Tom Barrett says he sees a common struggle with complacency in this industry that manifests itself this way: A company thinks it’s going to take 100 hours to build out a truck, but it takes 120.
He says there’s a way to affect cost control, safety, quality, productivity, profitability, product consistency, employee engagement, employee retention, employee training, overall business valuation, customer retention, and late deliveries.
It’s lean manufacturing.
In his presentation, “Finding Your Lost Labor is Not Like Looking for a Needle in a Haystack,” the vice president of Lean Partners in Waconia, Minnesota, told the story of his introduction to lean.
It came in the 1990s when Barrett was working for a large, well-known hydraulics company. The plant manager approached the management team and said money had been allocated to bring someone in to talk about continuous flow manufacturing, but someone was needed to lead it.
“Pick me,” said Barrett, who was a young industrial engineer and recent college graduate.
“We brought this gentleman in and we tore apart this hydraulic motor line that was a cash cow and hadn’t changed one bit in 50 years,” he said. “It was a well-running operation, but we looked at it and said, ‘We can do this better.’ We started pulling guys in that had worked on the line for 20 to 30 years and had been told ‘no’ numerous times, and they had just given up on contributing ideas. Well, the ideas flowed in.
“So on Wednesday morning, the plant manager who set this up comes out and says, ‘What’s going on here, Tom?’ I said, ‘This is the continuous flow manufacturing stuff you wanted me to do.’ He said, ‘I didn’t mean we were actually going to do something with it. I just wanted the training.’
“So my bubble was deflated, as were these seasoned employees. It took the wind completely out of the sails. We finished it, but didn’t get nearly the gains out of it that we could. The issue was the thinking of the leader. Some people see lean or any sort continuous improvement as tools or a project. They see it as something I do—dip my toe into the water and see if I like it. If that’s the thinking in your head, don’t even start. You’ll do more harm to your organization than not starting at all. This is not something where you just kind of do some training and expect to get miraculous results. This is something that takes a very strong commitment to.”
Barrett said that while it’s important to focus on the measurable results, it’s just as important to focus on the process of engaging the employees.
“This is something you can’t force,” he said.
What is the lead time to deliver your product or service?
“We’ve yet to find a client whose customers say, ‘Take a lot longer to deliver your product or service,’ ” he said. “Everybody wants things sooner for a multitude of reasons.
We know that from request to delivery on pretty much any process, there is a ton of opportunity to improve.”
He said valued-added things are what is done to transform materials or services into something a customer wants. Non-value-added is everything else.
“We want to compress the lead time without making people work harder or faster,” he said. “Typically, less than 10% of a time that we own a product or service is spent adding value. What do we do about it? We eliminate the waste so we use our resources to do the work that our customer pays us for.”
He said that Japanese industrial engineer Shigeo Shingo of Toyota—considered the world’s leading expert on the manufacturing process before his death in 1990—took these non-valued-added activities and broke them into Seven Forms of Waste:
“If we reorder the sequence of operations, we can get rid of some of the waiting time. Waiting is one form of waste. It happens any time we have a person waiting for a machine to finish what it’s doing, or a person waiting for somebody else, or waiting for information. Waiting for parts is a common one. What could I be doing that’s value-added during that time?”
“It’s communication from customer to sales person, sales person to the shop, maybe shop employee to shop employee. Then you probably have some parts defects, coming both from the vendor and things we fabbed-up ourselves.
“Movement of your body. Typically we see this in truck-fitting shops. It’s walking, looking for parts and tools, going to the yard and trying to spot a dump bed.”
“Where we are physically moving parts, whether via a pallet jack, a cart, or a hoist.”
“We produce more than a customer wants or we produce it much sooner than a customer wants. In custom shops, there’s less overproduction than we see in a manufacturing company. But it’s common in your facilities. We see there might be a long lead time to get something from a supplier. We make up brackets two to three months ahead of those other parts coming in. Or we get it in from a supplier three months ahead of time and it’s buried under snow. By the time we find it, it’s harder to find and has been moved around and might have some damage to it.”
