Why lean manufacturing won't make you rich — Part II

Common misconceptions

The FABRICATOR November 2006
March 1, 2010
By: Chris Hoff

Manufacturers often believe at least one of three common lean manufacturing misconceptions. Knowing about these misconceptions and understanding why they're not true will help set you on a path to incorporating lean tools into your manufacturing structure.

lean manufacturing

Every business always has the same goal: to become world-class through everyday changes by meeting the needs of demanding customers who will become more demanding, all in a constantly evolving marketplace.

Lean manufacturing tools can help you achieve this goal. Part I of this two-part series discussed the National Institute of Standards and Technology's (NIST) Manufacturing Extension Partnership definition of lean manufacturing:

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection.

In other words, lean manufacturing is the practice of using only what is needed, when it is needed, in the amount that is needed. This definition is critical to remember when you consider the following misconceptions about lean manufacturing.

Misconception No. 1:
Adding labor resources relieves bottlenecks in production.

While adding labor resources to alleviate bottlenecks in production will help you meet a deadline, it isn't a long-term plan to prevent those bottlenecks. Typically, manufacturers are pressured to meet production deadlines, and this pressure initiates a "firefighting" mode that doesn't allow for adequate root cause analysis. Anytime variation occurs in a process, many production managers don't care why it happened—just how the production line will keep moving.

This perspective prevents managers from taking the time to pinpoint the cause of it and follow a systematic approach to eliminate the variation to prevent future occurrences. If overtime or additional labor resources are the tools managers always use to address a bottleneck, continuous improvement never takes place.

This line of thinking is costly in terms of labor and in lost production.

Many world-class manufacturers create a kaizen—or continuous improvement—team to resolve bottlenecks when they occur. Each time a problem occurs that calls for immediate action, the team responds immediately and works with the operator to document the problem, assess the assignable causes, and provide a short-term solution to keep production moving (which may include adding more resources to make up lost time).

The next day this team meets to review the previous day's problems and keep a documented record of their resolution. The production line keeps moving while the team attacks the root cause of the bottlenecks.

Misconception No. 2:
Lean manufacturing guarantees that new products reach the market in the most efficient amount of time.

Lean manufacturing will reduce the time to get your product to the marketplace, but not at the expense of other goals. For example, think about the design process for a new product. World-class manufacturers won't sacrifice adequate design review just to get to the marketplace quicker. With new tooling, parts, and fixtures come new, additional manufacturing steps that could be avoided otherwise. Lean principles help an organization standardize tooling, parts, and fixtures to save time and cost. Without standardization, additional steps usually are needed, which add labor cost. Without input from the shop floor employees, designs can become too complex and tolerances too tight, thus requiring specialized suppliers and equipment. This extra cost then is passed on to the customer. Eventually the customer determines that the cost is unreasonable and finds somewhere else to conduct its business.

To beat the competition to the marketplace, a company might build a model of its product and then release it to production without completed drawings to accompany the manufacturing process. Suppliers and operators then are forced to improvise and interpret steps in the process that result in bad decisions that become costly due to lack of documented instruction. Time and money then are lost in reworking parts and subassemblies and additional engineering. Although the engineer may promise to complete the drawings afterward, managers often expect to move forward on another new project, and the documentation never is completed.

Operating in this manner can breed a "fix-it factory" culture in manufacturing, which makes it difficult for manufacturing and engineering to work together. It's hard to implement a lean approach in the design phase when this type of culture exists. Radical action must be taken in such an environment.

Efficient use of time in lean manufacturing also means applying design concepts that allow everyone to see the big picture at each step in the process. World-class companies understand that the concept and application of design for manufacturability is cost-effective in terms of parts from suppliers, manufacturing, and warranty claims. They try to see the whole picture of the operation from design to delivery. Design engineers spend time where they are most valued: designing new products.

Boeing is one company that strives to ensure that a design is manufacturable and cost-effective for all departments. Recently Boeing required engineers to move out of their facility and relocate to the shop floor of the manufacturing plant 30 miles away. This kind of radical change has produced synergy between manufacturing and engineering that allows them not only to avoid many of the pitfalls associated with the design process, but also reduce time to market by more than 80 percent.

