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Leaning it out!. Organizing team efforts for Efficiency, Accuracy and Focus Patrick Lynch CFPIM, C.P.M. October 19, 2004 Nashville!. Background. Patrick Lynch CFPIM; APICS member for 15 years C.P.M. Certified Purchasing Manager ISM

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Leaning it out!

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Leaning it out!

Organizing team efforts for Efficiency, Accuracy and Focus

Patrick Lynch CFPIM, C.P.M.

October 19, 2004 Nashville!


Background

  • Patrick Lynch

  • CFPIM; APICS member for 15 years

  • C.P.M. Certified Purchasing Manager ISM

  • B.A. Michigan State University

    Materials and Logistics Management

  • Practitioner for 20 years

    • General Motors, NCR, Toro, Callaway Golf

    • Currently Principal of Materials, Guidant Corp.


More importantly…

  • 2 Sons, youth hockey and x-cycle riders

  • Coaching (hockey and pop warner)

  • Desert rats

  • Beach combing

  • Snow skiing

  • Enjoy writing

  • Teaching/mentoring

  • Developing employees and coaching kids continues to be the most rewarding experience in my career – or life, in general !


Tonight

  • Hear the good, bad and ugly related to

    a Lean conversion of product, support and assembly areas

    • A “before and after”,… of sorts

    • Tools /techniques – stuff you can take home

  • From a simple guy

    …with simple tools


Things you probably already know…

  • KaizenProcess Review

  • MudaWaste

  • TaktDrum Beat

  • Cycle timeBuild time of one unit

  • Line-balanceEfficiency/cycle time reduction

  • KanbanVisible record/replenishment


Success factors for any Lean Implementation

  • Waste elimination – as an ingrained thought

  • Continuous improvements in:

    • Sales $$ per employee

    • Units per direct employee and units per employee

    • Decreased cycle time

    • Improved quality

    • Making every step in your process count

    • Lower inventories (Raw, WIP and FG)

    • Decreased excess and obsolescence

    • Everyone in the plant THINKING LEAN


Lets get started…The MARKET

  • Pacemaker- remote monitor- Model# CP

  • 1970’s vintage, declining life stage, but surviving

  • 5 variations of end product (literature/leads/battery)

  • Sales rate steady at 90/day (+/-8 at one sigma)

  • Fairly low volume – moderate margin

  • New technologies threaten longevity

  • Medicare reimbursement

  • ISO approved/ FDA approved/CE approved site

  • In general ,…Faced with tough competition and antiquated technology


…MANUFACTURING / STAFFING

  • Process Orientation

  • Sub-operation processes (at other buildings) included:

    • case assembly

    • board stuff,

    • testing,

    • packaging

  • Total of 19 assembly resources including Case, PCBA, kitting, test and packaging

  • Build cycle-times varied from 2 ½ days to 3 days depending on queues.

  • ** Production support shared across 6 major lines


…DEMAND,…and SUPPLY

  • New technologies threaten DEMAND and supply

  • Dated electronics; NCNR common

  • Tooling very mature

  • Fortunately, mostly domestic-sourced components

  • Healthy supplier relations

  • Lead-times for components from 3 weeks to 16

  • Some Lead-times vary from 8-16 weeks

  • MRP-driven replenishment of 95 components


…Support areas

  • 1 Supervisor (single shift, dedicated)

  • 1 Master Scheduler (shared)

  • 5 Material handlers (shared)

  • 4 Buyers (two shared across commodities)

  • 3 Planners (all were shared across product lines)

  • 2 Dispatchers (shop order reconciliation + kitting)

  • Test, Packaging, Shipping supported by shared service


Challenges

  • Separation from Mother Company

  • Fledgling history and no legacy

  • Limited Resources / Limited Data

  • Unknown details on some parts/poor BOMs

  • Tribal knowledge

  • Program DeJour

  • Limited knowledge or interest in many ranks

  • Trust

  • No fallback for materials: Kanban or bust

  • Dependence on MRP and a lot of bad habits


Forecasted requirements systematically drive time-phased launches of shop orders and purchase requisitions at the planned lead-time offset, based on routing and bill of material (BOM) data,…ya de ya de ya da…

We all know the routine:


  • Support Processes….typical findings during Kaizen events

    • the biggest offender is usually the MRP planning system in many repetition-build factories .

