Industry in transition

Industry in transition

in TMton by Leslie W. Flott The primary function of a company is moving raw materials to finished goods. Everything else has to support that Richard ...

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in TMton by Leslie W. Flott

The primary function of a company is moving raw materials to finished goods. Everything else has to support that Richard Fleming, Grand Rapids, Mich., quoted in “Quality Online,” March 1999

.n the 1890s skilled workers manufactured just the

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‘parts needed for the order they were building. prices were high but the costs were direct so volume sales did not result in cost reductions. This all changed in the early 1909s when Henry Ford introduced mass production. (Actually, Ford introduced “Mass Assembly.” Mass production, i.e., interchangeable parts, was the work of Eli Whitney circa 1798.) Mass production offered great benefits over craft production, but there were negative elements as well. Monotony ,of the work andl+ckofc+iWerp#hre45&@inn:~lowwor~morale, v&#&,5& l&n gave r&e to the .&&or movoxnent in ir+l&+y*Quality~bIemswene~y~ tillarge voIumes ofparts had b&n produced. Inv~~ tWyleY&wl?re~~. In t% years &Alowing~ a new manufacturmg system evolved in Japan@at incorpora@dthe best of both the mass pro&t&on and the cr@,production ~thods.~~,~$Jt~~~&&_ fa&uring? It is a. m in ,p”gress. Its victory

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ished, labor was reduced as well as the space required for inspection and rework. Finally, workers enjoyed a high degree of satisfaction in their jobs. In product engineering, multidisciplined teams were formed. Product designers and industrial engineers worked side by side in the vehicle design. Career advancement was based on the engineer’s team skills rather than on technical skills. Laborers, suppliers, and consumers were also in the process. Again, more impressive results as the total amount of hours and the total project time to develop a new product were half that of their counterparts in the U.S. Designs were easier to manuftiure and more in tune with consumer desires. Also, manufacturers organized their sgpliers in tiers and gave them performance specifications and cost parameters. This gave the supplier increased responsibility for subcomponent design, They also e&abIished fWncia4 (ties by gaining partial ownership in the supplier’s companies and encouraged the suppliers to establish ,flnancial ties among themselves. They worked with each supplier to integrate him or her into the assembly scheme so that quality issuea were resolved&d+~ento&scould be maintainod .at minimal 1eveIsthroughout the supply chain. Su#plier loyalty imprevod, and 00-t design and lower costs $I resulted f+om these effbrts. F+.lly,.distribution sy&ms’were created aimed at establishing~~li%elengrelationships not only with the dealer but ‘also with ti*e consumer. By utilizing d&+t’sales te&n@ues, cr+al&$ huge consumer database, and by being al& to deziver custom-specifled high-quality cars within 2 to 3 weeks of order, they created the Mapufacturexs Family with very high customer loyalty. Distri~tors established e&es priorities based upon upcoming production schedules in an effort to smooth out any wild swings of the market; but, since the schedules were based on trends established through the customer preferences of the database, the system was much more m&&et sensitive than the U.S. counterparts.

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One study that has been widely reported examined several important facets of production methodologies through the lens of lean manufacturing. This in-depth analysis of assembly plants from around the world provides striking confirmation of the effectiveness of lean production techniques. Some of the issues examined include the cost of quality, degree of automation, ease of manufacture, product diversity and complexity, and workforce issues. 1. Cost of quality: In the U.S., quality and productivity are often considered tradeoffs. In order to have one the other must decrease. Phil Crosby teaches that quality is free and can go hand and hand with productivity. Both ideas were found to be true. In the lean production setting both quality and productivity were generally found in harmony. 2. Automation: The study found a wide variation in the efficiency of plants with similar levels of automation, but that lean manufacture is consistently advantageous regardless of the level of automation. 3. MunufucturubiZity: Many in the U.S. believe that

the gains made by the Japanese result from superior product design, making manufacturing easier. The study found that improved designs alone would appreciably increase productivity. 4. Complexity and product variety: Some have concluded that less-complex designs and variety in product lines resulted in improved quality and productivity. This was found to be untrue on both counts. The superior products were often more sophisticated and offered more variety than inferior products. 5. Employee burden: Many experts explained the successes on the fact that a higher burden of responsibility had been placed on the assembly line worker. These gurus believe that production line workers could be made responsible for their job as well as those of the engineers, inspectors, and managers. Not only was this found to be untrue but indications are that the opposite was true. Workers who controlled more of their own destiny enjoyed higher levels of job satisfaction. Employees seem to thrive on the challenges; they feel empowered.

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offs early in the project allows many development activities to be run simultaneously with little risk of problems later in the project. When major tradeoffs are delayed, the risk of later problems forces a more one-by-one-project tactic, requiring more time to achieve.

