Archive for the 'Lean Into It Blog' Category
Seeing the waste – In your face Part 2
Last time I mentioned “Waiting” as the key non-value added waste in most office environments. If waiting drives you crazy, try thinking about how many people your process has to go through. It’s amazing, really. Pick anything from your company – an order from a customer, a purchase order to a vendor, a drawing or design of a new product, a new specification for software, etc – and follow it through your company and see how many people touch that piece of information, along with how long it sits waiting.
Ask yourself, “What is the end goal here?” and “Why is this person touching it?” You may be surprised at the results.
We have found that companies continually add layers of process, and by default, waiting time to processes as they have evolved over the years. Usually, this was to band-aid some sort of error that had happened previously, rather than to follow a lean, continuous improvement philosophy of finding the root cause and fixing the problem. What most companies find is that one time something went wrong – Let’s say, the wrong revision print went out to a vendor. Instead of identifying how a wrong revision print went out (was it training? Was it a system issue?), the response commonly seen is to take away the responsibility of getting the prints from whomever is sending prints to vendors and telling them they need to get the prints from someone “authorized” to know if the print is the current revision. Layering #1 – You’ve just added 1 person and what has turned out to be a 24 hour addition to what had been a 5 minute process.
All seems fixed right? But now, because you’ve added 24 hours to your process (your “authorized” person has their own queue’s to work through), you’ve now delayed information coming back from a vendor by 24 hours. Now, you’re potentially affecting your need to place an order for material or potentially affecting feedback to an important customer who needs to get a sales price from you so that they can give you an order.
So now, we’ve constrained another part of our business because we’ve delayed a process. How do we get around it? Well, hire more people! In the scenario above, let’s hire someone who has responsibility to verify and turn around drawing requests in one hour. That will solve the issue – for awhile. Then what happens when the problem occurs again? Now, you realize that your authorized person did everything correctly and in actuality, you maybe have a system issue or a revision control issue. How do you respond? Another layer of control? Or finally dig into the “why” of the situation, identify how many people are touching the situation, and identify opportunity for failure?
David Seifrid is currently the Director of Strategic Accounts at The Morey Corporation.
What’s In It For Me? – The Top 5 Benefits of Lean
As we move on our lean journey, I find myself often putting myself in the customer’s shoes asking, “If I were the customer, what’s in it for me?” Truly, our lean journey is to make us a better supplier to our customers. To eliminate what causes you pain. To completely change a culture that focuses too much on functional accomplishments and not enough on whether we actually have a customer who is satisfied with our cost, quality and delivery. Following are what I believe to be the top 5 benefits of Lean – This isn’t to say that we are there yet, but this will give you an idea of where we are headed.
1. Delivery – The biggest pain for anyone, whether it’s in the manufacturing world, consumer world or any other world can be getting what you want, when you want it In the economic times we are in, companies can’t afford to have delays to their customers. A lot of us came out of 2009 clutching on to the orders we had like gold, hoping that any new orders would signal some sort of blip on the radar as to a possible market recovery. Post 2009, we started to see an upturn in orders from our customers only to be faced with the fact that most of the rest of the world did not plan for this or took the “wait and see” approach. After months of trying to keep lines running with limited builds, now we were faced with the opposite – We cannot build because the parts needed are delayed. Now my customer cannot make their sale, I cannot make my sale, and my vendor cannot make his sale. Ultimately, we’ll be lucky if no one cancels their order. What we are learning through lean is how to take customer demand and attach it to our production line – giving the customer what they need when they need it. We are taking the waste out of waiting and creating a quicker order delivery cycle by focusing on what the customer actually needs instead of items like “To get my throughput numbers, I need to build 500 of these, before I can run the next job (that the customer actually needs)”. Nothing is more pleasing to me than when I’m on the phone with a customer who admits they have just received an order they didn’t plan for and feeling the sense of relief when I can tell them that we can quickly alter our production schedule to accommodate their needs. Are there extra costs? Sometimes there are. Morey is creating a premium fast service to help in these times where we can respond within days. We know that at the end of the day our customers need to have delivery of product in the quantity they need at the time they need it.