Misconception No. 3:
The one right way to implement lean is the Toyota way.

Ever since lean thinking principles have been applied to manufacturing as a way to reduce costs, Toyota has been the benchmark. However, one of the greatest misconceptions is that all companies must implement lean methodologies the way Toyota does. The Toyota Production System is so named because Toyota perfected a system that best complements Toyota—not John Deere, Harley-Davidson, or any other manufacturer.

Implementing lean is much like buying new clothes for your kids: You know it's time to go shopping when you realize that they have outgrown their clothes. In business, it's time to grow the operation when the current system no longer meets customer demands.

Not many parents would buy their child a pair of jeans that don't fit just because they were on sale. But manufacturers sometimes force their operations to fit a certain mold because they believe it will help them save money the way it did for Toyota or some other world-class manufacturer. This isn't acceptable. Lean tools can be used in many ways. Lean methodologies provide a systematic way to identify and eliminate waste, but the forms of waste one manufacturer will identify differ from those Toyota and others have identified in their own organizations.

Manufacturers must find ways to use lean tools to meet their own special needs. Companies that realize this can customize lean tools to fit their business model and strategy plan more easily.

Identifying common misconceptions about lean methods will help manufacturers smooth their journey toward becoming lean. To sustain their businesses long-term, this journey must be ongoing.

Lean Manufacturing for Job Shops, Multiple-product Manufacturing

According to the National Institute of Standards and Technology, 99.5 percent of all businesses in North America employ 300 people or fewer and are classified as job shops. Job shops take many custom orders, which can make lean manufacturing an unrealistic strategy for them. Toyota has little variation and a production facility for each product family it builds. This makes sense for Toyota, because it can afford to make capital investments for several different production facilities. But most job shops must send many product families down the same production line under one roof, and usually with limited or no resources. These constraints don't allow for Toyota's style of mass standardization. For this reason, a more creative approach is necessary to use lean manufacturing tools in a job shop.

Toyota's Camry® production facility has one model line dedicated to that model operating at one takt time, or the rate or time that a completed product is finished. But job shops with a high-volume/low-product mix typically build everything under one roof and use shared resources; therefore, they may have to use multiple takt times to apply lean tools.

One recycler/grinder and chipper/flail manufacturer primarily serving the wood products industry did just that. Its products had many options, and its manufacturing facility, constructed years ago, was two separate buildings. Fabrication mostly took place in the back shop, while painting, electrical work, and final assembly were completed in the front shop. Everything was built in different stalls.

The manufacturer performed a product-quantity-routing analysis and discovered that 80 percent of its business consisted of recycler/grinders and 20 percent came from the chipper/flails. The company designed a model line around the recycler/grinders and continued to use the stall-building approach for the chipper/flails offline. However, the front shop still did all of the painting, electrical, and final assembly for both models. This led the company to see that one takt time for the entire shop wouldn't work because employees working in the back shop on the recycler line or offline on the chipper/flails would sometimes significantly overproduce when demand was lacking. This produced a high fluctuation of labor resources and layoffs.

The company decided to employ three different takt times: one for the recycler/grinder line in the back shop; one for the chipper/flails; and one for the front shop, where both machine models merged into one production line. The manufacturer then placed a finished goods inventory between the buildings to create a pull system for the back shop, always leaving one machine in queue for paint to pull from as the back shop replenished the queue.

The end result was a 50 percent improvement in production capacity, a 46 percent reduction in lead-time delivery, an 80 percent improvement in space use, and a 90 percent reduction in work-in-process inventory. This approach also helped the master production planner resolve problems with customizing lean methods to his planning operation. Employees received a quarterly profit-sharing check for the first time in years—without any increase in overall sales.

Implementing Toyota's style of lean manufacturing in a specialized job shop may yield some improvement, but it also would result in mass hysteria and frustration because that method is too limited for a job shop environment. But by learning to find waste and eliminate it in every process, even job shops can customize a system that best fits their needs.

Chris Hoff

Lean Consultant
Value Added
1083 A St.
Springfield, OR 97477
Phone: 541-607-1314

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The FABRICATOR is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971.

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