MRO Today - I’ve been there, done that

I’ve been there, done that

by R.T. “Chris” Christensen

Been there, done that. Yep, that’s me. During my years in the manufacturing industry, I used many of the processes and tools incorporated in the term “lean manufacturing.”

So, when you say “What’s new?” or “I need to look at the newest and best available,” understand that this is a new toolbox with old tools in it.

Manufacturing is all about value-added conversion. We take a raw material — steel, plastic, paper, ground beef, etc. — and convert it (add value) to make a product that the customer perceives as worth the money he or she spent. Nothing is new here.

The tools used to convert ground beef into hamburger are pretty much the same as 50 years ago. Sure, the product has changed and there are some twists in the way we bring it into the market, but the basic process of bringing the product to market is essentially the same, with one notable exception. Computers now allow us to accurately maintain, control and manipulate massive amounts of data in very short periods of time.

With computers, we can forecast quicker on larger databases. It’s cheaper but not necessarily better. Data is data, and the computer does the math on the data we provide. The computer doesn’t make the data more accurate. It just processes it quicker. This lets us process orders quicker and with fewer math errors, but we are still the brains behind what we want the computer to do. This is where we get to the concepts of lean manufacturing.

What we use to make that hamburger is enhanced by lean manufacturing. Like the computer analogy, the tools are the same today as they were years ago. The major difference is that in lean manufacturing, all of the processing tools are brought together.

By aligning them, we recognize the interrelationships between the various process improvement tools and integrate them into an overview process. This lets us maximize the benefits. We place tools like value stream mapping, 5-S, single-minute exchange of dies (SMED), Six Sigma quality management, supply chain theory, cellular manufacturing, just in time and take time flat-rate manufacturing under a single umbrella so we understand the impact on our process improvement capabilities.

By impact, I mean that a decision to implement a specific tool has an effect on more than the initial objective. The interrelations between the concepts must be fully understood to gain the benefits of a tool’s implementation. Let me explain how this works.

I can reduce inventory in your operations in a few short months. All I need to do is stop buying raw materials. I’ll have a reduction in inventory, but obviously this is not an acceptable solution. Yet people who supposedly understand the error in this thinking still do it. The impact of reducing inventory in this model has a negative impact on the company. With no materials, it can’t transform raw materials into a salable product. The company would go out of business. Let me explain further.

Years ago, in my plant days, I had a bottleneck operation in a facility. We manufactured control valves. We started with aluminum ingots, which were cast into valve bodies. We then performed all the machining, assembly, testing, etc. The machine shop was our bottleneck. It was the limiting factor on our total production output. We had excess inventories of raw castings that awaited machining and had long lead times to get the product completed: a 10-week span from ingot to shipping dock. That translated into 10 weeks of work-in-process (WIP) inventory.

Corporate focus was on inventory reduction and shortened lead times. At the time, we were just beginning to understand the interconnections of lean, and had problems in the operations. The corporate focus was on the end results: less inventory and short lead times. So, we cut inventories by building less. Then we promised the customer shorter lead times, but didn’t do anything to accomplish that. What happened? We reduced inventory, ran out of materials and our delivery times became even longer. Then came the hot list, which only resequenced jobs for which we didn’t have parts. We dug a deeper hole for ourselves.

Only later did we realize that the machine shop bottleneck was caused by massive amounts of lost capacity in setup time. The tool we needed was SMED. With this tool, we shortened the setup time from 4 hours to 30 minutes and accomplished most of that in about three months. We started to understand the interconnection in the tools.

Quick setup times gave us additional run hours, and in three months we gained enough time to totally eliminate most of the raw casting inventory. By not having to move parts through a four-week inventory hold, we cut the lead time to six weeks. By quickly completing the machining process, we enabled the scheduling group to better plan assembly. That got us another week. Then we reduced batch sizes and eliminated another week of lead time to get finished parts out of machining. Now, we delivered with a four-week lead time and eliminated most of the WIP inventory of raw castings.

Lean helped us understand what factors drove the large inventories and long lead times and determine what tool we needed to select from the lean toolbox to realize our objectives. By seeing the interconnection in the process, we understood that all of the elements in our process were affected by improved setup times.

Here is the real power of lean manufacturing. It gives us a total view of the objectives and what we need to accomplish. We see the effects on the organization and that we need to work together to resolve issues that impact time to market.

Take a look at your company and think about how you can use some of these tools to your advantage.

It works. I’ve been there, done that and have the commemorative T-shirt to prove it.

R.T. "Chris" Christensen is the director of the University of Wisconsin School of Business' operations management program. If you have a question, contact Coach Christensen by phone at 608-441-7326 or e-mail cchristensen@execed.bus.wisc.edu.