2. Quality – Shortly behind delivery is quality. Quality is something that has always been there, however through Lean, we are becoming a more highly critical, self improving organization. Just a couple years ago, it was common to see the approach of “if there’s something wrong, just put it to the side and keep going”. We’ve learned through study of Toyota and the subsequent downfall of GM just how much money and time goes into fixing piles of “bad product” to make it good enough to ship. We’ve implemented an “andon system” similar to Toyota’s and gave the people on the floor the power to stop the line if they saw a problem. This was something they used to fear getting fired for, so it took a little work to get them to truly believe that it was something we wanted them to do. On one particular product, we didn’t get a unit finished for 3 days due to line shutdowns, orders were in danger of being late, and people were screaming at each other to forget the “lean stuff” and go back to the old way of manufacturing in order to keep shipments moving out the door. Rather than give in and go back to building the old way and putting problems off to the side, we kept the line shut down until the problems were fixed forever. Now this product is one of our highest quality products and due to far fewer problems, we have also experienced an increase in capacity and ultimately, savings.
3. Lead-times – Similar to delivery, one of the most painful conversations in any customer service environment is the dreaded lead-time conversation. I hate giving the “Standard lead-time is 14-16 weeks” talk almost as much as I hate hearing it from suppliers. What have we done with lead-times? Have we managed to put in a buffer safeguard at every level to insure the no one is late for anything? Only then to be able to pat ourselves on the back for meeting our “promised delivery date” while our customer walks away upset that they had to wait so long? Or do we counter this by purchasing large amounts of inventory to have on the shelf for when we need it? Lean helps us to clear out these layers of “fluff” to increase cycle times and speed up manufacturing. How can a customer know exactly how many units they will need 16 weeks from now? Of course it’s going to change! I don’t know now how much gas I’ll have to put in my car during the week of May 17th! Lean poses the question of “how can we work with our customers and vendors to keep inventory low, but always be ready to support the needs of the customer with minimal lead time?” In manufacturing, there will always be a build time, per se, but while working on efficiency and throughput improvements internally, it does nothing for the customer if we have to wait 16 weeks for a part to arrive before we can start building. In working with our vendors, we can create a material “store” scenario where, much like a supermarket, we can go to the store, get the parts we need, have the vendor refill the parts based on what we use and what we see coming, and then they turn around and do the same with their vendors. You don’t see a bread delivery driver at the store dropping off 1000 more loaves than the store needs on a given day and burying the store in something they may or may not sell. Instead, the driver is there on an ongoing basis, checking previous consumption, refilling the shelf, and working with the store on anticipated sales to determine how much to prepare in the coming days/weeks. Toyota used this concept 60+ years ago when they started manufacturing automobiles, because they could not afford to carry shelves of inventory or have a large amount of product sitting waiting for a buyer. A lot more of our customers are moving to this type of concept in their demands from us. It is interesting to see world class OEM’s, after the struggles of the last year, coming to us and saying “We can no longer carry the inventory like we used to, we need to implement lean principles” and low and behold, efforts we are working on internally are now tying into those of our customer base.
4. Cost-competitiveness – Of course one of the biggest benefits of lean is financial savings. By focusing on having the material needed to build what the customer wants and continually turning inventory, you are able to decrease the costs the company carries. When this happens, it is much easier to be cost competitive with other world-class manufacturers. What we have started to see is that by showing our ability to eliminate waste, and thereby lower expenses through lean, our customers start to notice that we can provide competitive pricing when stacking up against any other world class manufacturer. Now, once price is taken out of the picture, it is easier for our customers to stack up the logistical advantages of working with a company in the United States.
5. Customer Driven Mentality – Rounding out the top 5 benefits of lean is what I feel the most important benefit of lean. The requires a cultural shift to a complete customer focused mentality where all members of an entire organization not only know how their role affects the customer, but thinks first of the customer and what effects we have on them. Most of us are used to companies where people know their job, and that’s about it. They don’t know how their success/failure affects the customer and sometimes, don’t even know how their success/failure affects their own company! I’ve learned a lot from Toyota over the last year and recommend the book, The Toyota Way by Jeffrey Liker. The customer driven mentality has caused Toyota over the years to do things that from a business perspective would have most companies screaming “Are you out of your minds!”, but in the end, cemented their relationships with their customers. Even as I write this, Toyota is shutting down sales and manufacture of 8 models until they understand a quality issue relative to gas pedals sticking. How many companies would risk and take the hit from a financial side in order to cement their reputation with their customer base? This is the mentality that we are working to adopt at The Morey Corporation – Always, Always, find a way to make every customer happy.
