Lean manufacturing probably isn’t what you think it is.
“We’ve all heard about the sexy tools of lean,” says Brandon Phoenix, a lean/business consultant for TMAC, a Texas-based company that delivers hands-on technical assistance and training. “People throw them out the all the time: Six Sigma and all those things. They’re detrimental to a lean transformation if that’s your focus.”
He said that most guidelines for implementing lean practices are missing one critical ingredient: a lean management system to sustain the journey. There is a linkage between an organization’s culture and its management system, including performance measures and management, and management habits and routines.
Phoenix raises these questions to company leaders: “Are your company’s processes and the facility setup disrespectful to the organization and your people? Are you wasting their time and your time? There’s nothing more important than time in a lean transformation.”
He says the MEP Lean Network defines lean as “a systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.”
“If you have five work stations that do five different things, they’re all separate from each other, but if one of those things doesn’t accomplish its mission, at the end of the day we don’t get a finished product,” he says. “We have to look at it from a holistic, systematic view.”
Lean is all about eliminating wastes. And there are eight wastes that form the acrostic DOWNTIME:
“What’s the best way to fix any problem? Eliminate the root cause and then put a control in place. The control says, ‘Hey by putting this in place, this will never happen again.’ Or do you do nothing and just hope it doesn’t happen again tomorrow? That’s what a lot of companies do when they solve problems. A lot of them throw money at it, and that doesn’t always solve it.”
“Every single one of these wastes is a symptom of overproduction. It is the worst of all eight wastes. It leads to all other wastes.”
“There is no value in it. But I’ll go to organizations and watch people waiting for work to come to them. OK, keep waiting. I’ll help you with that.”
- Non-value-added processing.
“The customer could care less about that.”
“Let me tell you if you have a transportation issue: If you have a crane in your facility. I know some things are heavy. That means they have to be transported a long way. When you are transporting something, you are not working on it. It has no value. I’m not saying you can get rid of that transportation altogether, but how do you get operations together so you don’t have that issue?”
“Not enough inventory is evil. Too much inventory is evil. The right amount of inventory is what lean strives for.”
“I have a company that makes fans. This lady does this eight hours a day—goes back and forth. I said, ‘Take that pallet there and move it here.’ It took me five minutes to figure out what was wrong. Nobody could see that? No one taught them. We took two hours out of her day. What do you think those two hours were spent doing? Making more fan blades. One of your obligations as a leader is teaching your people how to see waste. Solving it is easy. Finding it is difficult.”
- Employees’ knowledge, skills, and abilities.
“Do we take advantage of our people’s knowledge, skills, and abilities, or do we chop their head off when they come in the door?”
He says that for 99% of the companies in America, 99% of what they do has no value for the customer.
He says there’s another acrostic that spells FEWER:
- Full use of raw materials.
- Energy efficiency.
- Water conservation.
- Eliminating toxic material.
- Reduction of packaging wastes, emissions to air and water, solid and hazardous wastes, and regulatory obligations and risks.
Phoenix says there are roles and responsibilities in the structure:
“Their role is to inspire and engage. And that doesn’t mean rah-rah-rah.”
- Value stream managers.
“The value stream says, ‘Based on time, this is how I’m currently situated. This is how my information flows and my material flows. It takes me 47 days from the time raw materials are ordered until the time the product is delivered to customers. I want it to be 27 days, and this is how I’m going to do it.’ It not only develops the value stream map, but makes the transformation.”
“They have one job in any organization: change behaviors.”
“Get people to participate. How? They get to submit proposals, not suggestions. What if I put an idea in the Suggestion Box and never hear back for six months? I’d be pretty ticked off. Use a proposal system.”
Waste elimination entails:
- Product flow.
“How do we get it from 27 days to 22 days? Take the non-value-added things out. But can you see the NVA? The more stuff you get into your system, the slower your system goes. So we take the stuff out.”
- Process quality.
“Most companies measure the defect rate, but that is a lagging indicator. The defect has already been corrected. Product quality says, ‘I’m going to try to measure every dimension on this engine and make sure it’s perfect.’ Process quality says, ‘I’m going to control the amount of stuff I’m going to put into the process so if there is an issue, I can mitigate that.’ “
- Equipment performance.
- Material productivity.
“It’s output divided by input. If I put 100 bottles into a system and I only get 90 out, that’s 90%. Is that good? Do we know? Do we care? Are raw materials important to us? Are we just hoping it doesn’t happen tomorrow? Or are we working on fixing it?”
- Product Design.
“Does my product function better than my competitors’ at a cheaper cost?”
Culture is the summation of habits, Phoenix says. If you have 500 people in an organization and you put all the habits in a box, that becomes your culture.
Five thing supervisors should work on:
“If I don’t feel comfortable that I’m going to go home with all my fingers, how productive of a worker am I? What if a worker got bleach in his eye the day before? I’m coming to work the next day nervous as heck, saying, ‘I hope I’m not the next one.’ The key for supervisors in lean transformation is that he focuses on observable habits. What if they’re supposed to be wearing safety glasses and you walk around allowing them to not wear them? We have to correct things at the observable level—the lowest level.”
“Does the first shift do things the way the second shift does? After awhile, entropy sets in. If a motor is supposed to be built this way, why is one person doing it differently than another? That leads to mistakes and defects.”
“Supervisors should be working on making work as simple and easy to do as possible. If it’s not, that leads to mistakes and accidents.”
- Scientific method.
This involves the “five whys”: start with a simple problem statement about what the issue is and then work back from there, asking why each step occurred. “Our brains are wired to do this.”
“Doing the right thing when nobody’s looking. List five steps to use to make the facility cleaner and easier to work in. We do it for only one reason: It creates self-discipline in the workplace. It is your responsibility as a leader to create self-discipline in the workplace.”
Phoenix says the DNA of lean is brought to life through four rules that guide the design, operation, and improvement of every activity, pathway, and connection for every service:
- All work shall be highly specified as to content, sequence, timing, and outcome.
- Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.
- The pathway for every product and service must be simple and direct.
- Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.
All the rules require that activities, connections and flow paths have built-in tests to signal problems automatically. It is the continual response to problems that makes this seemingly rigid system so flexible and adaptable to changing circumstances.
Traditional systems have these characteristics: complex; forecast-driven; excessive inventory; batch production; long lead time; quality inspected-in; and functional departments.
The focus is on unit cost, keeping machines and people busy and moving, improving value-added steps, and efficiency of the individual and work center, and it’s command- and control-based.
Lean has these characteristics: simple and visual; demand-driven; inventory as needed; small lot size; minimal lead time; quality built-in; value stream managers.
The focus is on throughput, keeping product busy and moving, removing non-value-added steps, and value stream efficiency, and it’s team-based.
“In a traditional business, the focus is always on cutting costs,” he says. “There are three ways to make money: cut costs, increase throughput or cut inventory. Most of us focus on cutting cost. Lean focuses on improving throughput—which is the rate at which revenue or money is generated through sales.”
The benefits of a lean initiative: 95% lead-time reduction, 50% increase in productivity, 90% work-in-progress (WIP) reduction, 92% quality improvement, 75% improvement in space utilization.
“Productivity increases because people see wasteful non-value-added activities and they’re working on them and fixing them,” he says. “WIP is reduced. Quality gets better because by cutting the WIP, I have less stuff in my system to get messed up. Space utilization increases. Why would I want to have more space inside my facility? There’s equity and value in space.”