 1997 to 1998 using traditional
methods of shop floor controls in its improvement efforts and achieved significant
results from the project. In 1999, the Consultant was invited to study an area at another
facility. Based on this assessment and an agreed upon mutual approach the following
areas were concentrated upon to form the basis for a project:
Child Board
Assembly
Functional Test
Functional Test
POU
POU
Heat Chambers
POU
POU
B
B
POU
Note:
Assume 6.5 h/shift
Receiver
Assembly
Child Board
Assembly
I
B
B
B
POU
Receiver
Assembly
Functional Test
Child Board
Assembly
Functional Test
M aterial Cage
Child Board
Assembly
Receiver
Assembly
Receiver
Assembly
POU
52 Transmitters &
52 Receivers
per shift
The first cells constructed were modeled using the movement of product from station to
station in buffer sizes to prove that the concept worked and to identify potential glitches.
A W shaped cell was formed to feed output before going to the test areas. Half of the
area was converted to this cell design. Throughput of the cell was managed by using
buffers between each station. The pacing of the cell output was designed to always
meet the bottleneck capacity. The Team monitored the cells using 24-hour coverage
during the first week.
POU
POU
The areas manager, working with the group, laid down a mandate to assure
sustainability of the results. Controls were prototyped to develop a visual workplace
looking at output and quality. Great success was achieved:
2000 and the predictions for a ramp up failed to materialize. Lean however enabled
cuts in resources and still make production targets. End August of 2000, the project
ended successfully with over $20,000,000 savings for just that phase.
Storms appeared for the telecommunications business including WIP/Inventory
problems and costs. These haunted Client as projected growth rates failed to
materialize. Changes also occurred in management at this facility. A Ford Motor
Company Manager, with an extensive Lean Manufacturing background came onboard
in OLS. He would prove invaluable in supporting key managers in the engineering and
manufacturing sides of the plant. A management team looked at a Client Consultant
effort to maximize the benefits achieved to combat workflow and inventory/WIP
problems. The Consultant was invited to the facility for an analysis and strategy
session, which resulted in a combined effort to take the Lean Manufacturing
methodology to product lines in another factory at the location.
2001 Lean Manufacturing Project
By this time Client and Consultant had the Team Concepts agreed upon. A rapid
deployment of 8 Teams with approximately 90 + Team Members was developed to
format cells and define/implement buffer strategies and WIP control throughout these
product lines. This project resulted in 40 cells being implemented in six months with the
average of 2 cells per week being put into place and launched. To galvanize the teams
and drive to meet this schedule, these eight teams met weekly with the commitment to
meeting the target dates. A logistics team worked to assume incoming material
planning and processes and meshed with lean manufacturing. A key understanding
throughout this effort was that:
The OLS group formed W3 (World-Class Waste Watchers) Teams. Core members
mentoring the process were the Consultants. Teams trained by the Client-Consultant
core group are continuing to identify new opportunities, improvements and savings to
their organization. The W3 Teams have matured into a Process
Engineer/Supervisor/Manager group that meets once per week on alternate 3 rd, 1st and
2nd shifts. The accomplishments made in this time of uncertainty, declining orders,
layoffs, early retirements, factory sell-offs and reorganization of Executive Management
is extraordinary. Although Client continues to struggle its way through the high tech
telecommunications slump, it has seasoned managers who have seen the need to
establish a climate of change focusing in on improvements and key metrics.
Additional new areas of focus include Supply Chain issues and Contract Manufacturing.
Key Executives in Key Roles are continuing to focus on all of these improvement areas.
Senior Management is emphasizing these efforts and formalizing the benefits of using
lean metrics such as MCT and WIP control Client-wide. His direction and leadership
has added impetus to the key metrics, the buffer strategy, 5S and the drive to
sustainability.
The Lean Manufacturing Process An Overview
The primary tool for defining and analyzing the production area in order to determine the
bottleneck and setup of a cell is called a FACT Sheet. Pictured below it outlines the
following items:
Area A
Cell No.:
Date:
u/m:
Proc
No.
per/hour
Process Description
Current #
of
Assoc's
Buffer
Size
R/E
Engr Std
Products
Total
Assoc's
WIP
Target
Shift
R/E
Target
R/E
Estimated
Yield
Is it:
Yld or
Output
Point
Remarks
2
3
4
5
6
8
9
"Future"
Goal R/E
Using this document, the team is able to design the cell, determine the cells output or
Reasonable Expectancy (RE) and buffer sizes between each process step. The shift
RE is not meant to be an indicator that is impossible to attain but a reasonable amount
that can be expected to be achieved by the team of Associates in the cell if adequate
parts, tooling, equipment and personnel are in place. The bottleneck operation sets the
drum beat of the cell enabling management to have a better ability to know exactly
how much product can be promised to customers. All personnel operating in this
environment should have a working knowledge of this FACT Sheet so that they are
familiar with the buffer size for each of their positions and the RE of their particular cell.
When the cells are constructed and ready for operation there are several visual displays
used in the operation of the cell. These borrow heavily upon the ideals of Deming who
believed that attributes that are charted by the Associates on visual displays are more
apt to be focused upon and improved upon. The visual displays are listed below:
The Communication Board is the focal point of all communications in the cell. It is
where the cell debriefings between the off going and the on-coming shifts are held to
communicate the output, yield and issues of the shift. It is shown below:
Each of these items plays a critical role in the operation of a cell. The logbooks help the
Associates to maintain the large Tally/Communications Board, which is located at the
entrance to each cell. They capture important quality and lost time issues for action by
lead personnel. The Tally/Communication Board is a visual monitor of whether the cell
is producing at the expected rate or whether there are issues that need to be acted
upon by management. It is now easy for a manager to see whether they should take
action and where action should be taken. Associates are greatly involved by taking
charge of the amount of WIP in their area. They are now controlling the WIP in the cell
by maintaining the buffer strategies indicated on their buffer signs.
A Team effort is achieved that dramatically reduces WIP/Inventory levels and enables
managers and marketing personnel alike make promises to customers that they know
will be kept on time and in full.
Implementation Notes and Recap of Primary Thoughts
There are several important points to keep in mind when implementing a lean
methodology and creating cells. These are listed here, in no particular order of
importance and not meant to be all-inclusive, and can be discussed in greater detail by
contacting The Consultant:
Summary
This process was developed through the hard work, drive and determination of many
people at Client and in collaboration with the consultants. It is the culmination of several
years of effort and has shown the outstanding results possible by implementing a Lean
Manufacturing Methodology. Through the implementation of this process, Client has
achieved significant results including:
Dramatic WIP Reductions of 71% and greater
30000
25000
20000
$000
15000
10000
5000
0
Analysis
IOB
WIP
20
15
25
10
15.5
14
12
0
Mar 1999
Units
500
400
700
300
200
100
302
150
0
March 1999
June 1999
The telecommunications industry is still struggling but these achievements are key
steps in helping Client to make it through the tough times. The methodologies outlined
above are being used to refine and implement strategic plans to reorganize, out-source,
sell and/or relocate operations, processes and product lines. It is enabling the client to
8
focus on its latest products and disengage in commodity and legacy activities. This
restructuring is assuring client growth and successful transition to the 21 st century.
Blane P. Jarchow
blanejarchow@aol.com