How to handle the crisis in manufacturing companies

Read here
http://yourleanforum.blogspot.com/2009/06/lean-can-be-effective-way-to-survive.html

Lean tools now available in Chinese!

Lean in English

For two years Flexkom has sold Lean tools online in English. The tools available are e.g. a presentation on Lean Thinking, an introduction to the tools in Lean Manufacturing, 5S audit forms, Kanban spreadsheets, OEE spreadsheet etc.
Visit the English website >

Now also in Chinese

Now the tools are also available in Chinese (Mandarin).
Visit the Chinese website >

Still also in Danish

Our website is still available in Danish (Scandinavian).
Visit the Danish website >

What is Lean?

Lean comes from Toyota's production in Japan

Lean started back in the 1950s at Toyota in Japan. Toyota was in a tough competition with the major American Car Manufacturers. Toyota was struggle ring due to bad economy following the war. Therefore Toyota could not afford the huge inventories like the American companies could. Hence opposite the Americans Toyota could not run a production based on huge batches (mass production). Toyota therefore invented a production system with low inventories. They called this system "Toyota Production System” or TPS.

As a part of TPS Toyota implemented Just-in-Time or JIT. JIT was mainly used towards the suppliers who were asked to deliver in small batches, in superb quality and at the right time. Always! This forced the suppliers to move closer to the Toyota factories. Actually Ford was the first to use JIT already in the 1920s. Ford called their system “dock to factory floor”.

Among other tools in TPS you will find SMED (reduction of changeover time), Kanban stock control, 5S system and order, poka-yoke (zero failure) and Kaizen (continuous improvements).

Soon Toyota showed good results and in the 1980s the American companies has to acknowledge that Toyota was doing something right.

“Toyota Production System” becomes “Lean”

It was Womack and Jones who named the TPS system as "Lean" with their book "Lean Thinking" from 1996. The word was chosen because it means less. Less inventory, less (and better utilized) capacity, less failures, shorter lead time etc.

In the book Womack and Jones defined Lean in 5 basic principles:
1. Define the value demanded by the customer.
2. Define the value stream that creates the value.
3. Create flow in the value stream.
4. Create pull (based on orders).
5. Continuous improvements.
Read more about the 5 principles >

From production to other areas
Since then Lean has become a widely used tool to optimized value streams and processes. Today Lean is used to optimize production and manufacturing areas, administrative processes (service), product development, IT-software etc. The reason for this is that the 5 basic principles are universal and can be used in any environment.

By Mikkel Smith
Flexkom - download Lean tools and software online >
Scandinavian website with Lean Courses (sorry - in Danish) >

Lean and HRM work perfectly together!

Lean and HRM (Human Resource Management) work perfectly together when implementing Lean. A good and effective HRM-department can support a successful implementation of Lean in many ways.

Examples are:

• When implementing Lean it is necessary to appoint some change agents. These change agents can be found internally or hired. In both situations a good HRM-dept can help finding the right persons.
• The implementation of Lean is a huge change for the whole organization. To handle the change a good HRM-dept can be the key player. Both as advisors for the change agents and as coaches to the management and employees.
• During a Lean process a lot of training is being conducted. A good HRM-dept can support making a good training plan. I.e. ensure that the training is conducted at the right time and in the right way. Also a HRM-dept can help evaluating these training sessions.
• The HRM-dept should also be used to make the best and most effective project teams to be used in the Lean process.
• When implementing Lean one of the objectives is to find best practise. E.g. when implementing 5S at a work place used for several shifts or when making SOP (standard operation procedures). When looking for best practise conflicts may occur. Here HRM can help.
• If the goal with Lean is to reduce costs (oppesite a growth strategy) HRM can help to ensure a good process when asking employees to leave the company. A good HRM-dept can make the difference between a good and a bad implementation of Lean in such a company.

A good HRM-department can make a huge difference when implementing Lean!

Do you have comments or more examples - please white a comment!

By Mikkel Smith
Flexkom – Download Lean tools online >
Website on Scandinavian Lean Courses >

5S - it sounds so easy - but is very difficult to implement

When you hear about 5S the first time, you might think that it sounds easy to implement. But soon you will realize that 5S is difficult to implement - and even more difficult to maintain and improve!

5S stands for

1. Sort: Sort work place in ”in use” and ”not in use”.
2. Set in order: Put items in system.
3. Shine: Procedure for cleanliness.
4. Standardize: Procedure for how to leave the workplace.
5. Sustain: Ingraining into culture.

Possible results implementing 5S

• Improves ergonomics.
• Improves safety – no disorder.
• Improves quality – right tools for the right parts and processes.
• Gives pride to the work place.
• Easier to take over a work place from a colleague.
• Reduces changeover times.
• Gives a visible overview of work place – tools, parts, fixtures etc.
• Time spent on searching is reduced.
• Reduces demand for space.
• Improves productivity.

Challenges when implementing 5S

Some of the challenges are:

• The cultural change. It many companies it is widely "accepted" to borrow tools etc. from each other work tables - without returning them. It is also accepted to spend a lot of time searching for the same tools when they are needed. In these companies it is a huge cultural change to implement 5S.
• In many companies it is normal to have "personal tools". Meaning that tools are personal and that they employees are responsible for the tools. With 5S tools are no longer personal but belong to work stations.
• It is a great challenge to maintain a high 5S level. At good way is to appoint a 5S patrol consisting of employees from different departments. They should then audit each department e.g. monthly.

