IW Manufacturing Business Challenge: Discussion [Archive]

Sporter@IW

1/9/2007, 04:34 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

JANUARY 2007 CHALLENGE

WANTING TO GET BETTER
Which improvement method is right for us?

Drammer Industries has successively and quickly grown into a North America provider of industrial plumbing systems and components. My brother (the CEO) and I (COO) started the company just a decade ago. We had been on the service side of the business installing such systems, but grew disenchanted with the quality of parts and materials available, and ran with the idea of manufacturing the goods ourselves. Our manufacturing side of the business now dwarfs the service group at Drammer.

As we’ve become acquainted with the many facets and challenges of manufacturing, we have tried to grab as much knowledge and information as possible on how to succeed. Every day, it seems, we encounter a problem that we’ve never seen before. While both of us are engineers by education, many of the improvement and problem-solving tools that we’ve been running across — lean manufacturing, six sigma, kaizen, etc. — are pretty foreign to us. The more we read about these tools and practices, though, the more we realize that we’re letting tens of thousands of dollars slip off our bottom lines. More importantly, some customers have begun pointing out what they believe are excessive quality and delivery problems. From our historical service-side perspective, we think we’re pretty good and better than what we ever encountered — but we now are awakening to the fact that we could do a lot better.

My brother and I are willing to invest time, resources, and energy into improving Drammer Industries. But before we do, we have one question: Which of the improvement tools should we focus on (i.e., which can provide the biggest bang for our buck)?

NO SINGLE SOLUTION
Gain experience with different tools, applying them correctly to problems.
By Dave Strothmann

Congratulations on your success with Drammer Industries. I’m sure you and your brother leveraged a lot of common sense during the last decade of rapid growth. Now you need to continue to learn and use that same common sense as you apply the tools available to solve the problems you encounter….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0107)

RIGHT TOOL FOR RIGHT PROBLEM
Develop working knowledge of many improvement practices.
By Terence Burton

“What improvement tool should we select?” is a familiar question that we often address with organizations. It’s the wrong question. These concepts are nothing more than tools in your management toolbox. You don’t fix a watch with a hammer, and you get the same results when you deploy six Sigma, lean, kaizen, or any other approach incorrectly. A business problem is a business problem, and it needs to be fixed! Understanding the application of the various tools to Drammer Industries’ improvement opportunities is the key to success….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0107)

Dave Altany

1/12/2007, 10:04 AM

I agree with both experts (Dave and Terence) in the advice they offer Drammer. Continuous improvement tools are just that--tools.

What the brothers at Drammer have going for them is that they are actively listening to their customers. Customer requirements evolve and change, which means the areas that need to be improved will continue to shift. If the Drammers keep listening to their customers, and direct their improvement efforts around their changing needs, they'll succeed.

Sporter@IW

2/14/2007, 08:31 AM

mcgillicuddy

2/16/2007, 12:16 PM

Since revenue isn't billed until final sale, I am beginning to feel as if we've only moved our inventory around.
No matter what you do, someone will need to hold the inventory somewhere. There's no way around that.

Sporter@IW

3/13/2007, 04:47 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

MARCH 2007 CHALLENGE

LEAN AND INFORMATION TECHNOLOGY
How and where can IT support our lean strategy?

For three years, I was a manufacturing engineer and led many of the lean manufacturing improvements at Rosanmann Rotors. I was the value-stream manager for all our primary product lines (rotors, rollers, sleaves, and bearings) and, along with great support from everyone in production, I was able to play a big role in getting our manufacturing operations in working order. We’ve still got a long way to go, but gross margins have improved significantly, we’re producing more goods with the same staff and less space, and it’s no longer “manufacturing’s fault” when something goes wrong.

Because of the production successes, I was promoted to the companywide position of director of lean improvement. My new boss — the CEO — wants me to do what I did in manufacturing for product development, supplier relations, purchasing, accounting, customer support, sales and marketing, etc. For three months I’ve been learning a lot about these functions and how they operate. I see the inherent processes involved with each and believe they all can be improved, but I keep running up against an information technology (IT) block: staff throughout these functions insist that new IT would solve their problems, and I can’t tell if that’s true or not.

On the shopfloor, I led lean improvements by visualizing problems with the material flow, balancing work, and creating a level pull to improve operations. But for many of the functions that I am now charged with improving, the processes and personnel extend around the world. Information technology certainly has to be a component of lean as it is applied to these global networks of functions, but I’m quite unsure if I should apply IT, how to apply IT, and when to apply IT. I’ve also come to realize that even aspects of production might benefit by the right overlay of IT, and want a method to evaluate the deployment of IT in that setting as well. Any IT ideas for a “manufacturing guy”?

GRASP THE SITUATION
And then decide what to do and what can help.
By Pascal Dennis

Information technology (IT) can be a powerful enabler — once you have grasped the situation. Failing this, IT can compound an already bad situation. Rosanmann Rotors could easily end up spending money to optimize a lousy process. Remember the cardinal rule of improvement: Kaizen begins with an empty wallet….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0307)

NEXT LEG OF LEAN JOURNEY
Back-office processes can benefit from IT solutions.
By Dave Strothmann

You have heard that lean is a journey, not a destination, and it sounds like Rosanmann Rotors is just embarking on the next leg of the journey toward becoming a lean enterprise — moving lean off the production floor…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0307)

smalkin1

3/15/2007, 11:55 AM

I will recomend you to consider Guided Innovation Toolkit™ Software.

Guided Innovation Toolkit™ web-based software is a synergystic combination of time proven problem solving techniques: TRIZ (Theory of Inventive Problem Solving), Function Modeling (from FAST Diagramming in Value Engineering) and Brainstorming. Guided Innovation Toolkit™ combines these three techniques to let you generate more and better ideas in less time than traditional methods.

Pretium Consulting Services, LLC developed Structured Innovation™ method that can be incorporeted to VA/VE, Six-sigma and lean manufacturing programs.

Structurd Innovation™ begins by maps plant equipment to functions provided by the equipment resulting in a function model of the plant. Pretium has improved FAST diagrams to reveal inherent contradictions and formulate opportunities for system improvement. Function models are more insightful that process flow diagrams. Process flow diagrams describe the sequence of events. Function models reveal cause and effect relationships.

Once the function model is complete, system performance can be enhanced in three ways: 1) improving useful functions, 2) reducing or eliminating harmful functions and 3) resolving contradictions between useful and harmful functions in the system. Inventive principles from TRIZ are combined with system resources to generate ideas to improve system performance in these three ways. This combination comes to fruition in a Guided Brainstorming session.

