One Man’s Lean Journey: Creating a Pull Factory…EPIC FAIL!

Let’s have fun with this post. See how many things we did wrong in starting this new manufacturing facility and circle them. Hint: circle the entire post.

To this day, I feel very fortunate to have been a part of this work because of all the learning that I didn’t come to realize until years later.

I was a 21-year-old intern and had been selected by my manager to help design a brand new manufacturing facility in Mexico. There are only three people involved in this “top secret” plan. My manager, a consultant with an extensive computer simulation background and myself.

The goal was to design the first pull manufacturing facility in the company based on Demand Flow Technology (or DFT). DFT is one person’s interpretation of lean and how production lines need to be flexible enough to run every product at any time. Studying DFT would serve me well later in my career. I also gained a lot of experience in computer simulation of facilities.

I designed a spreadsheet that calculated the storage space required for every component and finished good across the facility based on production rates and size of components and product. This was an input into the simulation to help determine the size of the building.

We finished the design, ground was broken and I went back to school for a semester.

The new facility was opened a couple of weeks before I returned for another session of my internship.

(Pay attention here because this is my favorite part)

The Mexico facility was replacing a local U.S. facility. The company shut the U.S. facility down on a Friday and started up the new facility in Mexico on the following Monday. No ramp up for the new facility. It started it’s first production after the other facility was shutdown. There was no training of management or employees on what a “pull” facility meant and how it would be different. It was a “here is a new pull facility go run it like you ran other facilities.”

Within a month, there were over 115 tractor trailers on the parking lot storing components and finished goods. Inside the facility, finished goods were piled in any opening they could find. Television sets that were supposed to be stacked three high were six high and leaning over about ready fall. It was a complete disaster.

My manager and I were called to the floor. We were told our design and space requirements were wrong and we needed to go to Mexico and fix the problem.

I spent two days pouring over my calculations and could not find a single thing that was wrong. We got to the facility and spent a few days watching production, examining the inbound and outbound process and locating parts in the facility and in the parking lot. It became very clear that no management practices had been changed and the facility was operating in traditional batch push system.

We spent a month helping to change a few processes and get the inventory under a manageable control, but the overall solution from the high powered executives was to expand the building and keep operating as is. Not change the management practices and improve the processes.

I can’t understate what a disaster this was. Truly an enormous cluster. It was a few years later when I was leading a lean transformation in automotive that I realized how valuable that experience was.

Reflections:

  • Having only three people involved in the design of a new facility, especially going from push to pull, is a very bad idea. It should be a larger collaborative effort. This will even help with buy-in a when the changes are made.
  • Simulations are an incredible tool, but are useless when you simulate one set of assumptions and another is put into practice
  • Absolutely no ramp up time for the new facility…Really!?! I am still speechless on this one.
  • If you are switching from a push to a pull system, you have to train everyone from the plant manager down on how this is different and how to manage in the new system. This is crucial.
  • There must be knowledgeable support for the entire facility when going from push to pull. Help everyone work through the kinks of the new processes and not allow them to fall back on old ways.
  • Most important, when something goes wrong, learn and change to improve don’t fall back to old ways just because it is comfortable. In this case, it cost millions to expand the facility instead of learning new processes.
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Posted on December 8, 2014, in Flow, Leadership, One Man's Lean Journey and tagged , , , , , . Bookmark the permalink. 6 Comments.

  1. Matt, it must have been devastating for you to have such a horrible outcome. But putting that task largely in the hands of an intern is pure negligence on management’s part. And your team should have spent a week or two at the U.S. facility. Of course, that would have meant people there finding out what was planned.

    • It was hard to swallow. The good news was that I was so young and dumb I didn’t know what I was swallowing at the time. It was hard but I really look at it as a learning experience that I will never forget. It was a crazy year.

  2. Thanks for sharing your experience. I recently watched, from afar, something similar happen with a start-up plant. Unfortunately, those who were in the middle of it did not realize that they were trying to run what was supposed to be a pull facility with a push mentality. To thisday they still think that they are being Lean and no one is going o tell them differently. And they can’t seem to understand why things are not going as well as they had anticipated.

  3. Every time I read about another American company closing it’s US production facilities and opening up in Mexico (or another “low cost” manufacturing country) I just shake my head. This is not #Lean leadership. This is L.A.M.E.

  4. Hi Matt

    The company really didn’t care about Lean nor did they truly want a pull system, they were in fact just chasing cheaper labor. The real stupidity came from those above the three people who designed the place, they should have told you what they really wanted, and you wouldn’t have designed the wrong type of production facility. I know of very few companies that chase cheap labor that in the end win because of it, sooner or later someone out thinks them.

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