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Lean Manufacturing
Lean Vocabulary
Misc
Links:
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Lean
Manufacturing
Contents
- Lean Manufacturing Overview
- Waste
Identification and Elimination
- Why it's hard to
do / How to screw it up
Lean Manufacturing Overview
What is "Lean Manufacturing" and why
should I care?
Lean Manufacturing is a modern approach to manufacturing
which attempts to identify and eliminate "waste". Don't let
the fancy vocabulary intimidate you. Lean has its origins in
ancient Industrial Engineering principles popularized by Henry
Ford. In its modern form it was developed by Toyota (think "JIT")
and is now used by many manufacturing companies throughout the world
(at least, those companies that have a future!). Toyota cleverly called
their system "The Toyota Production System" or TPS. Most
large manufacturing companies have adopted and adapted TPS, given it
some new vocabulary words, and now call it "Lean Manufacturing".
The term "Lean" is very appropriate because Lean Manufacturing focuses
on eliminating the "fat" or waste in the manufacturing process. The
word "Waste" is defined strictly from the customer's viewpoint as
anything that does not add value to the product. In our
customer-centric universe, the customer is the sole arbiter of value
and non-value; He will only pay for value, and if we offer him
non-value, he'll take it for free, or go somewhere else.
| Exquisitely
Simple: |
The basic ideas in Lean Mfg are old, having been well
thought out by industrial engineers for almost a century. Don't
get hung up trying to follow the orthodoxy; Focus on doing it
fast, doing it cheaply, and doing it right the first
time. If you apply common sense (which most manufacturing guys have in
abundance), you'll be doing Lean. |
| Maddeningly Complex:
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Lean forces you to do your homework. You
can't simply tell the guy on the floor to go "do something". You
have to: 1) plan how you want him to do it, 2) understand the flow of
materials, 3) balance the different operations, 4) write the work instructions,
5) train him in the process, 6) continually tell him how he's doing,
7) satisfy the accountants, and 8) get your product delivered to the customer when he
wants it. If you screw up any of these things, the whole system
falls apart. Remember, If it were easy, we'd all be doing it already! |
| Essential for
Survival: |
We Americans used to have to compete against
250 million Americans. Like it or not, we're now in a global
economy and competing against 6 billion other people. And most
of those people are thrilled to work for less than 10% of what we
make. Lean is our only hope to beat them. |
Waste Identification
Fundamentally, Lean Manufacturing defines a toolbox of tools to use
that can help to eliminate "waste". This waste is generally fit
into 7 (+1) categories. These are:
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Defects
The normal type of waste we've known all along. We
call it scrap. Our existing factory procedures and systems are
well equipped to identify, track, and correct this type of waste.
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Overproduction
If you make it faster or sooner than the customer wants
it, you've wasted your resources. Ideally, we make things at the
exact rate that the customer wants them (his "takt" time). Any
overproduction is waste. For old-time production guys, this
can be a very difficult concept to accept.
-
Waiting
The most obvious form of waste (and therefore, my
favorite), waiting is anathema to almost everyone on the shop floor.
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Inventory
The form of waste that the accountants love. They
call it an asset, but we know it really is a liability. It cost
money to make, hasn't generated a dime for us yet (we haven't sold it
yet), and has a nasty habit of being damaged or becoming
obsolete. Old timers love it because it may have saved their
butts once, but the problems it causes far out weigh the rare benefits
it occasionally provides.
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Processing
This refers to the extra stuff we do to the product that
the customer doesn't want or care about. Examples include: 1)
Inspection, 2) Rework, 3) Sorting, etc etc.
-
Conveyance
This is a fancy word for "pickin' it up and movin'
it". The most obvious form is the forklift that carries things
around the factory. It may be hard to believe, the but the
customer doesn't care how many times you picked it up and moved
it; he's only interested in the product being where he wants it
at the end.