David Seifrid is currently the Director of Strategic Accounts at The Morey Corporation.
Walks, Singles, and Doubles
Over the past months, we’ve experienced a strange lesson learned and a word of caution to pass on.
We spent a lot of time working towards a high performance culture of continuous improvement. As part of this, we launched improvements using the “A3” format. In a nutshell, the A3 format states any improvement project should be done on an A3/11X17 pc of paper divided into 4 quadrants – business case, current state, future state, and actions needed to reach the future state. If it’s too big for an A3 size paper, it’s too big to tackle as one improvement project.
When we started out, we focused on getting people to buy in to the concept of creating A3’s for any improvement, no matter how big or small the benefit. This proved to be a great launch because we got a lot of people to start improvements and focus on any improvement. We were flooded with ideas.
Where we stumbled a little was that we started seeing so many improvements being launched that we were sucking up resources very quickly. In response, we made a “vetting” process to make sure that the right improvements were being worked on first. By “right”, I mean the ones with the biggest benefit to The Morey Corporation. We thought this would be a good way to prioritize improvements so that we were not scattered all over the company trying to do too many improvements at once. The unexpected by-product of this was that the perspective of the employees changed to one of “you won’t get resources for any improvement you launch unless it means a big gain for the company”. By default, the well of improvement ideas ran dry very quickly. Why spend time trying to promote and implement an improvement, if you don’t think you will get resources for it?
I don’t feel we were trying to push an agenda of “Only big dollar improvements will be accepted”, but that is what happened.
Now, we are working to go back to where we were a year ago to re-promote the concept that we don’t want home runs. Walks, singles, and doubles win ball games the vast majority of the time. We want small, incremental changes that decrease costs and eliminate waste and are setting up systems to accommodate these “Quick Wins”. These will always add up to more savings by the end of the year than one or 2 monster changes. It could be that 5-7 small changes that fall under the same umbrella end up building to a huge savings at the end of the year. If you were to try and not do 5-7 small individual changes and instead 1 big change that covers them all, the chances are far less likely that you’d be finished and complete by the end of the year.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
Value Streams
Earlier this year, we decided to divide up our company into Value Streams. A quick explanation of a value stream is to say “business unit”. Essentially, a separate line or section of the business that operates independently of other portions of the business, from the perspective of the products that run down that line.
Effectively, we are taking the standard Vertical corporation structure and breaking down the walls to create a horizontal structure. So, rather than having a Planning/Scheduling department, a Purchasing department, a Production department, etc that are all working to their own metrics, we have a Value Stream that is responsible for the entire order to cash cycle of the products assigned to that Value Stream. So, we have a value stream which consists of a full production line with team leaders and supervisors, a planner responsible for the planning of products on that value stream, a buyer responsible for making sure all parts are on order, a customer service rep responsible for making sure all orders are scheduled to ship accurately, and an overall Value Stream Manager responsible for the financial success/failure of the Value Stream.
The benefit of this structure is the team members assigned to the Value Stream are learning to be responsible for the products on their value stream. We now have a team of all different disciplines living, eating, and breathing the products on their Value Stream. Rather than focusing only on getting their specific job done, they now have a dual responsibility to make sure that their value stream is successful. This has started to foster a team mentality within The Morey Corporation where any issue in the value stream, from an order through the shipment, is responded to immediately by any member of the value stream team (often by many members of the Value Stream). Really, what this is doing is bringing employees closer to what makes the company money and ties them closer to customer.
Sure, this change hasn’t occurred without its hiccups, but one of the benefits from this is that people like myself have such a far greater understanding of the operations side than we ever did before. Consequently, our production supervisors and manufacturing managers are now even closer to the effects on our overall business. It’s much more difficult to stomach a delay in production when you know the domino effect that this can cause in a lean environment.
