Category: Lean

There remain many folks who think Takt Time is the same as Tact or Touch Time. Takt Time and single-piece flow are core drivers in Kaizen events. They are what connects you to the customer and drives speed. Let’s start with Takt Time first.

Takt Time — I like to think of Takt Time as the customer’s pulse. It is the rate your line must produce. Simply stated, every so many seconds or minutes, your line needs to produce a ready to ship product to satisfy your customer.  The math is simple – Divide your available work minutes for a day by the number of units the customer wants a day. You can move the units to hours or seconds. You can also use weekly averages if it makes more sense.

As I have mentioned in other postings, much of my career has been in high-mix, ETO businesses. Because of this, I have used weekly averages to gain a blended or smoothed view of the variety of items going through a process. To get to “available” time, you need to eliminate any paid lunches, breaks, daily toolbox meetings, etc.

From this Table, if you have a 1-shift operation with 2 paid breaks, your “available” time is 2,300 minutes a week. If the total average units flowing through the line was 1,140 units, your Takt Time equals 2.02 minutes. Simply stated in single-piece terms, we need to have a line that produces a part every 2.02 minutes to satisfy customer’s rate of demand.  The next element that we need to evaluate is whether the process sequences violate TAKT time.

If you have a process family that is continually delinquent, working overtime, and/or using premium freight, you probably have a TAKT time violation.  The sequence that takes the longest to complete sets the pace for the rest of the sequences.  As shown below, operation sequence “A” violates Takt Time of 2.02 minutes by a wide margin.

It really doesn’t matter how fast the other sequences are. If you happen to be a fan of Theory of Constraints, Sequence “A” is your Herbie or pacing item in this line. To serve the customer, the first thing you must address is this violation.

Ideally, all sequences should equal our TAKT time.  Since customer demand is rarely consistent, I like to position sequences below Takt Time by at least 10% – 15%. Before we worry about the lack of rhythm among these sequences, we need to reduce the time in sequence “A.”  The two most obvious strategies are:

1-     Add capacity to sequence “A”.  You might consider adding a second machine or an additional shift.  You have to be careful with the latter idea in a continuous flow environment.  If sequence “A” were to become a two-shift operation while sequences “B” through “D” remained one-shift operations, you would find continuous flow very difficult to implement.

2-     Reduce the work content in sequence “A” through process redesign or by moving tasks to one of the other sequences.

Single-Piece or Continuous Flow — Once you have resolved the violation of TAKT time, you begin to assess the balance of sequences.  Your goal is to achieve a balanced flow throughout the process such that a single piece is processed without delays or storage times.  In a batch environment, you start each sequence separately. When that sequence is finished, you move the goods in line for the next sequence. In single-piece or continuous flow, you deploy an entire process of sequences. My favorite tag line has been, “Decide to Start – Decide to Finish!” Anything short of this, doesn’t serve the customer, nor any other stakeholder in the business.

In our example, you might consider combining sequences “B” and “D” to create one sequence that takes 1.80 minutes to complete.  Your TAKT time and rhythmical capacity chart would now look like this.

Sequence “A” was redesigned to take 1.90 minutes and sequences “B” and “D” were combined to create sequence into “B”.

Once you have your sequences lined up and combined properly, you can relocate equipment based on the new combination of tasks. This final step is crucial to flowing the goods through the line on a continuous basis, while minimizing material handling costs and times.

Summary – First, using Takt Time, make sure your process is aligned with your customers’ needs. Second, make sure your process steps are well-balanced and co-located to support single-piece or continuous flow. These 2 steps will resolve chronic delivery issues, reduce premium costs, and position your plant to out-execute your competition!

As you explore some of these ideas in your own facilities, I hope to hear from you. If you have questions, feel free to reach out to me by email or through the Contact Me button or page. Please post your own success stories in response so other readers will benefit from your experiences.

Thanks & Good Wishes for a successful 2018!

Mike

 

 

 

The Lean toolbox contains a large variety of tools. It’s a long and growing list of acronyms. Which tools do you use where and for what purpose? If you haven’t engaged in any corporate Lean academies, it can be confusing. Most leadership in small to medium manufacturers I see have not had the opportunity to gain experience in Lean tactics. For this group, I’ll focus on speed and agility related tools. As always, I’ll do my best to keep it sensible.