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Motion
This refers to unneeded motions of people and products,
and includes the classic "mechanic walking to get a tool for a
setup". Good 5S can help eliminate this form of waste.
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Unused Talent
"From the neck down is minimum wage." You've hired
their bodies; don't forget their minds!
A truly Lean enterprise scrounges for every resource it
can find, and uses it all aggressively. Even the dumbest guy on
the shop floor is an expert at something. Make him an ally, and
get him to implement his own good ideas!
Why Lean
Is Hard to Do / How To Screw It Up
If Lean is so obvious, why do so many
people screw it up?
Lean Manufacturing is surprisingly
simple, yet also surprisingly easy to screw up. It doesn't
usually "fail" so much as never produce anything other than extra work
for the participants and then die a slow death. Here's how
I've seen it die:
1. Lack of Commitment
The whole organization has to be
committed to Lean, starting at the top. Starting a Lean efforts
creates extra work for everyone. If the top management at a site
doesn't buy into the effort, the worker-bees who actually do it will
tire of the effort before the results appear. Lean doesn't
necessarily have to be important to Headquarters, but the top guy on
site has to be fully committed, even if the Lean effort has to become a
local insurgency.
Adopting Lean is like getting religion:
it has to change your whole outlook on life. The cliche about
Lean not being the latest "program" is absolutely true. Since
many of the benefits of Lean are difficult to objectively quantify,
they have to be taken on faith (and later, experience).
If the pointy-haired boss just read about
Lean in the latest issue of Industry Week, and wants to try "that Lean
stuff", you're doomed.
2. The Accountants Lie to You
Traditional standard cost systems often
work against Lean. They do several bad things, including:
1) they consider inventory as an asset, while we know unsold inventory
is a liability, 2) they place little emphasis on cash flow, and
greatly undervalue the cost of money, 3) they completely ignore
delivery cycle time, 4) they allocate fixed costs rather than
considering the differential costs of business activities, etc, etc.
Good Lean accountants (yes, they do
exist) understand that "Standard Costs" are an accounting fiction which
(sometimes) helps make good business decisions. Lean looks at the
total waste of a business and maximizes added value. Accountants
need to keep the big picture in mind.
My favorite accounting tool is the
pro-forma. When a major financial decision has to be made (such
as a major capital expenditure), two pro-formas need to be
created: 1) the business with the investment, and 2) the business
without the investment. Then it is a simple matter of picking the
most advantageous business result of the two pro-formas.
3. It Takes a Big Chunk of Work
Up-Front
Implementing Lean takes a lot of
work. Worse, the resulting improvements are difficult to trace to
specific Lean activities. Lean requires good plant
organization and planning, which takes a significant amount of time to
accomplish.
When you're up to your butt in
alligators, it's hard to take the time to drain the swamp. Even
if you believe lowering the water will make your life easier someday,
it's hard to consider drainage canals when there are teeth chomping on
your leg. And if you're not convinced that lowering the water is
a good idea, it's easy to forget about that canal plan for a while.
4. The Improvement Are Mistakes
You Don't Make
Some of the biggest benefits from Lean
are the mistakes that you don't make. No business plan would ever
have built in allowances for these mistakes, so you never see the
"gain" to the plan. For example:
- Reduced Work In Process (WIP) let's
you find problems faster, so when you have to re-work product, you
re-work less. This saves a pile of money, but the
accountants will never know it.
- 5S keeps your equipment cleaner and
better maintained, so you find that critical loose bolt before it shuts
down the machine for hours.
- Procedures are generally obvious, so
associates make fewer mistakes.
5. Cash Costs Too Little
With interest rates at historical lows,
the accountants value cash too lightly (see item #2 above). But
like gasoline to the motorist stranded on the side of the road, cash
can be very very valuable when you don't have any.
I have worked for companies that were
solidly profitable, but went bankrupt with millions of unsold inventory
sitting peacefully in a warehouse. Cash is very expensive!
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J.
R. Casey Bralla