Unlike other tools which require weeks of training and years of experience to master, employees can be trained in the use of Guided Innovation Toolkit™ in four hours and they can immediately begin to use Guided Innovation Toolkit™’s structured system of inventive principles to generate creative ideas to problems they face every day.

To lean more visit www.pretiumllc.com (http://www.pretiumllc.com)

Sporter@IW

3/16/2007, 10:03 AM

IT solutions come up in office/administrative improvements as if they were a kind of magic wand – merely a wave will solve any problem. On the manufacturing shop floor, this thinking is similar to what I'll call the engineering approach: "What we need is a new machine." Substitute IT programming for new machinery, and you've got administrative/office process solutions.

We know this isn’t true. But in an IT-dependent environment, how do you know without putting the solution in place? How do you adhere to Lean Principle 8: “Use only thoroughly tested technology that serves your people and process”?

Here's a small example of how IT and Lean principles interacted in an administrative/office event:

At a mid-sized automotive remanufacturer, the call center staff was having trouble keeping up with the volume of calls. Business had slowed, and the company wanted to improve call center productivity without adding staff.

The process called for the sales person to:
identify the caller and secure key information,
identify the application (usually vehicle plus product desired)
identify price and availability, then close the sale.

We decided to focus on the amount of time required from pickup to the point that the sales person had enough information to quote price and availability. This part of the call was more standardized and had less variable aspects than the “pitch” that followed, and any improvement would affect every call.

We assembled a team, listened live to actual sales calls, observed and measured activity. We found that the information needed came from some 8-10 different screens. On one call we counted over 120 clicks to get the pricing information! This manic clicking from screen to screen became a nervous habit that continued even when it was unnecessary. We saw application information taken down in notes, then transferred to the electronic catalog look-up (unneeded double handling). Waste abounded.

The solution did require a change in programming, consolidating needed information onto a single screen. However, we first simulated and measured the new process by changing the sequence and content of process steps before changing any programming. After verifying that the new process did achieve the desired results, we began the programming changes. As in shop floor changes, we first mocked up the new screen layout using cut-and-paste screen captures and a simple paint program. Development time and revisions were reduced, and the introduction of the new process and program went seamlessly.

The result was a 40% reduction in time from pickup to price and an 80% reduction in motion (mouse clicking and screen changes). An unanticipated change was a dramatic reduction in stress levels – manic clicking was replaced with a calmer, quieter call with more time to listen to the customer. With attrition, the company now has fewer sales people handling more calls.

You can’t do administrative/office process changes without IT, but the Lean process is the same as on the shop floor – first address the process, then address the technology as a consequence of and support for the improved process.

Submitted by Tan Mayhall, Lean Manufacturing Engineer

Don K

3/16/2007, 11:25 AM

Quote: "No matter what you do, someone will need to hold the inventory somewhere. There's no way around that."

This is true only if you don't actually improve the process. The amount of inventory is dependent on the variability in the supply and demand, and the only way to avoid 'carrying it' somewhere is to reduce the process variability. That is the end effect of the lean process when properly applied.

tektra

3/17/2007, 10:02 AM

To accomplish this, Drammer needs to understand six sigma, lean, kaizen, and other improvement methodologies, and how to integrate these tools into an overall business improvement strategy

Then a new tool invented similar to Taichi.:rolleyes:

Step3 Consulting

3/19/2007, 11:46 AM

In our practice as Lean Implementers for over a decade and a half, we are seeing an increased interest in expanding Lean Concepts to administrative and other non-manufacturing areas. This is exactly the route Rosanmann Rotors is taking on their journey of Continuous Improvement.

In applying Lean to administrative processes, the same key principles of Lean apply. The three foremost process improvement principles in this context are:

Elimination of non-value added activities (waste)
Flow
Customer Orientation

Just as Tan Mayhall pointed out in his posting; IT applications are tools to perform specific tasks in an administrative process. Similar to an evaluation of a machine in a manufacturing process, a specific application needs to be reviewed in the context of the overall process flow, guided by the principles outlined above.

The first step would be a thorough process map of the process. It will identify waste in a number of areas. Below is a selection of types of waste in manufacturing terms and examples from administrative processes:

Motion: Entering the same information into multiple systems, using an excessive number of screens or mouse-clicks
Rework, Scrap, Defects: Incomplete information leading to proposal, product, or service not meeting the customers needs; lack of error-proofing requiring rework downstream
Waiting: extended queues and lead-times through imbalance in cycle times, lack of defined dead-lines causing delays
Over-Processing: Excessive review and approval requirements leading to ‘touch’ of every application or case processes rather than review on exception basis
Transportation: transmission of information across floors, between locations or offices, excessive phone calls and teleconferences.

The lean tools deployed are very similar to the ones deployed on a lean shop-floor implementation:

Creating Cells – combining processes in one person, locating process steps physically adjacent to each other, balancing cycle times to Takt Time including the reassignment of tasks
Standard Work – documented detailed operating procedures and processes, clearly defined responsibilities and accountability
Error-Proofing – structured information flow including mandatory fields, plausibility checks for information, single data-entry systems

Taking this points and our implementation experience leads to a number of comments on how to utilize IT capabilities and evaluate new IT applications:

Utilize existing capabilities: Most standard software applications installed in a business provide the functionality required for a process. However, those software capabilities have not been fully utilized; often through a combination of a lack of training and supporting operating procedures specific to the company’s process. Just like many functions in a Maintenance system remain uncovered, we have seen workflow-oriented tools in a call center software system to be not utilized. A process map will reveal the process’ requirements. Support from IT, the vendor of the currently installed software, and the users will help shape the improved procedures and work-instructions.
Data entry: Duplicate data entry into multiple system can often be replaced through either a data link or a periodical data dump. In one case, we replaced duplicate data entry in an order entry process with a once-a-day data dump, increasing productivity, data accuracy and integrity without impacting the timing requirement of the second system used.
Error proofing: Mandatory fields requiring complete information before a case can be closed or transferred to the next process step, plausibility checks avoiding ‘fat-finger’ type data entry can all eliminate the need for rework and corrections. For example, salesforce.com allows the creation of mandatory fields, without information in those fields a request from the sales cannot be transferred to the next quotation or order entry step.

In applying Lean to an administrative environment, the same benefits of stakeholder involvement, utilization of knowledge resident in the organization, and use of creativity before capital apply just as on the shop floor. With regard to the involvement of IT, this means that improvement activities are focused on the entire process, rather than just adding a new tool to a sub-optimal process. IT staff and vendors will see increased accountability in providing functionality, rather than just an application or a system. This means that for the most part, investment into additional IT will become unnecessary. For those cases where the process mapping reveals a gap in the IT infrastructure; the mapping will also define specific functionality requirements. In either case, service to the customer improves significantly using the existing infrastructure better, and eliminating those process steps that do not add value to the process.

