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JIT…A Failure Story

During the past weekend, I end up reflecting on how I have spent some summers of the past.  I don’t know why.  I just did for some reason.  There was one summer 17 years ago that ended sticking in my mind that I thought I would share.

I was working for a consumer electronics company that had manufacturing in the U.S. and in Mexico.  One fall, I was asked to help design a new manufacturing facility to be built in Mexico and they wanted it to be a Just-In-Time facility.  This was my first time hearing about JIT, so I read up on the concept.  Of course, 17 years ago almost all the material was about what it was and not how it worked.

The goal was to only have 2 hours of production materials at the production lines.  I made a super fancy spreadsheet that showed how much square footage was needed in each area based on line speed, shelving, component size, packaging, etc…

In July, I was approached again and asked if I would spend the month in Mexico straightening out what was going on.  The JIT system wasn’t working.  There wasn’t enough room for everything.

My boss and I went over the spreadsheet three times before we went on our visit and verified all the calculations and formulas.  It was all fine.

When we arrived the first day, we toured the plant.  We where horrified.  Televisions that were designed to stack 3 high were stacked 6 or 7 high.  Boxes were being crushed and leaning.  They looked like they could fall at any minute.  Areas that were not designed for storage were stuffed and there were approximately 100 trailers in the parking lot with materials in them.

This was a brand new facility.  It had only been open about 1 or 2 months.  It was a disaster.

The first thing I learned was there was no ramp up period.  On a Friday, one facility was closed.  The following Monday this facility was opened and expected to run at full capacity.  I had never seen any company do that before or since.  There is always a ramp up period.

The second thing we learned and more importantly was there had been no training on JIT, what it was or how it worked.  The facility was operating under old batch-n-queue mentality causing space to quickly fill up.

My manager and I were able to get the inventory under control through some strict inventory management processes and even get a more consistent delivery of materials to the assembly lines.

In the end, the company was not ready to run any differently.  It was a shame.  They ended up expanding the building and continued to run in a batch-n-queue manner.  I believe the facility has been closed in the last 3 or 4 years.

It was my first exposure to JIT and all that it takes to run a JIT system successfully.  I call it a system because it isn’t just about space and delivering parts.  It is the management mentality to reduce changeovers, run in much smaller batches and solve problems.  It really showed me how everything must work together.

Does anyone else have any horror stories from trying to implement a just-in-time system?

Small Change vs. Large Change

Small change vs. Large change is a debate I hear quite often within the Lean community.

The meaning of kaizen is to continuously make change for the better.  Implied is to make small changes everyday and over time it will add up.  Paul Akers at FastCap often talks about the 2 second kaizen.

Every improvement counts.  This is small change.

The flip side of the discussion is large change.  Transform the work into something new.  Redesign the process, the layout, the flow.  Act in a completely different way.

My opinion…they are both right and you should do both.  The key is understanding what your organization needs and when.

If it is a traditional batch and queue organization (manufacturing or service), then as you start your lean transformation I would recommend large change.  Create a pull system where the parts or service flow uninterrupted.  Dramatically change the way you operate.

Once the large change is done, the improvement never stops.  This is when you start looking for the 2 second improvements in the process.  Everyday the process should be better.  Keep making small changes.

This isn’t the only way to go about a lean transformation.  It is just one way.  If you want to be successful with your lean transformation take the time to really consider your strategy for going about the transformation.

All in all, some improvement is ALWAYS better than no improvement…small or large.

Understanding Single Piece Flow

One of the first concepts that pops up when learning about lean is single piece flow.  This is a great concept and should be considered when it is appropriate.  Cooking my french fries might not be the time to use single piece flow, but downloading songs may be.

My wife runs a small business of her own.  She sells products online through her website and Etsy as well as events in our local area.  Selling online and brick-n-mortar poses problems from time to time.  One issue is wanting to provide a wide range of scents for customers, but not having large amounts of inventory on-hand because of the batch process of making the soaps in loaves.

mens_shave_soapAfter a year and a half, we think we find a solution to this issue.  Most of her requests for custom scents come through her online sales.  Typically, she has the fragrance available but can’t justify making 8 bars in a batch because the other 7 may sit for a year or longer.  She has found a mold that works very well and is the size she needs that allows her to make one soap at a time.  My wife can now fulfill the requests of her customers and offer more fragrances to her line in her online shop without the expense of carrying a year’s worth of finished product.

