Labor Efficiency Skyrockets
In the first run, using smaller batches, their labor efficiency was calculated to be 118 percent, and in the subsequent run three weeks later, labor efficiency rose to 146 percent. Go figure. (I did a paper kaizen study and found that with no capital, this labor efficiency metric could be improved another 40 percent to over 180 percent.) As so often is the case, we redesign the system, improve it to create a new present case condition, and then again find further opportunities to improve. The cycle seems endless—and it is!!
Changeovers Are Increased, with No Out-of-Pocket Costs
It is interesting to note that there was some resistance to increasing the number of set- ups on the CNC punch press since they stated that this tied up labor and did not increase
150 300 350 400 450 500 550 600 Turret Topside 2
min/assy (1)
50 100 250 650
Cabinet Manufacturing
Smaller Lot Production - 5 batches of 20 Units each
Assemble Cabinet 4.5 min/cab (7+1) Press Break BS 1.2
min/assy Deburr Bottomside
0.6 min/assy Turret Bottomside 2
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Job Duration - Minutes 200
Press Break TS 1.2 min/assy (!) Deburr Topside 0.6
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FIGURE 5-2 Small lot production.
production. They considered it waste. However, a quick review of some related operat- ing practices showed the following.
First, in an attempt to find quality problems early, they had instituted a practice of doing 100 percent inspection of the first production piece from the punch press. This was done using an automatic optical inspection tool. In addition, it was their policy to stop producing after the first sheet until the quality tech gave them first-piece approval.
This inspection process step was to take 12 minutes. However, the inspection was often a holdup and took far longer than 12 minutes. I reviewed some records and found that over the last two months, the inspection delay averaged 46 minutes (above the 12-minute inspection time allocation). Everyone was aware of this, and no one liked it, but the bottom line was there was no action or even a proposal to reduce it. They simply accepted this time delay but would baulk at the time delay caused by another setup.
Second and even more pointedly, the CNC punch press was only scheduled to run 73 percent of the time, maintenance included, and it was staffed 100 percent of the time.
So they were paying the same for it whether it was running or not. In this case, at this time, changeovers were free on this machine, yet they baulked at doing them.
So it is easy to “see” that they have some serious wastes in the system that are larger than the cost of a changeover, yet these go “unseen.” This is not unusual and we find this in many businesses. Often, it is due to the paradigms these businesses live with, and these paradigms typically go unchallenged. The paradigm is not the problem—we will always have paradigms. The problem is the unwillingness to challenge the status quo. Herein lies the advantage of having a consultant (or sensei) to assist you. He/she will “see” these opportunities much quicker than the people within the business will see them. Consequently, your consultant will bring forth opportunities that you might be blind to. Your consultant will help you in your “Learning to See.” This is invaluable help and the following paragraphs will describe how that advantage was turned into solving business problems and, in a phrase, making some money.
Lead Times Are Dramatically Reduced
Table 5-2 shows the key Lean metrics of first piece lead time and batch lead time.
First piece lead time, a key measure of responsiveness, is cut by 75 percent, and total time to deliver the completed lot is cut in half. All of this was achieved by simply:
• Reducing the batch size
• Applying SMED
• Balancing the assembly cell
• Implementing a type of jidoka
We were able to do it faster, better, and cheaper. And the most encouraging lesson from this story is, we are just getting started!!
First Piece Lead Time Total Lead Time Large lot, 100 units 620 minutes 1220 minutes Smaller lot, 20 units 140 minutes 630 minutes
TABLE 5-2 Lead Time Changes, Bravo Line
How Did the Shortened Lead Times Positively Affect Those Concerns Stated Earlier?
First, for labor efficiency, they had rather liberal estimates for the needed work; and then both planned and performed poorly compared to the estimates. Labor efficiency on this lot was 118 percent compared to the 56 percent they had been achieving. Labor efficiency more than doubled—and at no cost! For them, that meant we could do the work with less than half the manpower. I would call that a huge gain!
Regarding their quality problems, it is clear they had huge problems with rework.
The shorter lead time model allowed them to correct the problems. For example, with the quality problem on the CNC punch press, we were able to catch the problem after the production of only 40 units; 150 minutes into the run. We were able to promptly feed- back the quality problem and fix the problem with the changeover procedure and this also led to reworking a much smaller volume. In the large lot production situation, a review of the schedule shows that the CNC punch press would finish the entire lot after 460 minutes and probably be on another job when the problem was found in assembly after 620 minutes. In this case, there is no possibility to correct the problem and our only choice is to manually rework all 100 units. Whatever the quality problem, whether it is scrap or rework, the long lead-time model only exacerbates the magnitude of the prob- lems. Again, the shortened lead time allowed us to correct the problems because they could be found in a timely fashion and reduced the labor to rework the problems. That was a huge gain for this company since you will recall that it is common to perform rework two or three times, on each job!
As for the scheduling concerns, this by now should be obvious. It is very difficult to plan your way out of problems that you have managed your way into. A review of past production for this model showed that in no case were they able to start and complete this product in the same calendar week! Even with their large lot approach, this job should be done in less than three shifts. It is easy to see that with the large lot production model, quality problems and the delays associated with correcting them were bound to be large and very punishing in terms of lead time. Yet in the reduced lot size we were able to produce the lot in less than 11 hours. It was done the same day! We reduced the theoretical time to produce from 22 to 11 hours, and we reduced the actual time to pro- duce from over seven days to less than one day. I would also call that a huge gain!
How Well Did We Implement the Lean Concepts in This Batch Operation?
Let me give you a word of both caution and encouragement. We were not able to get the essence of Lean incorporated into this production process since we could not really set up pull systems, operate at takt, and flow one piece at a time—and we may never be able to, considering their business.
However, in the end we were Leaner than when we started because we were able to produce the same product using less labor, less space, and do so with a much shorter lead time.
Regarding the Applicability of Lean at Excalibur
So although this is not a textbook example of the application of the principles of the TPS, Excalibur Manufacturing clearly was able to reduce the waste in their process and pro- duce a superior product in a more flexible and more responsive manufacturing system.
They were able to apply the Lean principles and produce their products with less waste.
I call that a huge success! What do you think?
P
oint of Clarity Do not let the things you can not do pre- vent you from doing the things you can!How Lead Time Works for a Job Shop
There is one last point to make about lead time in a job shop environment, and it is absolutely critical to understand. Unlike the typical automobile supplier, job shops often do not have a promise of three years worth of work on the horizon; usually they live from job to job. Typically, their jobs are competitively bid, and very often quoted delivery time is a crucial decision making criteria, second only to cost in the final bid analysis. If you are not able to deliver on time, even with the low bid, you will lose the job. So lead time is crucial to these entrepreneurs. Although short lead times will not guarantee success, long lead times will almost certainly guarantee failure. Short lead time is equal to future business to these dynamic businesses.