Submitted by Juergen Meyer, Director of Product Development and Training
Please visit us at http://Step3Consulting.com

Sporter@IW

4/11/2007, 12:03 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

APRIL 2007 CHALLENGE

WHAT WENT WRONG?
Equipment company wants to solve problems before they impact customers.

I am the plant manager of Sprucst Equipment’s largest facility, which makes industrial conveying and lift equipment for manufacturers and distributors. We have mostly supplied customers in North America, but over the past five years our overseas sales have grown to about one-third of annual revenue. The production boom in China is helping to fuel our sales and given new growth to this 40-year-old company.

Last week Sprucst missed delivery of two “mission critical” products to two different customers, one of which was a new Asian customer and our equipment was needed for their plant startup. The shipment was delayed by one week, cost them thousands of dollars, and probably ended the promising relationship (they’re building dozens of plants in the next two years). The “apparent” reason for the missed delivery was pretty clear: Our primary stamping press went down “unexpectedly,” requiring us to expedite a spare part from a European warehouse then run a lot of unplanned overtime so that we missed only two customer orders (we were close to blowing a whole week’s worth of orders).

With a little fact-finding and heated conversations, I found out that routine maintenance on the stamping machine had been deferred multiple times over the previous 30 days due to difficulty in coordinating the production and maintenance schedules. Since we’ve picked up a lot of new sales, the production manager insisted that the maintenance had to wait so he could hit the monthly targets, while the maintenance manager grudgingly went along. We run two full shifts and a partial night shift, but the press is almost always in operation. So, it didn’t take a genius to trace the missing deliveries to the press breakdown and, ultimately, to the lack of maintenance.

The maintenance manager and his TPM team (total productive maintenance) usually have been effective keeping the plant running, and they’re OK at tracking down root causes after a problem and suggesting business process changes. But if they can’t see the problem, they can’t find the root cause and fix it, and they’re only a fraction of the workforce. And in the sales and production frenzy, we’re having trouble seeing anything. How can all of us be more proactive about what’s going on with machines and processes, detecting issues before we miss orders?

This month’s Solutions address the equipment visibility and maintenance problem in the Sprucst plant — look for more insights to help Sprucst next month that will tackle the broader issues of developing a problem-solving environment and sustaining business process changes.

FACTORY FORESIGHT
Build in predictable processes
By Darrell Beitel

How can Sprucst Equipment and all of us be more proactive about what’s going on with machines and processes, detecting issues before we miss orders?

We have all had issues with unpredictable events concerning equipment. To start, remember that 100% uptime should not be confused with 100% availability or 100% capability. This is akin to scheduling at or above capacity in any flow manufacturing process. Scheduling preventive maintenance and insuring it is done in the most effective and optimum time is an ongoing challenge in a responsive lean environment. When not done properly it can undermine the throughput capability of the entire process or manufacturing facility as was demonstrated in your case….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0407)

AVOID UNPLANNED EVENTS
Get the real-time information you need to be proactive.
By Paul Boris

Your desire to be more proactive with machines and processes, and, thus, detecting issues before you miss orders is an excellent goal. This is an issue that plagues a lot of manufacturing managers these days. As demands for agility multiply, competition becomes more intense, and all of those “safeties” we’d put in place — buffer stock, overtime, expedited shipment — are viewed as unacceptable added cost, the plant’s ability to absorb unplanned events of any kind has been severely limited.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0407)

mcgillicuddy

4/18/2007, 10:43 AM

Seems like a pretty simple solution to me.

If they're running two full shifts and part of a third shift, pay the maintenance guys overtime and have them come in late one night or a couple of nights.

It might cost a little more now, but when it comes to maintenance, you need to "git 'r done" or it'll cost you a lot more in the long run!

Sporter@IW

5/9/2007, 08:58 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

MAY 2007 CHALLENGE

WHAT WENT WRONG? — PART 2
Equipment company wants to solve problems before they impact customers.

I am the plant manager of Sprucst Equipment’s largest facility, which makes industrial conveying and lift equipment for manufacturers and distributors. We have mostly supplied customers in North America, but over the past five years our overseas sales have grown to about one-third of annual revenue. The production boom in China is helping to fuel our sales and given new growth to this 40-year-old company.

Last week Sprucst missed delivery of two “mission critical” products to two different customers, one of which was a new Asian customer and our equipment was needed for their plant startup. The shipment was delayed by one week, cost them thousands of dollars, and probably ended the promising relationship (they’re building dozens of plants in the next two years). The “apparent” reason for the missed delivery was pretty clear: Our primary stamping press went down “unexpectedly,” requiring us to expedite a spare part from a European warehouse then run a lot of unplanned overtime so that we missed only two customer orders (we were close to blowing a whole week’s worth of orders).

With a little fact-finding and heated conversations, I found out that routine maintenance on the stamping machine had been deferred multiple times over the previous 30 days due to difficulty in coordinating the production and maintenance schedules. Since we’ve picked up a lot of new sales, the production manager insisted that the maintenance had to wait so he could hit the monthly targets, while the maintenance manager grudgingly went along. We run two full shifts and a partial night shift, but the press is almost always in operation. So, it didn’t take a genius to trace the missing deliveries to the press breakdown and, ultimately, to the lack of maintenance.

The maintenance manager and his TPM team (total productive maintenance) usually have been effective keeping the plant running, and they’re OK at tracking down root causes after a problem and suggesting business process changes. But if they can’t see the problem, they can’t find the root cause and fix it, and they’re only a fraction of the workforce. And in the sales and production frenzy, we’re having trouble seeing anything. How can all of us be more proactive about what’s going on with machines and processes, detecting issues before we miss orders?

Last month’s Solutions specifically addressed equipment visibility and maintenance problems at Sprucst. This month our experts tackle the broader issues of developing a problem-solving environment and sustaining business process changes

PAY NOW OR PAY LATER
Take steps two steps toward long-term quality and asset availability.
By David Caruso

Sprucst is experiencing a critical challenge that many manufacturers face: Balancing the desire for maximum output in the short term with the need for longer term quality and asset availability. On the surface it would appear that Sprucst merely gambled on a single decision and lost. Unfortunately, this decision was made without insight to its impact on customer satisfaction or future opportunities, and it also was made with incomplete data — and it could likely happen again….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0507)

LEVERAGE TEAM, TALENTS, AND INFORMATION
Informed workforce can solve problems instead of applying fixes.
By Paul Boris

Last month we got a brief look at the issues you are facing at Sprucst: Demand on assets (people, machines, etc.) is up due to an influx of new business. In the rush to make sure you take advantage of these opportunities, some issues slipped through the cracks. On one occasion, the issues that slipped — maintenance of a critical asset and the accuracy of spare parts inventory — resulted in a major disruption and potential loss of a promising new customer.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0507)

buddy

5/9/2007, 10:30 AM

Anyone have problems with Federal Express charging high rates on International shipping overnight? I was charged $4,200(business class ticket to Europe is $3,000) for two boxes of parts for my plant. I have found that Federal Express has raised their rates to the point that they are not competitive any longer. I complained to Corp about the charges with comparsion rates from other carries and they told me that is the charge and to pay it.
Price caution should be used when using Federal Express for International shipments.

