Lean manufacturing: Where to start?

What follows is the first in a series of articles about a hypothetical—though in many respects, still very real—lean transformation at a custom metal fabricator. It starts by setting the stage, describing what spurs the fabricator to action, and first steps to take. It will follow with specific steps this hypothetical organization takes, and how they overcome challenges, both operationally and culturally.

The phone rings, again. You see the caller ID. It’s a major customer. He’ll probably ask for a favor. Perhaps he’s waiting for a rush job he ordered several days ago? Maybe they’re waiting for a quote? Waiting for a job that’s past due? Whatever it is, waiting will surely be part of the conversation.

You take the call, and sure enough, the customer is waiting for a quote. In fact, he’s threatening to pull his work unless your team can turn around quotes faster. What’s the holdup? Competitors respond in half the time; why can’t you?

You hang up, head over to the estimating department, and see piles of prints everywhere. They’re busy, they say, and these are complex projects. They’ve always taken a long time to turn around. Competitors just aren’t sophisticated. They’re throwing out bids without knowing their true costs. You walk back to your office, call the customer, and, trying to be as diplomatic as possible, tell him he can expect the quote in several days.

You open your email—another major customer complains about a late job. Enough is enough, he says, and threatens to pull his work and go elsewhere. You sigh, then trudge out to check on it. It’s in shipping, just sitting there, not boxed. Shipping workers are busy with other orders. Are those orders as late as this one? Who knows? They don’t know; they’re just doing what they’re being told. The supervisor—a person you know you’ll have a long, strenuous debate with—is nowhere to be found.

You go back to your desk, sit down, open the desk drawer, and pull out your aspirin. It’s going to be another long day.

Reflection

How did things get this way? The shop has been in business for several generations. Things have rolled along for years. Core customers never left, and the shop continued on year after year, decade after decade. But then things started to change. Core customers demanded shorter lead times and smaller batches delivered more frequently. People demanded everything yesterday, and everyone seemed to be just trying to keep their heads above water.

Things need to change—but where to start? It’s a difficult question, especially when things look dire from all directions. Everywhere you look, you see chaos—a variety of disruptions that ate away at the productive capacity of equipment, people, and supporting resources. Besides, you haven’t had much time to think about it. You’ve spent so much time putting out fires, meeting today’s (or yesterday’s) shipment deadlines, and doing everything but leading the business.

It’s obvious that everyone, from the top floor to the shop floor, can’t wait for the end of the day to get away from the plant. When you have a moment to spare, you walk on the shop floor and see front-line personnel working away, rushing from one task to the next. It’s a hard truth: You know they see that leadership is out of touch and inept.

You look at the mess, both in the shop and the office; past the piles of parts, tooling, and equipment lying around in random order; past the grease and dirt on machines. Alas, a busy shop is a messy shop—an accepted reality in this line of work, right? Same goes for maintenance. If a machine breaks, you rush into action to fix it. If it’s not broken, it can produce, and with customers breathing down your neck, some even threatening to leave, you need all the machine capacity you can find.

When your sales team talks to production, they argue, and neither believes the other. The planning and scheduling team swears by the data coming from the materials resource planning system, even though everyone knows the input and reporting data is flawed. So employees in the shop don’t believe the schedule, and work by their own plan.

The result: Sales and customer service don’t have a clue when a job will be ready. Products ship late, and those jobs that do happen to ship on time require a lot of manual interventions and interruptions as people muscle the work through the shop. Of course, interruptions to one job disrupt other jobs. You use (and overuse) overtime, and eventually even that becomes ineffective.

Employees burn out, tempers flare, confidence in each other sags, and turnover rises. But such is life in the job shop. It’s survival of the fittest, and only the strongest prevail—right?

Back at your office, you hang up the phone after making excuses for another late order. You then open the books and find something that you just can’t ignore. Times aren’t slow, yet you see the company’s financial performance eroding.

It’s difficult to identify how margins are eroding. You see the standard costing data. Does this reflect what’s really going on in the shop and supporting processes? In the past people have looked at the data and took what seemed to be good short-term measures, but the reality was that they disrupted operations even further.

The phone rings again. You send it to voicemail. The shop has serious problems, and it’s not a healthy situation. But you’re not any closer to answering that nagging question in your head: Things need to change, but where do I start?

About Serving Customers

You’re tempted to just start somewhere—do something, anything. But you stop, because you know that if you just “start somewhere,” people will spend their valuable time improving a part of the business that ultimately doesn’t change the company’s overall performance. This can be even worse than doing absolutely nothing. After all, your core team is stretched thin as it is. Any change will take time, and people will have to come in early and leave late to pull it off.

You still need to do some preliminary analysis. What are the root causes? What are the real performance drivers? The customer is of course always front and center, so you start your analysis with a question, a kind of litmus test: How does this activity help us better serve our customers?

You pull data, such as performance metrics, shop schedules, operations reports, and work instructions. You talk to various people throughout the company, from leadership on down. You’re seeing with fresh eyes how problems have spread throughout the company.

You put together a team that includes employees from different parts of the business, so all departments get fair consideration; no one should be offended by their assessments. You and your team map out the processes, and you pinpoint the high-level issues that impede performance. You assess whether those problems are related to cost, delivery, or quality. Each leads you in a different direction and influences the deeper operational analysis.

The education begins. Company leaders read books and get familiar with lean strategies or ideas—not to say they can be lifted directly and applied to the operation. No cookie-cutter approach really works. Still, everyone is trained on the basic lean ideas and terminology. You see all this as a foundation to build upon. Education is where any improvement initiative starts.

You build a value stream map not just of shop floor processes, but also quoting and engineering. The map shows real improvement targets that could make a real impact. Then you make a future-state map and challenge company leaders to think outside their comfort zones.

Only then do you pick a pilot project, perhaps setup practices in the press brake department. You get engineers and operators talking about the tools they use, maybe even the tools they need. Are setup sheets complete? Are bend geometries on the print possible with the tooling you have available? Are tools accessible at the right machine at the right time?

At this point the wheels are turning. You know what needs to be improved, and you know the state of readiness in management and the workforce. This forms the basis of your lean strategy and rollout plan.

Clarity and Cleanliness

So now you know where to start—except for one thing. What about the mess? You started your career on the floor, back when the shop was a lot smaller. Still, you’ve known those guys for years. The mess just reflects how they work, right? Same thing goes for the estimators in the office. 5S seems nice and all, but does it help people serve customers better? Does it really make a difference?

But then you observe people. They do indeed spend too much time looking for things, be it the right paperwork in the office or the right tool on the shop floor. That time adds up.

Most important, what about customers? It isn’t likely, but what if they should drop by for a surprise visit? Would customers just assume employees simply have messy work styles?

So you and the team develop some core operating principles, two of which are clarity and cleanliness. Training, documentation, work instructions, and communication practices ensure that people know what to do—that’s clarity. The plant also should be customer-visit-ready at any time of any day. That’s cleanliness.

So now change finally starts. It wasn’t easy. After all, the world didn’t stop, and the phone kept ringing, usually with a customer waiting on the other end of the line. But now everyone recognizes the chaos produced by the long turnaround time for quotes, the late deliveries, and everything else in between. With everyone onboard, you see the wheels of improvement start rolling. Let the lean journey begin!

Jeff Sipes is principal of Back2Basics LLC.