Lean Manufacturing in Job shop Custom Builds
What is the culture of a custom job shop when it comes to implementing the Lean Manufacturing?
Main
The impact of a global economy is being felt everywhere in the world today and in some areas, they have benefited from this movement but in other areas of the world the impact has been devastating. This movement has resulted in production operations being moved off shore to find lower cost in labor infrastructure. Job shops have been able to resist the movement because the expertise required to produce one-of-a-kind products was only in areas where the organization to train the craftsmen resides. North America has the advantage with well-developed and excellent infrastructure to support the Job Shop markets with well-trained people.
There has been an increase in pressure to move custom work to lower labor cost areas. This is impacting the long-term financial viability of companies. To counter these pressures, some companies are setting up relationships with companies in other countries to capitalize on the lower labor cost. This strategy has met with varying success. Some companies may question the fact that they must change to survive. The more important question is, what options do we have other than moving the entire operation? Can we avoid moving by changing the way we operate our business? If we make changes correctly, it will lower the costs and with the combination of lower costs and closer proximity to our customer, we will be more competitive. If you are able to answer the questions and meet those challenges then moving may actually be the wrong solution for you.
Job Shop Culture
What is the culture of a custom job shop when it comes to implementing Lean Manufacturing? From personal experience, management of some job shops says that the culture of lean manufacturing has no place in this industry because we don't make anything exactly the same twice. This is true, each of the finished products may not be exactly the same but the key is that the processes that the product go through maybe the same for each unique finished product. The job shop industry is made up of very educated and highly skilled individuals that have a great deal of training to do their job. The first thing the employees think is, "how does somebody off the street with only the Lean expertise and no experience in their field, tell them how to do their job better". What they must understand is that lean is not about changing the five percent of value added work that the employees perform but the nine-five percent of waste around the process. This misinterpretation is the biggest stumbling block for most companies.
It's not about changing the way the well-trained operator does his job but it is about is removing the waste around the operation. People are reluctant to change and Lean is about change - not just to the floor operation but also to every corner of the company and it's a change of a mindset. Lean change affects the way everyone looks at ther job.
The Customer
The three biggest things all customers are looking for in changes from suppliers are quality, cost and delivery. Customers are more likely to want to develop a relationship with suppliers that have the ability to attain consistently higher quality, lower cost and the ability to react quickly to their ongoing demands. What can Lean Manufacturing do to help you make improvements in all three demands from your customers?
Quality
Quality has been a given for over the last half a century or longer. How does lean manufacturing improve quality? You have to ask what impacts quality, employees not trained, employees not sure what to do or how, not having the tools to do the job correctly and so on. There is a tool box full of tools used to dramatically improve the quality, five S's, standardized work instruction, cross training, and qualifying operators. Companies agree quality is a given, if you aren't manufacturing with the quality that customers expect, you can expect you will not stay in business long.
Cost
Cost
Cost is a concern to every customer, but companies know that if the price goes down and operating cost remain the same, the reduced price will impact the company's bottom line. Downsizing is not the answer, there is an enormous price just letting people go.You have to control your operating expenditures. It is almost impossible to get employee cooperation if you are asking them to improve themselves out of a job. There are other costs that companies can focus on including inventory, transportation, overproduction, etc.. As you find inefficiencies, you will create a need for your company to find more work to feed the more efficient company. There are companies that reduce cost by reacting to the market prices and companies that are setting market prices by an organized methodology to attack waste. These efficient companies are the ones that have the greatest chance of survival.
Delivery
Delivery is a combination of 3 things: value added and non value added activities, and business value. Delivery time is the accumulation of all activities including added value and waste activities. Delivery time reductions can be dramatically improved by have the operator do their job in a regular steady pace without all the activities that don't add value. Valued added activities are typically in the range of five percent! The challenge is to see the waste and use the proper tools to remove the waste.
Implementing Lean in a Job Shop
Implementing lean is a challenge in the job shop industry, it is good idea to acquire a person or company that has the expertise (look for individuals with proven successes) required to introduce the changes is an organized methodology that can improve the entire value stream without creating exciting chaos. Each industry is different, also every company is different and each company can only handle a certain amount of change in a short time frame before you impact the culture, but the other side, is everyone is too busy to implement the changes so improvements are delayed. This is where an advocate for lean is required in the company to be the daily voice for change; this is someone eager to work with the employees to implement change.
Give your change agent a fighting chance by having someone with a great deal of experience guiding them. This is a slippery slope and it works the best if you can find someone that has the expertise in lean and has lead a change in a job shop before. Look for the expertise to minimize the negative because it is difficult to backtrack and/or to try and starting over.
Enterprise Value Stream Mapping
So why do you want to change? If you want to change so your company is looking at what the customers wants, then lean is the only way to affect the entire company for the better. Lean Manufacturing is a common sense approach that uses only one document the Enterprise Value Stream Map to direct and communicate the change so everyone are on the same page with no surprises. Here is an example of a Value Stream map before Lean Activities started. This includes all variances for one product line in this company.
Looking at the cycle time for each process you will notice that there is a large variance for each process and this variance depends on the difficulty of the design and size of the finished product. Before the Value Stream activity started, it was believed that if the design of the product is more complex or bigger it will add time to the cycle time or if the product is less complicated or smaller the cycle time is reduced. During the Value Stream Mapping activity it was identified that the greatest determining factor was the size of the finished product, and the design complexity didn't have a major impact on cycle time.
There is approximately a 3x differential between small, medium, and large product cycle time. The small mould takes 1 hr, the medium takes 3 hrs, and the large takes 9 hrs to complete. The times may differ from one company to another but the concept maybe the same. The mixing of different sizes of product going through a department hierarchy resulted in small product waiting to be processed after the large or medium product.
Lean
The waiting to be processed after large or medium product would dramatically add to the delivery time of the small products. The future state map shows 3 different value streams. The shop went from a department hierarchy to a small, medium, and large value stream organization. Machines were divided by size restrictions, turn over was controlled by the Value Stream Managers and employees were reorganized by their ability into 3 value streams of small, medium, and large product. This reduced delivery time by an average of 50%. Before this change the impact on the lead-time of each product trying to push the product though the shop without any concern for the wait time or for the mix of cycle times made it difficult to succeed in reducing lead-time. Lean is the culture of some of the best companies in the world and is common sense once you understand the thinking behind it. The key to improving processes in you company is by 'seeing' the waste and having the tools and expertise to remove it. Lean will make it easy to identify the areas to improve, next comes the culture to listen to the experts, then the execution of the Implementation Plan.
The concepts of Lean Manufacturing are the 'right' approach. Lean has been developed by some of the great minds in history of business (ex. Henry Ford) River Rouge plant, Taiichi Ohno the Toyota Production System, Edward Deming's principles. It doesn't matter what your company produces; these tools and the mindset of Lean do work and improve all types of companies. So what are you waiting for, let's get started!