Guy Woods

Sporter@IW

6/14/2007, 01:42 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

JUNE 2007 CHALLENGE

AT A LOSS WITH LEAN
How did real improvements turn into financial failure?

After three years of tremendous effort by my leadership team, all our production employees, and me — the director of manufacturing — we’ve turned an unstable manufacturing environment into a model of efficiency. That’s literally true, as publicly held Dredlark Drums has received many regional business awards and accolades from our customers in the last year.

Rebuilt around lean thinking (strategy deployment, root-cause problem solving, kaizen, etc.) and tools (one-piece flow, quick changeovers, just-in-time delivery, etc.), Dredlark has shrunk inventories by 80%, reduced our production footprint by 20%, and completely phased out older bottleneck processes and machines. It’s not unusual today for raw material to come into the facility in the morning and leave the plant that night as metal industrial containers, drums, and boxes — our daily on-hand inventory is nearly $47,000 dollars less than it was a year ago!

So imagine my shock when the CFO called me into a meeting with the CEO last week, during which he encouraged us to pull back on our lean efforts for a few months. I looked at the CEO, who sheepishly nodded his agreement. My head was spinning as they talked about variances, fixed and variable costs, and asset utilization. Trust me, I know all about “the numbers” and bean-counter reports — but I also thought both executives were on board with lean and recognized that some cost-accounting measures would need to give preference to lean management principles. Now they’re bailing on me and hundreds of hard-working employees.

My bosses are taking their marching orders from the board of directors, but I’m holding out some hope that I can pull together a convincing argument — improved cash-flow, increased sales per employee, capacity waiting for new products and markets — that can get them to see the short-sighted error of their ways and the damage they’ll do to Dredlark.

UNDERSTAND IMPACT AND MAXIMIZE BENEFITS
Lean accounting tools reveal financial implications.
By Brian Maskell

The problem at Dredlark Drums is very common among companies starting the lean journey. There is often an expectation of short-term cost reduction and improved profitability. While lean is (currently) the low-cost method for manufacturing products and providing services, these benefits rarely come in the short term. In fact it is likely that your company showed negative results in the first months and years of lean transformation. Most companies do.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0607)

CREATE CASH-FLOW PERSPECTIVE
Reveal profitable growth through freed-up capacity.
By Dave Strothmann

In years of working with lean practitioners, I have heard this story repeated time and again. Dredlark Drums has made significant operational improvements, but because these improvements don’t show up in the company’s financial statements the merit of your lean program is being questioned. In many cases there is actually a short-term reduction in profitability shown in traditional financial statements because of the impact that the dramatic reduction in inventory has on the balance sheet.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0607)

Sporter@IW

7/11/2007, 11:27 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

JULY 2007 CHALLENGE

LEAN WON’T WORK
It’s pulling profits out of our plant.

I am the president and owner of Prannt PLC, a maker of programmable logic controllers used in industrial machinery and integrated assembly lines. About one year ago, my plant was profitably serving more than 200 customers across the globe and expecting revenue growth of 5% to 10%. We were a decent manufacturer, but we needed a way to be more productive and get more from our people and plant.

So the plant manager and a team of department managers delved into lean manufacturing — they read books and workbooks, attended conferences and workshops, played various lean simulation games, and brought in a few gurus to look around. They were convinced — and they convinced me — that the plant could improve significantly if we began mapping our value streams, pulling work through the plant from the customer back, and working in small lots with highly organized systems to move these components and materials around the plant.

It’s been more than six months since we’ve transitioned our plant over to lean value-stream management, and things look great: 5S housekeeping has cleaned up all areas and makes the place shine; piles of inventory that used to crowd the plant have been reduced and moved into supermarkets; highways are marked everywhere through the plant and material handlers whip back and forth through the colorful grid; visual displays show all our daily goals and outputs; and everybody seems so much more organized.

Looks however are somewhat deceiving. Our operational and business results are no better than before:

With less inventory on the floor in finished goods and WIP we are having a harder time shipping product on time to the customer.
Any sort of equipment downtime ripples back through plant, like a domino toppling over production schedules in all departments. The same is true for quality problems as well.
Operators have been given the power to stop the line, which they do frequently instead of figuring out how to fix anything.
All performance measures — quality, delivery, customer satisfaction — are now down, and, even with the reduced inventories, per-unit manufacturing costs have not improved and are slightly worse. How can that be?

The bottom line is that profitability is down, customers are leaving, and I haven’t seen an inch of freed-up capacity; sadly, we don’t need capacity now. What can I do, including tossing out this lean mumbo jumbo, before the whole company goes in the tank?

RESTART AT THE BEGINNING
Develop a PDCA approach to lean improvement.
By Art Smalley

This description is unfortunately a pattern I hear and see all too often these days. Without actual data or observation it is difficult to assess the situation properly, but I can offer some general insights from similar cases I have witnessed. There could of course be significant financial factors or leadership issues involved here as well, but I will focus in on the more typical operational topics I tend to observe.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0707)

KEEP THE FAITH
Problems are a sign of improvement in the making.
By Thomas K. Wright

