August 16, 2001
Mastering the flow of work through your shop is your most important taks if you are attempting Toyota's approach to lean manufacturing.
Kaizen—or continuous improvement—is based on the concept that there is always an opportunity to modify, enhance, or improve any process.
For example, Henry Ford's model worked well for decades, but then representatives of Toyota Motor Corp. showed the world that improvement was possible. It's time to ask if the Toyota model is the best one, or even the only one, for creating more efficient production. The idea of continuous improvement leads us to believe that even this near-flawless model can be improved.
If you have ever put on a pair of shoes that are too tight, you might understand how some job shops are struggling to wriggle into the Toyota template. Sometimes they even end up discarding the process because a TPS (Toyota Production System) zealot figuratively force-fit the TPS's well-known "one-piece-flow" shoe onto a foot that needed a little more flexibility than most automobile assembly plants. One-piece flow is a term used to describe the process of manufacturing or assembling one unit at time without building up any inventory between processes.
Toyota disciples scream at the top of their lungs that one-piece flow is the goal for any manufacturing process. Actually, they scream "Takt time, one-piece flow, and pull (T-O-P)!" Takt time is defined as the rate of production. It is calculated by dividing available time by demand. Pull systems are in some cases literal—cars are pulled along an assembly track. But in terms of our discussion, pull means to replenish a stock location only if a unit has been consumed by the customer. But what about fabrication shops? Does T-O-P work in make-to-order environments and job shops?
One-piece flow makes perfect sense when your assembly line makes one car, tractor, or motorcycle at a time. To set up an assembly process any other way would and should send lean manufacturing advocates screaming into the night.
In a job shop, however, where the demand for flexibility within the make-to-order realm is a day-to-day reality, the perfect scenario often ends up looking more like "flow" rather than "one-piece flow."
Flow is being able to stand back and see all material moving rather than languishing in racks or sitting in warehouses. Flow is a more reasonable goal for a job shop than trying to overlay its operation with a production template that was designed for a pure assembly operation. Material doesn't necessarily need to be moving in one-piece flow fashion to be considered moving. One-unit flow, one-pallet flow, or one-truckload flow is a better choice than no flow at all. For example, if a shop has customers 2,200 miles away, it wants one-truckload flow. It doesn't make sense to send, say, 40 pickup trucks full of goods.
Measuring and Defining. How can flow be measured or even defined? How do you know if we are moving toward the perfect flow, in job shop terms?
First, lead times should be no more than 10 times the value-added time. For example, if 10 hours of labor are needed to produce a work order, then the total lead-time that the customer should expect would be no more than 100 hours. This is certainly an aggressive goal, and it takes time for most companies to attain a 1 to 10 value-added ratio. But the longer you wait to get started, the harder the transformation will be. If you wait six months, you'll simply be six months behind where you could have been, not to mention six months behind the competition.
How can you get the entire organization to understand the importance of increasing flow velocity? You have to measure the right things. That which you measure gets improved. If you measure the wrong thing, you reinforce the wrong behavior.
Your company should measure the following variables to determine the effectiveness of its value stream managers:
Are these the right measurements? If not, what are the right measurements?
Focus on Your Goals. Instead of asking "How are managers measured?" perhaps a better question is "What is the goal of our manufacturing process?" An even better question might be "What do we want to happen?"
Regardless of the product or service, the answer to the last question has to be "Get it on the truck at the lowest possible price, within the quality parameters and delivery timelines that satisfy the customer, and get paid a reasonable price for doing so."
Are your manufacturing managers focused on getting it on the truck or are they spending their time performing non-value-added activities such as filling out work center uptime reports and machine optimization studies?
Let's put this into terms that sheet metal people relate to. In an average turret punch machine, there might be 56 tool stations. Your company has paid for each station and each tool in the station, and yet you use only one station at a time. Do you track that? Have you calculated that this situation means that each station is used approximately just 2 percent of the time? Do you lie awake at night trying to figure out how to capitalize and optimize the remaining 50 stations that are not being used?
Of course you don't. So why spend so much time trying to figure out how to keep machines running just because you have them? Shouldn't the question of whether to run a machine be based on whether you can sell a product or get it on the truck?
Consider Your Possibilities. Maybe there is a product that you could get on the truck; instead, it's just waiting in a rack somewhere because you're trying to keep some noncritical operation making noise in case the boss walks through the shop.
Do you think that a racecar team manager stresses out about how many people are sitting around in the pits during the race? He knows how many people it takes to get ready to race and stay racing. It is simply the cost of running an effective race team. But does the manager of that race team have the team run the car at full speed all night before the race or after the race is over? In manufacturing this might be likened to overproduction. It makes no economic sense to produce something that nobody needs or wants just to keep a machine running.
Some alternative metrics to use for measuring a manager's or value stream leader's effectiveness might be:
Focusing on the velocity at which material flows through your shop can help to sharpen your awareness of waste. There is a chemical reaction in the brain that happens once you are made aware of something that you might ordinarily overlook. For example, if your best friend tells you that he/she is looking for a 1965 Mustang® convertible, you will all of a sudden notice every Mustang on the road. It is the same with waste: Once you know what to look for, your brain forces you to recognize it.
If your goal is to speed up the velocity of product, make the issue visual. Try tying red flags to orders that spend more than one hour sitting around without someone working on them. Come up with your own ways to prod employees to action.
The faster material flows through the shop, the more often you can turn your inventory and get paid for your capital investments.
Think of it this way: If you sell water by the bucket, from a hose, there are three ways to get more water out and make more money:
One-piece flow may not be the answer for your job shop, but better flow definitely is.