      • infinite non-value-added transactions

      • Overhead

      • Slow response system

      • Causes Over-handling of materials and data


Over the years….

Unmanaged evolution leads to process Upon process,

Upon process, upon process…


The result of the mapping process (as-is)…..


The Game Plan

  • Find new facility

  • Create lean infrastructure

    • Knight the knights

    • Training programs

    • Facilities

    • Materials management / S&OP

      • Collect pertinent data (BOMs, history, usage, specs)

      • Revamp storage and replenishment philosophies

      • Simplify ERP structure to support Lean

    • Manufacturing

      • Assembly

      • Sub-ops on line

    • Support areas (Doc Ctl, customer service, accounting)

  • Be completely moved in <120 days


Our Plan of attack – In The Golden Zone

  • “Knight” the Top Management sponsor

  • Company wide training; paper airplanes, etc

  • identify and document Waste via weekend Kaizen

  • …of ALL processes, including support

  • Planned facility moves and implemented (always fluid and mobile, things will change -continually

  • S&OP conversion and a one-time data collection of all component usage


Prepare S&OP for Lean

  • Forecasting now only at Family Level and only in enough detail to support:

    • Supplier Capacity Discussions and Kanban

    • Plant/Equipment expansion

    • Long term staffing

  • Integrate Daily Sales and Demand information via a Biz Barometer approach


What is a biz barometer?

?

???


Bizbarom - example

Titan Bobble Heads10/13/04

13th day of October Yesterday's MTD aveYesterday's MTD

ProductSalesSalesdaily saleInventoryProductionProductionD-O-H

Mason 97 960 8012500490 15.6

Mcnair1181360113 9800300 8.7

Calico 5 70 6 34100 56.8

Bennett 67 620 52 7500180 14.5

Chris Brown 1571497125 750200920 6.0


Materials

  • Convert buyers, where possible, to Buyer/Planners.

    Best if assigned responsibility for a full product line even if commonality exists on a large portion of materials

  • Establish a Masterbook of part info:

    Part Number,

    where-used,

    usage per month on average, lead time,

    starting inventory.

  • Calculate bin sizing, move material into bins at point-of-use

  • Implement Kanban incentives while driving leadtime reductions

  • Start with a stable production line and go full-tilt. Set up bins/sheets and establish program with all suppliers willing.

  • Pull the plug on MRP when that data can be ignored (60 days)


Lead Time Reduction is the Key to Inventory Reduction…

  • The smaller the Lead time, the less material in your bins.

  • Do the math - - it may pay to negotiate a shorter turnaround time (from signal to delivery) instead of building and carrying a larger bin size.


Executing the first steps

  • Cross training of all assembly and manufacturing

  • Implemented Global incentives and killed local incentives

  • Storage at point-of-use, in bins; warehouse conversion

  • Facilities conversion; wheels and drops

  • Accounting modification for full-bin transactions

  • Suppliers aligned for kanban; indemnify to create trust

  • Rolled sub-processes on line and achieved single piece flow (JIT/JIT/JIT/JIT/JIT/JIT/JIT and more JIT)


Simplify your ERP inputs!

  • Use ONLY the required functionality

    • Blanket purchase order creation

    • Receiving (into Raw)

    • Bin issue to WIP

    • Credit to FG at the end of each day

    • BY KEEPING YOUR TRANSACTIONS TO A MINIMUM, EXPECT BETTER ACCURACY !!