It’s as tough — and dangerous — to diagnose and prescribe based on a few reported symptoms in a manufacturing context as in medicine. But it’s our job, so we’ll try. Not having been involved in the lean implementation at Prannt, one doesn’t know how deeply into their culture lean has been accepted, but there are several — and we hope not too obvious — observations to be made..…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0707)

adambetcher

7/11/2007, 02:22 PM

"Stay the Course" or "Start from the beginning" are both recepies for putting the business out of business. Lean has the same challenges that re-engineering always had. It is very expensive because you are trying to improve everythign at the same time. It is kind of like buying a new car because you have a flat tire. Lean improvements can be very effective if applied in a focused manner on the points where it is needed. The first thing you need to understand is "There is no such thing as a truly balanced line" Different machines and different processes have different production rates. If you have implemented Lean, then you are probably using a Kanban single piece flow model. Spend some time looking at your line and find out which station is waiting most of the time. Then look at the previous step and you will find a station that is constantly trying to catch up. This is your slowest station. Your slowest station sets the production capacity for your whole line which means that every minute it is not working, is a minute lost from the company. So, change your rules to accept a few more jobs in the queue before this station. You will have to decide this for yourself, you want enough jobs so that even if the upstream stations stop for a while, this station will always have work. Once you play around with it a while, you will find the minimum number of jobs to make this possible. Then spend some time looking at your slowest station. Do the people take breaks? "Find someone to stand in during their breaks" Does the machine break down? "Devote your highest priority to getting and keeping this station running". Every other station will be able to catch up. Now watch this station becasue the maximum output of the slowest station is the maximum capacity of your shop. And you can improve your total capacity by improving the capacity of of your slowest station. You will now be able to predict with better accuracy when you can deliver to customers and you can have a clear focus of where to apply your improvement dollars.

Your Pal

Adam. :-)
www.theregularguys.com

Michaelkirk

7/11/2007, 07:40 PM

Just looking at the information provided, I would agree that an evaluation of the process used to implement Lean must be made. Lean, like any other tool, requires the user to properly define the problem and then apply the right tool. While not fully understanding the situation and what forethought went into the implementation, I question whether the issues were understood and whether the efforts were focused on addressing the "bottlenecks" which prevented the business from improving it's performance. If the issues were properly defined and prioritized, and lean was the right tool, I would expect to see a positive bottom-line impact. My recommendation would be to put lean in your "toolbox". Determine what performance measure(s) require improving. Review your processes impacting that/those performance measure(s), determine where the bottlenecks to those processes are, determine their impact and prioritize them in order in which they are to be addressed. Then based on the individual issue determine the best "tool" for usage, RCFA, Six Sigma, Lean, etc... or a combination. Then work the priority list, frequently reviewing the list to ensure it fits your current business need.

dreck

7/16/2007, 09:24 AM

This is typical when lean is implemented as an incomplete set of tools.

You are doing some lean, maybe well in some cases but not well if you are having machine breakdowns and constant line stoppages because of quality.

I would also suspect that you are not really pulling production either, but this wasn't mentioned.

You did all the easy stuff, now you need to show conviction to the transformation (lean is a cultural shift more than anything) and start fixing all of the problems that you have never fixed but were covered by the excess inventories you kept. I'd suggest reading The Toyota Way and The Goldmine...both easy reads and will show you that this is a big system and more than just a few easy tools to implement.

Sporter@IW

8/8/2007, 10:57 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

AUGUST 2007 CHALLENGE

MOVE TO MES?
Will a manufacturing execution system advance existing IT?

As the COO of Terreeni Finishes Inc., it’s my job to be open to new ideas on how to improve plantfloor operations. Terreeni develops, manufactures, and applies heat-treatment finishes for industrial, construction, and agricultural applications. So I wasn’t surprised recently when my continuous-improvement (CI) team returned from an industry seminar on plantfloor automation hell-bent on installing a manufacturing execution system (MES) — while not surprised, I am cautious.

Terreeni is a 40-year-old, equipment-intensive operation on the plantfloor. Starting with the company founders and through the years, we’ve patchworked together a lot of proprietary chemistry, machining, and information technology. Companywide we installed an ERP system three years ago, but at that time we took a modest approach when it came to tapping into plantfloor activities. I took the MES idea to our senior management team, and those guys hit the roof. The ERP guys also are upset and think we already have that capability — little do they know what’s really going on down on the plantfloor. And I, too, am concerned that we might be buying an expensive system that we don’t really need.

My CI team is convinced that this “last leg” of IT can deliver countless incremental benefits across our production activities, order entry to finished goods, and help us improve our operating margins and cashflow and performance to on-time delivery, inventory turns, and quality. Because our chemical baths and plating, coating, and testing processes are highly regulated, MES might also provide valuable compliance documentation for the company.

I’m not sure that either the CI team or the ERP guys have all their facts straight, and I’d like to get a sound perspective of what we need and where we could start. What is MES all about, and can we improve operations without spending a lot of time, money, and energy hashing this out through meeting after meeting?

MAKE MES IMPLEMENTATION MANAGEABLE
First define the type of MES system that’s really needed.
By Paul Boris

It’s good to see that your continuous-improvement (CI) teams are looking for innovative ways to drive performance on the manufacturing floor — focusing on improving your technology infrastructure can deliver big gains if done properly. But you’ve struck at the heart of the biggest challenge to moving forward.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0807)

THINK BEYOND THE MES BOX
Should you fix the problem or the symptom?
By John E. Boyer

First, some background and definitions are in order. A manufacturing execution system (MES) is typically an add-on to an ERP system. Its function is to establish and maintain work-order dates and operational dates based on capacity considerations and constraints. A work-order date is the date that the work order must be completed, and operational dates are the dates that individual operations specified by the item’s routing must be completed to meet the work-order date. An MES usually offers two basic scheduling techniques (forward and backward) and two capacity assessment techniques (finite and infinite)..…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0807)

Sporter@IW

9/13/2007, 12:12 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

SEPTEMBER 2007 CHALLENGE

No Standards and No Time
Lack of consistent methods driving facility into chaos.

I was thrilled to be named plant manager of Grospek Grommets four months ago. I have always wanted the responsibility of leading a production facility, and was eager to land this position even though the company was going through a “tough period.” It seems like I’ve been here four years.

While Grospek products have performed relatively well in the market and the six-year-old company at one time had been profitable, I am appalled by the lack of industrial fundamentals throughout my facility (the only plant in the company):

No standardization: I can walk to any function in the building, and I’ll never see two operators perform a task the same way; not even close. Additionally, there are no common approaches to even the most basic activities that all employees take part in (e.g., lunch starts whenever; some departments have shift meetings while others don’t; safety signage is hit or miss from department to department).
No responsibility: I’d give $100 to the first operator or manager that says, “That was my fault.” No one takes responsibility for screwups, and, the bigger problem, most of these folks truly don’t believe it was their responsibility. We’ve got so many gray-area handoffs from process to process, it’s frightening.
No leadership: At the department and frontline leadership level, no one is trying to correct the problems. As long as they can somehow make their monthly numbers — which are really soft targets — they’ve resigned themselves to firefighting, screaming, cajoling, or often hiding. I think a number of managers care, but they’ve been beaten down and have given up on making real change.