It’s extremely interesting to see people who have never been involved with shipping product now understanding the entire order to cash cycle and how their problems or delays affect the entire flow of the value stream. It used to be, like traditional companies, that a lot of people did not know how their specific job helped the company make money. Through Value Streams, we have been able to tie people directly to shipping units to our customers.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
Office Andons – We’ve always done it this way…
Previously, I talked about the role of the andon as a function of “Quality at the source”. We use andons on our manufacturing lines to alert the company to any problems, essentially raising a signal and stopping the production lines.
Stopping of production lines is a quick way to raise a lot of attention when you have shipping dollars waiting every day for product coming off that line and any delay has an effect on shippable dollars and inventory expenses, not to mention throughput dollars.
But what happens when there’s a problem in an office environment? Wait. Literally. Maybe place a call to someone and wait for a response. Maybe an email. Maybe stop by someone’s desk and see if they’re around. In the mean-time, we wait.
It seems so easy for people to accept andons in a manufacturing environment and to understand that when a line stops, a lot of tension is created. In the office, as we have discovered, it’s not always so easy. We tend to view waiting for a problem to be solved as just something we’ve always done.
At Morey, we implemented andons in the office to immediately call attention to situations in a department that would stop a person from doing their work. In Customer Service, it may be an issue that doesn’t allow an order to ship, or even be entered. In the Planning department, it may be a delay on the line that is requiring an adjustment to the build schedule, or a component shortage that has shut down a line and is impacting a build/ship schedule. In our Materials group, it may be a delay in getting a part on order that will eventually impact a build, and by default, a future shipment.
We follow the andon process the same that it would be followed on the floor by having a help chain and an escalation pattern. We have used this to identify gaps in our systems that seemingly have always been there. This has definitely been a challenge for us as we are uncovering age-old issues that have always been overcome. The biggest challenge has been to convince people to NOT overcome them, but to raise the andon so we can identify it and fix it forever.
If you try this at your company, be prepared for a potential landslide of opportunities. Remember, this is a good thing. But just exposing them is the first part. Now, let’s fix them forever. The gains will surprise you.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
Seeing the waste – In your face
One of the coolest things of this lean journey is the ability to better discern waste in everyday processes. Everyone wants to eliminate waste in manufacturing. It’s the easiest place to do it. That’s where everything is visible and tangible. We’ve got guys working like crazy to get 30 seconds out of a test operation to increase the throughput of units on the floor, but you know what? Everywhere you go, the manufacturing floor will be the most efficient running operation compared to every other operation and process in that entire company.
Once I started thinking about this concept, I started to realize that while waste may be visible on the production floor (a product not moving, a stopped line, WIP), it’s just as prevalent in the office environment if you know what to look for. If you follow a customer order for a product as it comes in the door to the time it leaves, just a fraction of that order’s life is actually spent on the production floor. Now, think about all the time that order, in some form or another, spends sitting somewhere, waiting.
“Waiting” is the key non-value added waste in an office environment. We see it in our every day lives – Waiting in line for the printer/fax, waiting for the drawings, waiting for approval, waiting for material. How many office operations do you see where someone waits for a stack of orders/tickets/emails/requests to pile up before attending to them? In essence, we have to build systems and lead-times around our waiting. What to do?
What we are doing in our office environment is to assess all the processes with the people actually performing the work. Identify the waste in processes in every department – What is the time impact daily, weekly, or monthly? Continue to ask the question “Why?” Guaranteed, you will probably get to a phrase similar to “That’s how we’ve always done it” Typically, companies overload themselves so much with manual processes and waiting, that when business picks up, you have to hire new people just to continue to move all the extra waiting “waste” that piles up.
Look for the low hanging fruit. Like baseball, focus on the singles and walks and not on the home runs. At The Morey Corporation, we realized a quick savings when we looked at our shipping process and realized that a manually controlled shipping check requiring 3 departments input was slowing down shipping on a daily basis. When we dug deeper, we identified that 3 departments were accommodating what was already a capability in our corporate computer system. Once implemented, we freed up enough office time in 3 departments to equal about $25,000 in one year. This was merely one quick waste elimination of a process that we had been doing for at least 10 years, but it immediately wetted the appetite for more!