Four elements of lean design that distinguish it from the Henry Ford mass production model have been identified. These are: 1. Leadership: The Project Leader is a very coveted and very powerful position. It is a springboard to advancement. In the U.S., the position is similar in responsibility, but to some extent with less authority due to the prevailing management practices. 2. Teamwork: Projects involve all disciplines throughout their duration, and a tremendous team unity is common. In the scenario where team members come and go as needed, they tend to lack real commitment to the project. 3. Communication: It is very important in the Lean Manufacturing Model to understand and communicate the design tradeoffs early in the process so that high-level design decisions can be made in a timely manner. In the U.S., many tradeoffi are made late in the process, usually at a cost and schedule penalty. 4. Simultaneous development: Making major trade-

The basic conclusion, thus far, is that lean production is the best way to make things that have yet been devised by man. It is more .efficient, more market sensitive, and more challenging for the worker. How the global corporation can facilitate this transition will next be discussed. In the global race for higher quality, faster delivery, and lower costs, your company won’t stand a chance against the competition if your idea of running a “lean business” extends no further than the factory floor. While lean manufacturing is a valid piece of the puzzle, true lean business thinking goes much further than that. One problem with “Going Lean” is that many people think they’re going lean when implementing only a

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couple of elements of lean, i.e., Kanbans and/or justin-time. To really go lean people need a better understanding of what lean is about. Lean is a system that incorporates everything the organization does. In that respect it’s a little like TQM. Lean is not something just for the shop floor, but for the total organization. People throughout the organization cannot do their work effectivelyunless they are part of a common effort. Everyone and everything must support that activity. Companies focus too much on little islands of improvement. They think in terms of the big picture, i.e., about how all the little pieces fit together into a whole. If they apply setup time reduction over here and process mapping over there, they believe they are implementing lean. What they’re doing is piecemeal lean. The problem is that forcing all their activities into a lean enterprise is more than most of them want to consider. Everything counts in business; how an order is taken and how its processed, purchasing practices, manufacturing method, billing, and shipping. The Lean Business Workgroup is developing a

QS-9000-linked guideline on lean business systems, tentatively scheduled for publication later this year.

Figure 1. Lean manufacturing system model.

The basic model the group has devised (see Fig. 1) breaks the typical company’s order-to-cash cycle into design, source, make, and deliver phases with a “plan” element spanning the whole process. By focusing lean-business efforts too intently on the man-

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ufacturing or “make” phase, companies ignore millions of dollars worth of waste in the other areas, according to the group. The standard concept of lean manufactming is to optimize work center productivity by eliminating nonvale-adding steps. The aim is to process only what is needed, when it is needed, against existing customer requirements on hand, and, of course, to do it right the first time. Spreading this concept across the entire organization opens the door to a potential goldmine of waste elimination in which everyone can participate. Fifty year ago, Armand Feigenbaum wrote ‘Total Quality Control.” He said that a process isn’t just machines and production lines. What we must improve is the process. Whether the task is making copies, filing, or Wing out a form, there are ways to reduce waste. MWFEM@VHEVALwmyAM

Becoming lean is in no way easy. It is easy to become overwhelmed by the shear magnitude of the potential savings. Because the possibilities are so diverse, it can

behardtoknowwheretof~.Thefirstthingyou need to know is where it is you want to go? The tools that could be used are manifold. Planning should begin with a vision or mission statement to define the final goal. Once the vision is defined, it is possible to proceed step by step to eliminate any waste or other obstacle that stands in the way. Small or incremental steps forward are not bad if they are part of the bigger vision. What is needed is a clear goal and plan to get there. The plan helps people to know when workplace organization will be implemented, when to do setup-time reduction, when to do your policy deploy ment, or when to implement Kanbans. This is by its very nature a long-term plan whose ultimate goal is to actually create a lean enterprise. Every process must be examined from start to finish. Analyze all the things that happen along the way. How many of those processes actually add value to the product? If a particular process is not adding value, why are you doing it? Examine every process for improvement or elimination.

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Once the major sources of waste have been pinpointed,’ begin using the various lean business techniques to eliminate them. Where you start doesn’t matter, start somewhere. Do not make the mistake of trying to add technology to reduce waste. Advance methodologies can make a process faster, but they don’t guarantee better efficiency. It makes no sense to shorten the manufacturing time for a product by a couple of minutes if the materials have been sitting in the plant for weeks. Keep things as simple as possible and focus on waste elimination from nonvalue-added activities. Working without a lot of extraneous steps is practicing lean. ln,moBuMwsuccess

Any organization trying to implement lean business has the unexpected problem of knowing what to do when its efforts are a success. How does one manage the time saved by reduced setup times? Is the answer to use that extra time to produce more products? Or, will the time allow a greater variety of products? If a large percent of the man-hours re-

quired to make a product is reduced, should the company lay off employees? That might save money, but it might also mean that the next effort will be met with considerable skepticism. Or can the extra manpower be used to gain more business? There are good ways and bad ways to do things. The good way is to let people know that there’s going to be a change, and then either help these ,people find jobs or increase your market share so you have more work coming in. Another difficulty in implementing lean business systems is that conventional financial systems are not structured to look at cost savings in the same way that a lean enterprise would, which means that even if you succeed, you may not be able to prove it. The key is to focus on the goals: reducing waste and producing a leaner, faster, healthier company, so you can beat out the competition and give your customers what they want. You don’t really have a choice; bs cause it’s survival of the fittest out there. One other point, if you decide that you don’t want to go to all this trouble, there is probably a competitor who will., MF

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