I like a challenge as much as the next guy, but this production chaos is killing me and Grospek. Losses have piled up the last three quarters despite modest sales increases. Labor turnover is through the roof, and injuries are far too common. OSHA and EPA violations are commonplace. Please tell me that there is a quick way to get some kind of order on the plantfloor and get every one the same page (or even reading the same book).

FOCUS ON FRONTLINE MANAGEMENT SKILLS
Address industrial fundamentals.
By Patrick Graupp

Unfortunately, your bad experience at Grospek Grommets is not uncommon. As you correctly point out, the “lack of industrial fundamentals” holds down everything we may try to accomplish in a production system and it is amazing, given all the effort that companies put into trying to improve, how basic fundamentals are so often overlooked. This may indeed be an underlying cause as to why so many companies struggle to obtain and sustain good results from their efforts at using lean and other improvement initiatives.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0907)

CREATE A CULTURE OF IMPROVEMENT
Answers not as obvious as they seem.
By Pete Winiarksi

On the surface, the answer to your problems at Grospek Grommets seems obvious. And the solution might be to:

Begin a kaizen program and involve operators in improving their work areas.
Get standardized work in place.
Train operators, monitor trained operators, and reward those that follow the standardized process and achieve expected output….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0907)

Jeff Mohr

9/13/2007, 02:58 PM

Great job Patrick!

Sporter@IW

9/14/2007, 09:50 AM

Both proposed solutions have merit and will make a difference in the day to day activities. An alternative solution that incorporates some of the features of both solutions would be to utilize the Value Stream Mapping (VSM) technique. Utilizing VSM will allow the facility to focus their efforts in the area that will have the largest impact on improving the overall performance of the facility. The benefits from utilizing a VSM correctly can be summarized in the following bullet points:

Selects the highest impact areas for improvements
Involves all levels of operators and managers
Develops a sense of ownership
Creates a common language and communication methodology – process oriented
Supports both short and long term project plans
Combines kaizens, standardize work, 8W’s, 6S and other improvement tools into a strong plan
Shows the critical linkage between material flow and information flow
Identifies waste with in the process
Creates a visual process map that is easily understood from order entry to shipping
Utilizes sound data collection techniques that lead to highly informed decisions

We can look at proposal solution one and see three major areas of the improvement plan:

Standardization
Responsibility
Leadership

The three is easily addressed through a Value Stream Mapping process as the VSM highlights waste and improvement opportunities which then can be assigned to the group for improvement. This will create responsibility and highlight future leaders.

Proposal solution two incorporates several of proposal one’s areas for improvement. With a closer look at solution two we can see how the VSM would address the areas for improvement.

Diagnose your issues, prioritize your action plans
Build a responsible leadership team
Model desired behavior
Be aggressive on obvious answers

The benefit of a VSM is it does and excellent job of diagnosing your issues and prioritizing action plans based on waste elimination and process flows. Coupled with its ability to lead you too the areas of highest impact the VSM is a powerful tool. Similar to solution one, the VSM builds responsibility and leadership by task assignment and task completion. Desired behavior is developed around process improvements with the use of sound data collection techniques, problem definition and solution finding. If an obvious answer is readily available the short term and long term planning tool with in VSM is quite capable of taking advantage of a quick improvement.

Submitted by Jess Paxson - Flowserve Corporation

Sporter@IW

10/10/2007, 03:20 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

OCTOBER 2007 CHALLENGE

Beyond Our Four Walls
Ready to extend lean throughout the supply chain.

Trauble Enterprises implemented lean manufacturing principles about five years ago, and we have seen substantial results and ongoing improvement on the floors of our three plants, each of which makes precision-stamped products for industrial markets. With an initial lean focus on customer demand, we’ve improved quality and timeliness to customers and added a number of value-add product and service features that have helped us boost per-unit profitability. In short, we’ve now got stable, predictable plant operations. But we want more profit, for Trauble and our supply chain, and have begun looking beyond our four walls for process improvements and cost savings.

As we begin to take lean to the supply chain, we’ve identified a number of problems, most due to a significant lack of information sharing. In the past we’ve asked our direct suppliers to be a bit more responsive to our inventory needs — just-in-time, right amount, right-sized containers, etc. — but it’s always been a battle. They’re afraid to leave us in short supply (but don’t make much effort to understand what we really need), and so we end up with raw-material buffers larger than necessary. We’re also certain that our suppliers have finished-goods buffer that are too large for their own good, and subsequently down through to their suppliers.

In addition to inventory buffers, lack of effective communication and collaboration from supply tier to supply tier is resulting in scrap and rework (ineffective communication of ECN data), premium freight (schedule variability outside of ability of buffer to resolve), and overtime (capacity buffer, the cure for all ills). Additionally, there has been no attempt to rationalize the skills throughout our supply base and eliminate redundancies.

What the CIO and I (COO) want to establish is more trust, collaboration, and sharing of information on a real-time basis all the way back upstream in the our supply chains, encompassing the dozens of direct suppliers and hundreds in total. Similarly, now that we have the trust of customers that our quality products are getting to the right place at the right time, we want to work downstream with customers to dampen (rather than amplify) their schedule variability.

We want to enable lean across the supply chain, not just within our four walls, and believe we have the internal credibility now to drive that message home with suppliers and customers. Where do we start?

START AT THE TOP
Build trust and establish enterprise-to-enterprise relationships with all supply-chain partners.

By John Chalifoux

Where do you start? Start at the top.

It is great to see the progress you have already made at Trauble Enterprises within your four walls. And with your conviction to achieve more, it is likely your success is just beginning. What’s really impressive is that you have buy-in from the top. As the COO at Trauble, you already have your CIO on board and, I imagine, the rest of the leadership team as well. In your quest to establish more trust, collaboration, and sharing of information with your supply-chain partners, I suggest you take the message to their top executives too.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1007)

REDUCE VARIATION UP AND DOWN THE CHAIN
Work with customers and suppliers to minimize “bullwhip effect.”

By Thomas K. Wright

Kudos to Trauble for your progress to date, and for a focus on continuous improvement that recognizes that while a lean factory is one component of the lean enterprise, it is not enough. Most readers will have their favorite anecdotes of where focusing on lean at the plant level can, in fact, be counter-productive to the enterprise as a whole, just as focusing on one work center within a plant is flawed….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1007)

Sporter@IW

11/14/2007, 10:49 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

NOVEMBER 2007 CHALLENGE

MAKING, MOVING, BUT BARELY MANAGING
Looking for distribution practices that satisfy customers and improve profit.

Makleeng MRO provides air and liquid filtering systems and filters as well as an assortment of MRO products to industrial plants throughout North America. We produce about a third of our goods at two Midwestern plants, but source the remainder from suppliers in the U.S. and overseas. Both manufactured and sourced MRO components move through three regional distribution centers, all of which are busting at the seams and have been temporarily supplemented by dozens of storage trailers out in their parking lots.