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
Lean Strategies to Cope with a Volitile Supply Chain
We’re currently feeling the effects of the market on our builds and our attempts to go lean. In the first few months of this year, we have faced the thrill of victory and the agony of defeat. “Orders are increasing – Yes!!!” “Wait, what do you mean the lead-time for the parts I need has doubled?”
Given that 2009 was so much of a challenge for everyone, a lot of manufacturers have been unwilling to add shifts, labor or capacity even though orders have steadily been increasing since December. Everyone has taken a “wait and see” approach in case the increases are just a blip on the radar. Because of this, the only natural evolution is that as orders increase, the lead-times for parts increase. So, we have seen our orders for parts we need to build greatly increase in lead-time. In one instance, we were notified that a part due on our dock in 4 days would not arrive until September. September!
How do we get around this? First and foremost, work closely with the customer. Letting the customer know the issues we are seeing may result in A) An offer to help, B) an unknown alternative surfacing, or C) a collaboration within the customer that yields help. Too often, companies are hesitant to let a customer know that they are having any sort of issue until they have exhausted every last opportunity and missed on every last wish/hope. Generally, at that time, most companies let the customer know and it is far too late for the customer to make any alterations to their schedules. This usually leads to the first question of “How long have you known about this?” followed closely by “And you’re just telling us now?”
As we continue our lean journey, we are using these types of circumstances, when they do pop up, to investigate internally how it would be handled in a lean environment and countermeasures to use to avoid such instances. From such tools as buffer inventory against vendor lead-times to pull replenishment on parts, we are able to better position ourselves to accommodate customer increases. But if, and only if, we are in constant communication with our customers and vendors as partners, will we succeed.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
The Power of the Andon – Quality at the Source
In the lean world, the word andon is given to refer to a “signal” for help. It can be a sign, light, buzzer, or anything that could draw someone’s attention to a problem. The term is part of a larger belief called “Jidoka”, or, built-in quality. More on Jidoka in a later blog.
In our lean journey, one of the quickest realizations we’ve come to is how, in a production environment, the pressure seems to always be on the production workers. “More, faster, now” all seem to be words heard on a daily basis. We realize the by-product of this tends to be large amounts of In-Process, half-built, or “trouble” units that get put to the side – Sacrificed to the gods of “efficiency” in order to meet specific numbers or required shipments. But no one ever seems to ask why we have such a build-up of incomplete units until there is no space left. Then, only when time allows, there is an effort to clean up, finish and fix the accumulated “WIP” that has started to take over a production floor (Almost like watching mold grow over the area of a piece of bread, in my opinion).
Even more disconcerting is that in this scenario, no one is asking why parts are getting set “off to the side” or what trouble is causing us to stop builds mid-way through. The attitude of “we’ll get back to it later” permeates a lot of manufacturing because it’s an easy relief valve to the current situation. Like the old phrase of “staying one step ahead of the authorities”, except in a manufacturing environment it’s more like “staying one step ahead of missed customer shipments”. Do we ever realize how much quality is being sacrificed? Why don’t we focus on fixing problems first so that they don’t have the potential to be problems for our customer, or worse, the end customer buying that car, truck, tractor, bulldozer, etc.?
At The Morey Corporation, we’ve created a culture around raising the andon (Signal for help) at the spot of any problem. Effectively, this means that at any point of a manufacturing operation, if a problem is seen, any operator can “raise the andon” and that production line must shut down. In our environment, there are andons set up at multiple points down a production line as signs on top of poles. If there’s a problem, the sign goes up and everyone can see it. No one can build until the problem is solved. We have adopted a “Fix it fast and Forever” approach that now puts tension on everyone involved to fix the issue before restarting the line. Customer orders still need to be filled. The line still needs to run, but putting things to the side is no longer an allowable practice. Nothing can happen until the problem’s solved, even if it means operators sit at their station for the rest of the day doing nothing. The line can only be restarted by the Manufacturing Engineer responsible for the line once the problem has been solved. This focuses an immediate spotlight on the area of the problem and pulls in a team including the operator who found the problem, the first responder to the problem, the manufacturing engineer, and a myriad of other people that either happen to be in the area or are called in for their expertise.