What about the live events to sell the inventory?

Good question.  The events are always in the Sept – Dec time frame.  So, if a customer orders a special scent in January, the rest of the finished goods would sit until September at the earliest.  She could have used the raw materials for other products.  The soaps that are high volume sellers and do well at the live events can be made in batches right before the event.  Any finished product that is leftover after the event season can be sold online.

It is a good mix of using single piece flow and batch processing when it best fits the situation.  It is about understanding your business needs and trying to meet those needs.  Not forcing everything to one solution whether if fits or not.

What makes sense for your business?

Please Batch My Fries

I have to admit this post is partly a rant and partly an example when single piece flow might have been taken too far.

This past weekend I was McDonald’s with my family.  We all ordered burgers and fries. We were the only ones in restaurant in line.  Of course, the register furthest from the fry bin was where we placed our order.  After our burgers were made and put on the try the worker went to get our fries.  I was glad he waited until the burgers were finished because it took a few minutes.  I thought he was trying to keep our fries nice and warm.

Then it happened.  I get hit with single piece flow.

The worker walked slowly over to the fry bin.  I mean slowly.  Filled ONE small bag of fries and then slowly walked back to the counter and placed it on the tray.  Then he walked slowly back to the fry bin.  Of course, there was someone from the drive-thru filling fries so he waited.  Then he filled ONE small bag of fries and slowly walked back to the counter and placed the fries on the tray.  He did this two more times.  Each time waiting for the drive-thru worker to fill 2 or 3 fries.

I think I needed a clamp to shut my mouth it was open so wide in shock.

By the time I got all the fries and got back to the table the first two bag of fries were cold.  There was no way I was going back up to ask for more.

There is a time for single piece flow and there is a time for a batch.  The worker had a confirmed order and it was paid for.  At that point, batching could be an acceptable solution to move the work through the process.

As much as I push for single piece flow, always be aware of the process and situation and understand what is best to meet the customers’ needs.

Quick Assembly of Pre-Fab Shelving Unit

A few weeks ago, I bought a shelving unit from Target.  The kind that comes needing a bunch of assembly and most people dread putting together because the instructions aren’t written very well.  I have done plenty of them and look at it as LEGO for big boys!

One reason people hate the assembly kits so much is the big bag of screws, washers, Dow rods, etc… that is always a nightmare to sift through to find parts for each step.  Well, not this time.  Apparently, the manufacturer must have had some customer feedback about how much of a hassle it is because this time all the hardware was pre-sorted for each step.  The front shows the hardware separated for each step and the back of the packaging tells what step the hardware is for.

All I had to do each for each step was open the appropriate compartment and use the hardware.  It was sorted and counted out properly.  This provided visual queues as whether or not if I forgot something.  If all the pieces were used, I should be alright and if there was a component still on the floor then I missed something.

I compare this to how some companies use material handlers to do the non-value added work to present parts to the value added operator so less time is taken by the value added operator to assemble the finished product.

The manufacturer took the non-value added task of sorting the hardware needed for each step and packaged it together.  This meant me, the value added operator, didn’t have to spend the time looking for the right hardware during each step.  I took less time to assemble this shelving unit than I have for any other unit in the last 10 years.  It was great.

One last thought on the manufacturer.  I would imagine they fought conventional thinking to do this, because it would be easier to package all Hardware A together and all Hardware B together in their silos and then throw that in the box.  Instead they probably had to get all the components into a common area before separating them.  Plus, the packaging I would assume cost more than a plastic bag that is heat sealed.

Over all, I liked this convenience.  It definitely added value for me.

Music Industry is Shifting from Batch to Single Piece Flow

The digital age has been here for quit some time.  One industry that has be changed significantly is the music industry.  For over 50 years the music industry was a batch industry.  Musicians released music in batches to the public in the form of albums.  Then batches of albums would be manufactured and sent to stores before finally a consumer would buy a copy of the album.

The digital age has made it possible for the music industry to go to a single piece flow.  The middle man or seller has done taken advantage of it.  Now you can go to iTunes or Amazon or other websites, pick what songs you would like and download them one at a time.