Rapid growth has created most of our problems — which is good — but in the process of keeping up with incredible growth we’ve lost control of our distribution practices. For example, many customers are asking for a wider variety of SKUs, would like us to begin kitting materials, and would prefer more frequent but smaller deliveries from distribution centers. Currently, we are not organized to kit or bundle materials together (the DCs are organized solely by SKU and not by end-customer need), barely able to keep up with currently delivery schedules, and would need a massive capital investment to house a wider variety of products.

The view of distribution from upstream has become equally muddied and, I fear, counterproductive to our customers’ needs. For example, our buyers are increasingly cutting “great deals” for low-cost, high-volume freighter loads of material that sometimes don’t jibe with our market forecasts. I also am bothered at how supplies come to us and then move to customers; I was recently told that we’ve had truckloads of materials coming from shipping docks on the East Coast while trucks of similar materials moved eastward from our distribution center to customers in that region. What can we do about these “ships passing in the night”?

Makleeng is making, moving, and selling lots of stuff, but how can we better manage our inbound and outbound logistics, take a real-cost perspective of what we buy and ship, reorganize our warehouses and internal practices to free space, and, ultimately, better serve our customers?

LOOK TO LEAN TOOLS
Increase distribution efficiency and services levels.

By Bob Hawkey

Many of the problems that you have described are the natural result of rapid growth where the organization is struggling to provide required customer service levels with a supply chain lacking the scalability and flexibility necessary to respond to various customer needs and requirements. Based on Makleeng’s situation, a number of simple lean tools and disciplines can be deployed to dramatically increase distribution effectiveness and quickly improve poor service levels.…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1107)

GROWTH AND CONTROL
Many opportunities to improve distribution in and out of warehouses.

By Dave Strothmann

You have described several problems related to your growth and ability to control and manage the Makleeng business. While there could be several factors contributing to your issues, it seems to me that you need to quickly focus on your demand-to-fulfillment and cash-to-cash cycle times. As for the excess inventory accumulation, details were limited, so I’ll assume a few conditions as I offer a solution….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1107)

Sporter@IW

12/12/2007, 10:04 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

DECEMBER 2007 CHALLENGE

ON A LEAN ISLAND
How can we pull suppliers into lean?

I love our suppliers (most of them), and they’ve helped grow Neftserm Pneumatics from a small, family-owned operation into a company with revenues of more than $240 million that supplies the largest manufacturers around the world with state-of-art pneumatic systems and components. While Neftserm has gotten progressively leaner over the last decade — improved our productivity, slashed wastes of all sorts, and realigned operations to truly focus on the customer — most of our approximately 300 suppliers continue to do business as they have for years, making decent products but stumbling along with old approaches to their work.

The vast majority of our suppliers lack lean practices and most refuse to try, and our inability to closely integrate their operations — from sales and development through delivery — into our lean efforts has hurt us in multiple ways:

Most suppliers don’t accommodate our lean delivery needs — small lots, just-in-time or on frequent milk runs, in right-sized containers, etc. — which forces us to deal with their unlevel loads and excesses.
Automated systems connect us in real-time to customer demand information downstream, but when we turn upstream we’re barraged with paper and faxes, making it impossible to efficiently manage demand aggregation, purchasing, and project planning.
When we try to tap innovation opportunities and pull suppliers into product design meetings with customers, they frequently fail to attend (especially suppliers that are larger than us).
Our prices to customers have gotten progressively lower despite putting more value-add into the products and services we provide, but we’re still locked into an “unlean” supplier costing mindset when it comes to the prices we pay (i.e., they still live by cost + profit = price).

How can Neftserm develop and integrate a leaner supplier base — even if it means saying “goodbye” to some suppliers — and establish service and pricing structures that reflect lean practices and performance rather than us paying for their waste?

NEW SUPPLIERS, NEW RELATIONSHIPS
Filter through supply base to find lean providers.

By Bob Hawkey

Neftserm clearly is experiencing the common ailments of migrating lean disciplines upstream into their supplier community. Requiring enterprisewide implementation for total waste removal (and therefore maximum benefit), it would appear that Neftserm has come to realize that the status quo has to change in the direction of supply-chain flexibility based on customer demand, not static supplier capabilities:…

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1207)

LOOK FOR WIN-WINS
But be willing to replace suppliers that won’t adapt to your needs.

By Dave Strothmann

It is not easy for small- to mid-sized manufacturing companies to control their suppliers as they are often not the channel master in their supply-chain ecosystem. Your total spend with these vendors may only equate to a very small portion of their overall business. Large companies like Wal-Mart and Home Depot are in a unique position to dominate their supply chain; they can create mandates for vendors to follow that are designed to improve the overall effectiveness of their ecosystem and, ultimately, benefit most participants. Unfortunately you are probably not in such a strong position….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/1207)

Sporter@IW

1/9/2008, 09:20 AM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

JANUARY 2008 CHALLENGE

SALES PLAN OF ATTACK
Getting sales strategies and systems to align with operations strengths.

Rapiduxe Power Systems has been providing heavy-duty motors, motor assemblies, and components to industrial, construction, and agricultural markets for more than 25 years. It’s a good business in that rarely have customers in all of our major sectors experienced a down market at the same time; in total we have about 230 customers across the three markets. And while it’s good that we know that a good percentage of customers will want our products over a given period, we really haven’t tried to get a better perspective of our customers’ orders or their ordering habits.

When we ran “fat” and kept large finished-goods inventories, lack of sales visibility was not a concern. Less than 5% of our work is customized, and so even a last-minute order was easy to accommodate — we just pulled it off the shelf. But over the last five years, Rapiduxe has progressively gotten lean in our facilities and worked to whittle down raw material, work-in-progress, and finished-goods inventories. Doing so has freed up cash flow and funded expansion, but it has created delivery problems on more than one occasion when a surge of orders nailed us.

We want to put in place better sales and operations planning (S&OP) processes and systems to communicate that information, and do a better job of forecasting customer demand (and forecasting our customers’ customer demand). That will be challenging, but what we expect to be equally difficult is working with our sales and marketing staff to better manage their promotions, incentives, and behavior. We’d also like them to explore value-add, higher profit opportunities (i.e., with lower inventories and a more advanced workforce via lean, we’re capable of customizing more product, which all of our customers increasingly ask about). Our sales guys are the best around, but they’ll create deals on the fly that can bottleneck us for weeks and, I suspect, might not be as profitable as everyone thinks.