Effectively, what we have done is to take the pressure that used to be on the production operators, that of the “more, faster, now” variety, and reallocated that pressure to management, engineering and quality. They now see operators sitting and waiting to restart work and they feel the pressure of getting things right so the operators can do their job instead of just expecting them to overcome issues. At Morey, the operators have the power and authority to raise the andon for even the slightest issue they see and no one can come tell them that this action wrong – It is actually celebrated.
The end result from this entire change is that we have fixed a mountain of issues in the last year inherent in our manufacturing that had been there for years. Our operators had learned to overcome issues, but no one ever realized how much just “overcoming” an issue cost us, not only in decreased efficiency, but also in quality. Our quality, throughput, and efficiencies have all increased, due in part, to this focus on andons and putting the onus of quality at the source of the problem. Now we are seeing just how well manufacturing can run in this scenario of fixing it fast and forever. So much so, that we have started to now implement andons in our office environment. You may think it sounds funny, but I personally, in my departments have seen issues pop up that go back as far as 20 years that we have just learned to live with. Now that we are exposing them, we are fixing them and making life a whole lot easier on all people involved and enabling us to serve our customers with quality product, rapid response, and competitive cost.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation.
Clean Up Your Room! The “5S” Factor
Seems like our parents were onto something what they admonished us to clean our rooms.
The Morey Corporation’s Lean journey started for us roughly 18 months ago with the implementation of 5S: Sort, Simplify, Shine, Standardize, and Sustain.
The concept of 5S is to take an established area, Sort out all the items not needed daily to do the job, Simplify where everything needed daily should go (label spots), Shine the area by cleaning it, create a Standard (usually a picture) that would show what that space is to look like at all times, and Sustain by identifying how often you are re-doing the 5S’s to make sure the workspace looks like what the standard says it should look like.
I was designated to be the resident expert on 5S for MOREY, which required me to not only learn the 5S’s but to apply them across different functions (manufacturing floor, office departments, common areas). My initial opinion was, “Oh, so you just clean up your space really well, and you are done”, which was no different than the normal person who waits until the day before a long weekend or vacation to do a complete cleaning of their space, so if anyone from management stops by while they are gone, at least they look organized. After interviewing colleagues who had backgrounds with 5S, I started to understand the overall principle was to set up a workspace where the product being produced could be done with any needed tools or items within arms reach.
I (like many people) have always been a person who liked to believe that my desk was “organized chaos” and that I truly knew where everything was. I even had an extra cart that sat behind my desk to hold the files and paper overflow from my desk.
In a manufacturing company, you also have the tendency to “collect” different parts, components, samples over the years while working with any one of 200 different products. This comprised the space under my desk.
So, in my start into 5S, I had to ask the question of “What here is needed every day to do my job?” and then either filing or trashing the rest. What wound up happening was letting go of a large amount of things that served as a safety blanket over the years, like paper copies of electronically stored emails and samples of years old components we no longer used. We tend to feel much safer when we can hold something tangible rather than knowing it’s backed up on a hard drive somewhere or available somewhere in the building. As I was throwing things away, I found myself asking internally, “Why did I keep this for so long?” and realized I was starting my evolution into a world of lean thinking.
The final result for me was a desk that had only items on it that I needed to do my daily job. I thought it looked great, but wasn’t prepared for how much it increased my efficiency. All of a sudden, I knew exactly where everything was at all times.
When assisting in the 5S implementation in production, I found how much efficiency and quality had improved by just making sure the right tools had a space at the right operations. Workers were no longer spending time looking for tools or components and then having to go back to their station and saying, “OK, where was I?” This started to catch on rapidly throughout the production floor. My job then became to try and make believers out of employees that were part of the office.
It helped out greatly that most people had remembered what my desk looked like and were willing to try a “new thing” that worked for me. We still had those people that were resistant to getting rid of their “paper” and believed in “organized chaos”, but they started to see a change where everyone was talking about how 5S helped them and how there were no embarrassing feelings when a manager or customer walked by. Slowly but surely we started to see a much more organized, efficient, and quality driven organization.
David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corporation. He is the author of “Lean Into It,” a MOREY blog dedicated to the day-to-day aspects of Lean implementation.