I want to start this topic with a quick story from my past…

If you wanted your career to advance into VP/GM levels at Garlock, you had to gain field sales experience. As an engineering and operations person, I didn’t understand this requirement, but it wasn’t optional. So, when I heard that our long-term salesperson covering Arizona, New Mexico, and El Paso decided to retire, I jumped at the opportunity to go for it. My wife’s family lived in and around Phoenix. Since much of my career took place far from any family, we were happy to see this change.

Let me set the stage for you. Road warriors will recall these days all too well. We moved in the late 80’s. There were no cell phones or computers. If you needed to assemble a presentation, you found a Kinko’s. If you wanted to research what was in your territory, you went to the library, Chamber of Commerce, and local association meetings. Since power generation, copper mining, and cotton processing dominated my territory, my call density was poor most times. These facilities were not close to tourist destinations and my Regional Manager didn’t believe it was possible to do business at 30,000 ft. Thus, you drove 50K miles a year! I think you get the idea…

I had no prior field sales experience worth mentioning, so I was excited to attend the Western Region sales meeting to learn as much as possible. My Regional Manager started with a slide like this one:
It read, “Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.”

With little daily supervision, he wanted us to understand 2 expectations:

1) Rise early, hit the ground running, and get in front of customers.
2) We would earn more as predators!

You may be wondering, “What does this story have to do with Kaizen Events?” Whether predator or prey, speed and agility is a winning combination. And, I agree with Doug — Being a predator is more rewarding!

As a supplier, if you out-execute your competitors, you gain market share. Speed and agility are a large part of this strategy. The other major component is reliability.

Agility is a function of changeover or setup times. Single Minute Exchange of Dies (S.M.E.D.) is my preferred tactic to dramatically reduce these times. I’ll briefly talk about agility later in this post. Outside of investing in a ton of inventory, a Kaizen Event is your most powerful Lean tool to achieve speed. To see if you are already Lean or not, please run the quick litmus test I laid out in my prior blog – Are you Lean or Not?

I’ve conducted events in plants with different technologies serving different industries. Let’s talk about the beliefs and myths I’ve heard most often.

Fear of Failure: First, I really don’t believe in resistance to change. I am convinced it is rooted in a fear of failure. After seeing before and after pictures, I think people worry about making that much change all at once. In 90%+ of the Kaizen events I have conducted, there has been very limited capex investment. The events result in a common-sense realignment of existing assets.

The events are focused on drastically reducing the times no value is being added to a product. Other than redistributing some of the value-added steps to gain rhythm in a process, you tend to still make the same product(s) using much of the same machinery and tooling. Failure in a Kaizen event to me is achieving less than a 50% reduction to cycle time and travel distances.

Lean = Cuts: Lean is not a diet! It’s a regretful name choice… Kaizen events are all about speed. On average, 95%+ of the time an order is in house nothing is happening. Kaizen events focus on this slice, not the <5%. It is NOT focused on cutting heads! However, you may also uncover some large inefficiencies in the process. Should this happen, redeploy these folks to help improve other areas, support growth, or replace retirees.

I’m High-Mix; It won’t work: Having spent over 50% of my career in project-based, high-mix businesses, I do understand this belief. Early exposure to Kaizen events involved automotive companies and consumer goods. Comparatively speaking, these are low-mix, repetitive businesses. Your focus centered on part names, numbers, or descriptions as it was easy to organize Kaizen events based on this. In high-mix environments, there is little redundancy tied to part names, numbers, or descriptions.

The focus must shift to how products flow thru machinery in a plant. Once you build the database using this lens and sort it accordingly, you will find dominant patterns in product flow. Once you uncover them, you can organize successful Kaizen events around these patterns. It took me a while to figure this out in the early 90’s. I have used the approach successfully in high-mix businesses since then.