How can we get our S&OP process and systems off the ground, and do it in a way that takes best advantage of our lean operations capabilities and our excellent sales staff?

“CLEAN” DEMAND
Building trustworthy connections through the supply chain.
By Bob Hawkey

Rapiduxe Power Systems, like many other progressive organizations, has come to the realization that supply-chain planning (think capacity allocation and costing) can only be truly successful if “clean” demand signals are seamlessly communicated upstream across all functions of the supply chain, including distribution operations, manufacturing, transportation, and suppliers….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0108)

COHESIVE S&OP
Link planning to the rest of the organization.
By Dave Strothmann

Rapiduxe Power Systems is on a continuous-improvement journey upon which many lean companies embark. You have eliminated waste in your operations and now are starting to view the bigger picture of the entire supply chain. A solid sales and operations planning (S&OP) process is a key element to improving the performance of the overall supply chain….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0108)

Sporter@IW

2/13/2008, 03:19 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

FEBRUARY 2008 CHALLENGE

ANOTHER TRY AT LEAN
Looking for the source of repeated failures.

Clarktings Connectors is a manufacturer of standalone and assembled fluid-control and connector components used in industrial, agricultural, and construction equipment; some of our many SKUs are quite complex, such as electric accuator assemblies and valves, while others are simple piping connectors. We’ve got hundreds of customers around the world, producing enormous volumes of product from two plants. In short, we’re a pretty classic subject for lean manufacturing and six sigma improvements. That’s the good news.

The bad news — and my challenge as incoming COO — is that many lean initiatives have been tried throughout the plants in the last five years. Some have been narrow in scope (a kaizen event targeting an equipment changeover) and others have been broadbased (a big 5S initiative in which all departments were instructed to get on board). Some of the lean work did provide initial improvements of a limited scope, often due to strong-willed operators pushing through changes, while others have actually hurt some plantwide performances and caused problems in adjacent areas and processes. It’s truly been a patchwork of improvements, and, today, five years later, Clarktings Connectors’ dashboard of operations and financial performances is essentially unchanged.

I know lean works. And I know six sigma works for the right problems. I’ve worked in plants that have the processes and bottom lines to prove it. But I’ve never been asked to lead a lean effort, especially in an organization with a history of lean disappointments and now a cynical eye toward another try. Why did past lean and six sigma efforts fail, and how can I avoid making those same mistakes?

FOCUS ON BUSINESS EXCELLENCE
Begin with a deployment and implementation strategy.
By Terence T. Burton

There are two major issues with Clarktings Connectors’ lean improvement initiative.

First, you are missing a deployment and implementation strategy for improving your business. It takes a huge, long-term commitment to define and organize a strategic improvement initiative and then integrate strategy, leadership, execution, the right improvement methodologies, and permanent culture change. Most organizations do not have the internal expertise to do this without making a lot of mistakes and losing critical time at making step-function improvements within their business. This random sprinkling of lean tools is a guarantee for a short-lived, flavor-of-the-month program. Targeting in improvement efforts on the highest impact opportunities, and then deploying the right improvement methodologies is the key to financial performance and sustaining success….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0208)

LEAD BY EXAMPLE
Use and commitment to lean tools can grow into trusted deployment.
By Thomas K. Wright

Many organizations are littered with the artifacts of failed attempts at lean and six sigma, and they generally are the same companies littered with the earlier relics of theory of constraints, quality circles, activity-based management, business process reengineering, moved “cheese,” and other all-too-often-faddish management “revolutions.” Given Clarktings’ business description, I’d bet money that everyone was reading “The Goal” and looking for Herbie back in the 1980s….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0208)

Sporter@IW

3/12/2008, 04:11 PM

This is an excerpt from the IW Manufacturing Business Challenge, a monthly custom e-newsletter sponsored by SAP. Click here (http://www.iwchallenge.com/subscribe1/default.aspx?pc=IWFORUMS) to learn more about this free newsletter or to subscribe.*

MARCH 2008 CHALLENGE

BULLY FOR LEAN
Forced to get IT involved with lean.

I have been the CIO at Dracklebob Electronics for 15 years, and during my tenure I’ve established information technology (IT) systems that enable us to efficiently run a global corporation (Dracklebob supplies electronic controls systems for industries in 45 countries), connect to the supply chain, and close our books and report financials in an orderly and timely fashion. In addition, three years ago we successfully implemented ERP and did so on time and on budget.

Pretty basic, solid work for an executive in my position. This performance doesn’t warrant congratulations, but it does warrant respect. Or so I thought.

Last week the new COO (hired nine weeks ago) and the CEO stormed into my office, demanding that IT — me, my staff, IT processes — needs to get quickly on board with new lean initiatives that will soon roll out throughout Dracklebob. The COO contends that in previous assignments he’s run up against too many CIOs who throw up obstacles and hurt lean, and, to my surprise, the CEO said that any such behavior on my part would not be tolerated. I quickly got defensive, the COO got aggressive, but eventually the CEO restored a little order and we tried to get the whole lean conversation back to square one. They both then tried to make the case for lean to me, but I could not focus on specifics, thinking that somehow I’m already the problem.

The COO’s rough start aside, I’m willing to get behind anything that is good for Dracklebob, but I still don’t understand how IT plays a role in a manufacturing improvement methodology.

* The Challenge incorporates hypothetical persons, companies, and products and does not portray the actions of any actual persons, companies, or products.

THE CRITICAL HORIZONTAL PLAYER
IT can connect lean across the company and to the global supply chain.
By Jean Cunningham

Lean is not just something you do in manufacturing. Lean is a concept. And the concept is that any waste of any type is a drain on the resources on your company. And any drain on resources keeps you from serving your customers and productively doing the activities that will keep Dracklebob Electronics in business and thriving. Those activities not only include information systems, but the information systems run through every one of them….

Click Here to read the rest of this Expert’s Solution. (http://www.iwchallenge.com/0308)

IT KEY TO LEAN PROLIFERATION AND SUCCESS
Take advantage of opportunity to support and drive improvements.
By Dave Strothmann

Sounds like you had a rough meeting with your new COO, and I hope you will find a way to work closely together to further the company’s lean objectives. Congratulations on your successful ERP implementation, and, as you learn more about lean, you will discover that it is a never-ending journey, similar to what you have probably come to realize about any business improvement that drives information technology (IT) investment and change. I’d also like to point out that the lean initiative at your company may currently be viewed as a manufacturing project, but you will soon see that lean philosophy will likely permeate the core of everything your business does — or it should — well outside of manufacturing as the company strives to eliminate waste and improve the flow of goods and information across your enterprise and into the supply chain….

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