Facilities / Manufacturing IE

  • Point-of-use single-point storage

  • Place wheels on unique test equipment

  • U-cell production layout, with limited space between operators

  • Bringing sub-ops on-line

  • Multiple ceiling drops to allow various configurations in manufacturing

  • Create dedicated put-away zones in warehouse while that component inventory is depleted to bins only…


What we started with….


Improvements


Manufacturing @ Move-in date


Manufacturing Line Balance

2nd


Results of 1st line balance

  • 14 second takt improvement

  • Saved 2 headcounts by consolidating 2-3-4

    …And there is opportunity to split BOXING between #2 and the preceding step # 4 to save another headcount.

    Bottleneck is now the test step.


Manufacturing Line Balance

2nd


What were our results (really?!)

  • Pulled the plug on MRP in 59 days (1300 components for 3 product lines)

  • Achieved bonus for cross-training

  • PCBA stuff, test and packaging on-line

  • Cycle reduction from 3 days to 4.0 minutes

  • Aligned production rates to meet sales rate (takt time)

  • 25% floorspace and storage space reduction

  • Margin improvements; continued viability

  • Incidentals: improved inv. accuracy, morale, better sales response, lower E/O, improved margins.

  • Agility: with the kanban material was on-site, ahead of demand, and much greater flexibility.


After the mapping process…..


Better yet!

  • We kept our production…

    …ON-SHORE!!


Your Kaizen, …………..and those next 60 days

  • Start with flowing your entire support process. Luza-da-muda.

  • Include EVERYONE: MFG, MAT, FAC, ACCT, CS, IT, HR

  • Move components to point-of-use; install 3 BIN with suppliers

    [One bin = usage during leadtime + 15% buffer]

  • Bring a breath of fresh air to your ERP and transact in full bin quantities. Do not issue daily.

  • Bring every sub-process possible ON-LINE, including test and packaging.

  • Reducing your cycle time to create agility is the key to

    “Build tomorrow what you sold today”.

  • Single-piece flow, and line balancing will maximize your effort

  • Incent Teamwork, remove silo’s….movie tickets to cold cash

  • Challenge what forecasting and MRP really bring to the table


Come on now!! Don’t be nervous!

  • Its Organized Chaos…and unavoidable.

  • And its more fun than anything anyone in manufacturing may ever experience.

  • Make “fun” a requirement. Set challenges.


Lessons Learned…

  • Kaizen the processes by interviewing the doers, not the supervisors. Make it direct, but impersonal & fun.

  • Single-flow may not be optimal; it may be one, two, three or more based on variables.

  • Team incentives, …..or bust.

  • VMI is a step above Kanban

  • Smaller is usually better when it comes to equipment selection. Dedicated pieces.

  • Avoid postponement strategies unless identity is created at the end of the process. Packout Option?

  • Best long-term metric is: Units per employee


Integration makes success

  • Orchestrating a kaizen puzzle is like putting together a symphony

Supp

Eng

Qual

Mat’ls

Doc Ctl

Mgmt

Cust

Acct

Prod


Resources are everywhere!

  • APICS Library and publications

  • AME

  • Kanban: 3 Bin, Simple as ABC

    • October 2002 Performance Advantage

  • Chainleank Resources:

    Email: Chainleank2@aol.com


What you make of it is up to you…

  • FIND the Opportunity,

  • TAKE the initiative and

  • APPLY common sense

  • Your next 20 minutes at your work site should be focused on looking at your plant with your new set of eyes!

  • Your first stop is your shipping area…is your corrugated on a kanban or vendor managed program??

  • Its all about applying simple fundamentals and organizing common sense into a program for optimized plant-wide flow


Lean

  • Its not an event…

    ……………..Its an attitude

  • Aim for a LEAN ENTERPRISE and Lean out every process possible


Thanks for having me!

  • Anytime I can come to Nashville is worth the extra effort…. So, Until next time!


Feedback

  • Please take a moment to complete the feedback forms and let George know if you have learned anything here or if you have discovered any new resources.

  • Never forget – NETWORK, NETWORK!


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