We don’t have time for this right now: This is one of my favorites! I’ll give you a typical example from history. The plant took 12 weeks on average to produce a machine. The event was going to take 2 weeks. The lead time reduction goal was 80%. We did the event and it reduced the production cycle by 75%. So, here’s the math: We invested 2 weeks for the event and ended with a new lead time of 15 days or 3 weeks. Two weeks for the event + 3 weeks of new lead time equals 5 weeks total including the time invested for the event. They were now shipping the same orders 7 weeks earlier than they would have before the event. And, the new response to demand was only 3 weeks! Don’t have time?

In summary, I wanted to talk about the most common myths I have heard in this blog. If you are hearing like responses in your businesses, ask the 5-Why’s. If these tactics are new to you, then consider adding a Lean champion to your ops team. Let’s briefly talk about agility.

Agility is all about changeover speed. Think pit crew at the track. If you could suddenly reduce changeover times in your businesses by 80% – 90%, would you still feel compelled to make large batches? Think about the improvements in customer response times you would have.

Following a few hundred SMED events, my 1st-pass reduction averaged 40% and needed little investment. Invest in a tripod, a GoPro, and a large capacity micro SD card. Film the setup or changeover on a machine. Make sure the only item in the viewfinder is the piece of equipment. Record what is going on every time the operator is out of the viewfinder. On average, operators are missing from this view 40%+ of the time they are setting up a machine. Do what is needed to keep them in the viewfinder and you will score a 40% cut in changeover times.

I know this sounds way too simple. I can assure you that it is this easy. Getting an added 40% will take some effort and a little investment. Here are a few examples I’m referring to:

Braiding machines – We started with an average changeover of 4-6 hours depending on the number of carriers. Videotape showed the operator leaving the viewfinder for over 50% of the setup time. When I asked him where he was going, he told me he was walking over to his toolbox. Maintenance mounted his toolbox on wheels, so he could roll it up to each machine. New setup time dropped by over 50%.

CNC Mill – When I asked where the operator was going, he told me he was heading to the tool crib. When I asked him what he needed, he said allen wrenches. Bought all the operators allen wrenches. Again, 40%+ decrease.

Metal forming lathe – This one was a 2-for! Operator was leaving to get his socket wrench to changeover each part. Besides leaving the viewfinder, he was clicking away to remove bolts on the part’s retaining band. When asked if I thought an air wrench would make that much of a difference, I said, “The pit crews at the track don’t use tire irons anymore.” We hung an air wrench where he needed it. Over a 40% improvement in part change time and overall productivity resulted.

If your changeover times are taking hours instead of minutes or seconds, try this approach. Spend a little time researching how to externalize setup tasks and experiment to increase reductions beyond the obvious.

I’ll post more info related to conducting Kaizen events in future posts. Meanwhile, I hope this posting helps debunk some popular myths. Remember, Kaizen is your best tool to improve speed, while SMED dramatically improves your agility. This is the combination that makes you the predator and your competition the prey!

As you explore some of these ideas in your own facilities, I hope to hear from you. If you have questions, feel free to reach out to me by email or through the Contact Me button or page. Please post your own success stories in response so other readers will benefit from your experiences.

Thanks & Good Wishes for a successful 2018!
Mike

 

 

 

Most small to medium manufacturing companies I visit believe they are doing Lean. There may even be plenty of the 3 B’s around to support this belief. The 3 B’s are Banners, Baseball caps, and you can figure out the other B… So, how do you know? If you own multiple businesses and manage remotely, it gets more difficult to understand.

Here’s what I use as a quick litmus test for Lean:

1.      How quickly do they turn inventories? In a high-mix, engineered-to-order (ETO) business, I expect to see 10 or more turns. If they also source many goods overseas, then at least 8 or 9 turns. In a low-mix, repetitive manufacturer, I expect a minimum of 20-30 turns. Many of the companies I visit have 2.5-3.5 turns. This is not Lean!

2.      What percentage of an order’s total lead-time is value-added? I use a machining analogy to show whether a process is value-added or not. If you’re not chipping metal, then you are non-value-added! If you are a world-class Lean manufacturing firm, then you should see a number like 20% or higher. Most companies I visit are well below 5%. This is an important metric when you think about velocity. Most of the time an order is in house, no value is being added!