“That’s when we have to do more or work harder to achieve the desired result.”
“Inventory waste comes from having too much inventory. Anybody ever have some stuff sitting around your shop that you purchased but can’t use? It’s obsolete. Too much inventory can go back. And the more inventory you have, the harder it is to organize and find what you’re looking for. Too little inventory can be a problem as well because it leads to waiting or expediting costs.”
He said most of these forms of waste are in every process.
“A very simple thing you need to do takes 20 minutes,” he said. “We walk through and take the first 20 people we encounter and look at what they’re doing and determine whether they’re doing value-added or non-value-added work. Value might be that I’m cutting, welding, assembling. Traditionally, we find 15%, or a maximum of 30%. Does that mean the other people are just hanging out, not working? No they’re looking for things, waiting for things. If you can train your people to see this waste, if they can see it, typically that’s more than half the battle. They’ll come up with ways to solve it. They probably have come up with ways in their head, but they just haven’t shared it with you.”
One of the tools of lean is 5S, and the elements need to be followed in this order.
“Get rid of things you don’t need and only keep those you do need. It might be tons of steel hauled out—stuff that’s accumulated over the last 10, 15 years. Get rid of it.
“Clean and make sure the facility and work areas are clean. Give things a fresh coat of paint, fix machines and tools, replace broken machines. It’s easy to disregard something that looks like it’s being disregarded. It’s a bit of a snowballing thing. People follow suit and it gets worse and worse. That leads to thinking in the organization that nobody cares. That leads to potentially lost productivity and safety and quality issues. You are trying to attract new employees. When you take them on a tour, what message do you want to send? Skilled service technicians have a lot of options for employment.”
• Set in order.
“Now you need to find a place for everything and put it there. It’s tools. Where does the garbage can go? Where do the dustpan and broom go? Most people think that’s all there is to 5S. It will be a constant battle. Somebody will let it slip and somebody else will let it slip. And it will fall back to where used to be.”
• Standardize. “Standardize the best practices in the work area.”
“This is about expectations, habits, and accountability. We need a way to set these expectations and measure progress against them and then have calibration discussions. Why didn’t you put this away? Why didn’t you clean this up?”
He said the goal is to increase business 15% to 20% per year, and do it with no additional labor costs, no additional space, and typically no new equipment.
“If you did that two or three years in a row, typically that will triple your bottom line,” he said. “Ultimately, what lean yields in organizations is dramatically improved customer service and significant increases in capacity. The desire of most organizations with lean is to grow services/revenue annually without adding additional resources, thus improving the bottom line.”
For lean in small, custom operations, he provided these suggestions:
• Start with getting alignment on issues and opportunities. Why do we want to do anything different?
• Focus heavily on engaging the team.
• Introduce tools as appropriate.
• Create an environment where daily continuous improvement thrives. “Do not put in an employee suggestion system. That’s one of the worst things you can do. The problem is, you’ll start out really excited when all the suggestions come in, then you realize the number of suggestions far exceeds the number of people and resources you have. And you probably won’t reply in a fast fashion, and suggestions will start petering out. Then you’ll get funny suggestions.”
• Understand leadership’s role. “Leadership needs to be aligned. What’s in it for me?”
• Introduce simple, visual metrics to track progress. One to three is plenty. Measure what’s important.
• Force yourself to give decisions away.
• Create crystal clear expectations.
• Hold people accountable.
• Focus on process and results.
What Barrett hears from those who are reluctant to introduce lean:
• We can’t control our suppliers.
• Every order we build is different, and customers all have unique requirements.
• We don’t run a production line. We’re all bay-built.
• We don’t have time. We’re too busy.
• We don’t have the space.
• We can’t afford to do it. It costs too much.
• Our employees would never cooperate.
• Our business is different than other companies.
• It’s impossible to create standards around what we do.
• We have much bigger problems that need our attention.
• I’m planning on selling the business soon so long-term investing in it is crazy.
• Our business is too small to worry about this stuff.
• We’re too big to make all those changes.
• Everything is going pretty good now. Why change?