REMEMBER that 5S is a good test of the capability in the organization to implement Lean. If an organization is not able to maintain a high 5S level the same organization can not run Kanban, measure OEE etc.

By Mikkel Smith
Flexkom - download Lean tools online >
Flexkom Lean Academy - Scandinavian Lean Course Website >

When is a company Lean?

When can a company be considered Lean?

“Is my company Lean?” Many companies ask themselves whether their company is Lean or not. Actually it is my experience, that many of the companies that think they are about to be Lean - have a long way to go! Lean can give excellent results, but they do not show within the first year! Experience shows that it takes up to 3-4 years to “become Lean”. Remember - you never become Lean! Lean is not a static condition and you will never be able to say “now we are Lean”. Lean is a culture - a way to work and do things. Lean can therefore not be something you are - but a way you work!

“Lean is a company culture”

Even though Lean is a way to work, I will try to give 5 questions that can indicate whether you are on the right track!
The questions are for manufacturing companies:

• Does the top management have focus on Lean in words and actions? Do they talk about Lean on every meeting and do they constantly show in the production and recognize results?
• Is the production organized as a 5S workplace with a high level of order and systematism? And is the 5S level constantly improved?
• Is the “total process time” divided by the “total throughput time incl. all stocks” improved? The process times divided by the total throughput time should not be more than 0.1%. The stock turn should be more than 12.
• Is the planning horizon reduced? It should be reduced to at least day-to-day planning. A condition to reach this goal is reduced turn-over times and small batches - with a high OEE on bottlenecks.
• Are boards used for planning and problem solving?

Lean can give significant results

Using Lean production companies can achive the following results:

• Shorter lead time to customers
• Improved delivery service
• Increased capacity
• Improved product quality
• Reduced stocks
• Improved flexibility
• Higher productivity
• Improved safety level
• Improved ergonomics
• Visible management
• Improved job satisfaction
• Key performance indicators at all key points
• Continuous improvements
  

By Mikkel Smith
Flexkom – Download Lean tools online >
Website on Scandinavian Lean Courses >

Results using preventive maintenance

Results using preventive maintenance:

• Productivity improvement - up to 30%
• Reduction of scrap and repair time
• Stabile processes
• Reduced maintenance cost
• Reduction of general waste (waiting time)
• Reduced time for re-planning - when maschine breakdown
• Reduced stocks because of reduced uncertainty
• Improved customer service

Remember change management - the technical part is not enough

The technical part of Lean
To many companies Lean is all about the tools - 5S, OEE, Kanban, Kaizen etc. The tools themselves are very effective and can give significant results in a production. But many companies tend to forget, that to make the tools become a part of the company-culture, then the organisation have to have training and more training in using these tools. Too many internal/external consultants run the process using the tools when they are on the shop floor - and forget to train the foremen, planners, production technicians and operators - those who should use the tools when the consultants have moved on. On the other hand it is difficult to blame the consultants, as they are under pressure from the company management.

Short term Lean will only work for a while
When companies implement Lean as mentioned above it only works for a while - the time the consultants are on the shop floor. After the consultants have left the organisation might still use the tools, but only because Lean-audits force them to do so.

Many are disappointed with Lean
Questionnaires show that many companies are disappointed with the effect of Lean. They are told that they can gain 30% increase in productivity, reduce stocks with 30% etc. Actually some “Lean-projects” reach very good results after a short time, but after the consultants have left the organisation gets back to normal. Maybe the productivity has increased - but not a 2-digit number.

Allow time enough for Lean - or accept short term results
When companies choose to boost a Lean-implementation the overall result for the company might be negative. The long term effect on productivity, capacity, stocks etc. is moderate but visible. Some workflows are changed, some change over times are reduced etc. But at the same time employees might be stressed and irritated with the quick change. They have properly not be involved in the decision process at all and only feel that something has been change “for the sake of the company”. Yes maybe there are some results for the company, but if the consultants have had the time to involve the operators, they might also have changed to the better for the operators.A more long term objective and more involvement will for sure give a better understanding for the organisation. Take a machine (bottleneck) where OEE was continuously measured when the consultants where present. After they have left the operators do not see “why” - and soon the OEE-measure has stopped. If the operators where trained in etc. OEE the measure would have continued and the results would have been long term!

“Allow time enough for Lean - and remember change management!”

By Mikkel Smith
Flexkom – Download Lean tools online >
Website on Scandinavian Lean Courses >

Lean flow minimizes waste

How does flow minimize waste in production?

Flow minimizes waste in the following ways:

• Waste: Over-production. Flow improved the leadtime and thereby the need for forecasting is removed (maybe still necessary at a higher level). With short leadtime over production is not necessary - production is “make to order”.
• Waste: Transportation. By creating flow the need for transporting goods to/from shelves/stocks and transporting goods between processes is removed.
• Waste: Waiting. Because processes are stabile (a condition for flow) and in time-balance, neither processes nor persons should wait for other processes.
• Waste: Excess processing. Flow can not remove this waste. It is a management job to identify the customer needs and only meet this demand.
• Waste: Inventory. Flow removes all need for inventory.
• Waste: Rework or correction. Flow will not remove rework or correction, but the stabilization process before flow was created, demands that time spend on rework and correction is minimized.
• Waste: Motion. A lot of unnecessary motion is cause by a lack of flow. With flow parts are automatically moved to the process.

Remember to adjust Lean to culture

Many tend to forget, that Lean was developed in Japan. Japan has a culture of its own like any other country or region. Therefore it is important to remember, that Lean has to be implemented with respect to the culture where it is implemented.

More later…