3.      What is their on-time delivery performance? In automotive for example, you must be on-time for 100% of your orders. Bad things happen if you fail to uphold this performance. Most advanced Lean businesses do well with this metric. In heavy ETO companies, you need to be careful using this test as customers control much of the schedule, including the shipping dock.

4.      What is their average setup time in various areas of the plant? Most often, they respond in hours, not minutes or seconds. When I tour the shop, I’m looking for shadow boards, tool presetters, setup carts or kits, to name a few. Long setup times almost always leads to big batches.

5.      What do I see when I go on walkabout in their shop? Do I see several orders and goods stacked up in front of machines? If yes, then they are not doing single-piece flow. It is a batch process. Is there any evidence of 5S? I’ve never conducted a Kaizen event that didn’t include a healthy dose of 5S. When I go through their warehouse, do I see a lot of dust on goods? If yes, they are not using pull systems with their suppliers to replenish stock. At a minimum, they are not using Lean inventory management policies.

6.      Finally, I ask them to tell me what abut their Lean tactics. The most common Lean tactic I’m told is that they don’t bring anything in until they really need it. I rarely hear about Kaizen events or value stream mapping.

There are many more items you can list to evidence Lean, but these are the ones I use most often when I visit a key supply chain partner or potential acquisition. If your plants fall well below the suggested benchmarks, then you know there is much upside available!

I often hear about cycles that repeat in these companies. Sales complains that they can’t sell out of an empty wagon, while accounting worries about excess and obsolete (E&O) reserves. The operating folks worry about efficiency, so they want large batches to leverage setups. You may have unintentionally fueled these cycles through incentive systems. As each group chases their own interests, they collectively fail to notice there is a common denominator that gets all of them what they want – Time.

First, let’s talk about inventory investments and overall working capital needs. This is where the adage that time is money needs no creative interpretation. Simply stated, inventory investments are designed to cover customer demand during the time it takes to restock the shelf plus some safety stock. You hope demand for your goods go up, so outside getting your suppliers to stock your shelves, time is the only variable driving the investment. If you reduce the time it takes to replenish the shelf by 80%, outside of safety stock, your average inventory investment drops directly by the same amount. If your sales team can now quote 80% shorter lead-times, do you think they will have any issues?

So, how do you do this? What wrench in your Lean toolbox do you use? When it comes to speed, I use Kaizen events. Having conducted dozens of events, there is nothing I have tried that comes close to matching the decreases in cycle times I have achieved with Kaizen events. I’ll comment in future postings on this topic. If you would like to learn more now, I suggest you grab a copy of Art Byrne’s book, The Lean Turnaround. I’ve not had the pleasure to meet or talk to Mr. Byrne, but I can tell you that his book is a great primer for leaders and owners alike. So, what about the concerns your manufacturing folks have?

I use setup reduction events to make small batches efficiently. From a working capital point-of-view, I would rather make a single capex investment to reduce setup times dramatically than a continuing inventory investment to support large batches. Achieving decreases of 80% or more are not uncommon.

There are numerous other benefits to consider related to these events. We know that nothing ever goes according to Hoyle… When you dramatically reduce batch sizes and overall work-in-process (WIP), you reduce your failure cost exposure. You also improve the time it takes you to recover from a problem.

If you’re in private equity where it’s all about EBITDA, please keep the following speed bump in mind. This applies to standard cost environments where direct labor is being used to absorb overhead. When you reduce WIP and batch sizes by 80% or more, there will be a brief period in which you will under absorb. Until levels stabilize at the new reorder points and quantities, you will not be producing new parts to get absorption credit. Your accounting folks can estimate the valuation impact, so you have an idea of what to expect. Large improvements to execution often generate top line growth, so there is a direct offset. It really becomes a timing issue. They can also model the increase to liquidity.

You should now have an assessment tool you can use to determine if your business is Lean or not. If it isn’t Lean, you should also have a sense of how to quickly simulate the benefits. I’ll go into some of these topics more deeply in future postings. I’m also in the process of updating a Kaizen manual I wrote for my teams 20 years ago that I plan to make available for download.

As always, thanks & Good Wishes for a successful 2018!

Mike