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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

Leaning it out!

Organizing team efforts for Efficiency, Accuracy and Focus

Patrick Lynch CFPIM, C.P.M.

October 19, 2004 Nashville!

  • 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
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 !
  • 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
Things you probably already know…
  • Kaizen Process Review
  • Muda Waste
  • Takt Drum Beat
  • Cycle time Build time of one unit
  • Line-balance Efficiency/cycle time reduction
  • Kanban Visible record/replenishment
success factors for any lean implementation
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
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
…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
  • 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

Over the years….

Unmanaged evolution leads to process Upon process,

Upon process, upon process…

the game plan
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
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
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
bizbarom example
Bizbarom - example

Titan Bobble Heads 10/13/04

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

ProductSales Sales daily sale Inventory Production Production D-O-H

Mason 97 960 80 1250 0 490 15.6

Mcnair 118 1360 113 980 0 300 8.7

Calico 5 70 6 341 0 0 56.8

Bennett 67 620 52 750 0 180 14.5

Chris Brown 157 1497 125 750 200 920 6.0

  • 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,


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
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
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
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
facilities manufacturing ie
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…
results of 1 st line balance
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.

what were our results really
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.
better yet
Better yet!
  • We kept our production…


your kaizen and those next 60 days
Your Kaizen, …………..and those next 60 days
  • Start with flowing your entire support process. Luza-da-muda.
  • 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
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
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
Integration makes success
  • Orchestrating a kaizen puzzle is like putting together a symphony





Doc Ctl





resources are everywhere
Resources are everywhere!
  • APICS Library and publications
  • AME
  • Kanban: 3 Bin, Simple as ABC
    • October 2002 Performance Advantage
  • Chainleank Resources:

Email: [email protected]

what you make of it is up to you
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
  • Its not an event…

……………..Its an attitude

  • Aim for a LEAN ENTERPRISE and Lean out every process possible
thanks for having me
Thanks for having me!
  • Anytime I can come to Nashville is worth the extra effort…. So, Until next time!
  • 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!