Why haven’t the musicians taken advantage of this though.  Musicians are still releasing songs in batches (albums) even though the consumer is downloading just certain song off the album from the internet.  Why don’t musicians create a song and then release it and not wait for batches of songs to release together?  It might allow more songs of theirs to be downloaded because a song is getting played, the fans hear it, and then buy it.  When done in batches, only a couple of songs get played and the rest of the album may be heard by the fans if they buy the whole album or it may not.

Leveling the release of the songs in a single piece flow seems like it would be beneficial to the musicians.  Allowing more of their songs to be played on the radio, which I would think would lead to more downloads and more revenue for the musicians.

Just a thought in a way to use the digital music age to their advantage.  What are your thoughts?

Lack of Handoff Integrity and Empowerment

A couple of weeks ago, my wife was dealing with a mess between our health insurance provider and our flex plan provider.  This is our first year of using a Flex Plan that pulls money directly from my paycheck (before taxes) into an account to be used on medical visits, prescriptions, etc…  Everyone mentioned how wonderful this is.  It is kind of like level loading the payment for doctor visits and prescriptions we would need during the year.  This is suppose to be a seamless process for us.  The insurance company is suppose to automatically send processed claims through to the flex account provider.  At that time, the flex account provider is suppose directly deposit the money into our checking account for us to pay the bills.

If you noticed, I used the word ‘suppose’ a lot above.  There is a good reason for that.  The process is not working like that at all.

After a few months, my wife had noticed that we hadn’t received our reimbursement from our flex plan for several doctor visits.  She keeps meticulous records, so she knew exactly what the amounts were, what doctor, and for what.  My wife called our flex plan provider.  It didn’t take long before the flex plan provider pointed the finger at the insurance provider.  I think it was put this way, “We can’t reimburse you if we haven’t received any notice so it is their fault.”

That led to a call to our insurance provider.  My wife spent almost an hour on the phone with them.  The insurance provider said they sent it.  Their system showed it was sent on a specific date.  My wife asked how often do they send claims to the flex plan provider and do they get a confirmation of receipt back?  It was explained to her that all claims are sent out electronically to the flex plan provider on Wednesday (weekly batch and queue method) and they do not get any confirmation back of what was received.  The woman that my wife spoke with was very nice.  She very politically said they know there is a problem and there was nothing she could do about it.  Basically, we have to now re-submit for reimbursement the manual way.  Send a fax to the flex plan provider with the Explanation of Benefits.

How much of this sounds like the place you work at?  A very common failure point is at the handoff point.  Passing information and work from one person to another.  This is exactly where the failure is happening in this case.  Could the handoff errors be caused by the batch and queue method of sending claims all over at the same time on Wednesday?  Could this overload the computer system and cause claims to disappear?

Does the insurance and flex plan providers really have the consumer in mind?  If they did, I would think they would be more willing to work together to solve the problem and help consumers.  Instead, they point the finger at each other and the problem continues, causing headaches for the consumer.

Finally, the woman working for the insurance provider is the closest to the problem because she hears from the consumers directly.  She told my wife they know it is a problem but they aren’t going to do anything about it.  The insurance provider does not even have a stop gap or rework loop.  They put it all on the consumer to manually refile directly with the flex plan provider.  Would you agree that she is not empowered to make change or even suggestions?  If the woman was empowered to make change she would have mentioned what action was being taken.  Instead, she made it sound like she can’t take action because the company won’t let her.

Wouldn’t the insurance provider’s cost be less if this problem was fixed?  Wouldn’t they need less call center people answering phones?  Maybe they could be working on other improvements to the system?  Maybe the benefit pre-approval area is swamped and could use the resources to help out?

The biggest thing that irritated me wasn’t the existence of a problem, but rather they knew it was a problem and sounded helpless to do anything about it.  That sounded like the sentiments I hear every time I go to a new area to conduct a kaizen event and try to engage a new set of employees.  They can say the industries are different but the problems look the same to me.


Continuum of Flow – It does not stop at Supermarkets

Organizations are very happy when they are able to implement a pull system using a kanban.  The success should be one to celebrate, because it is not easy and it is a step in the direction of moving from Traditional Batch & Queue to the Ideal State of Continuous Flow.  As the chart below shows, it is just the first step in moving towards the ideal state.  This chart is one of my favorites from “The Toyota Way” by Jeffrey Liker.

The chart shows the stages of moving from a traditional batch and queue system to continuous flow.  The immediate realization is that pull using a kanban is just one step better than traditional batch and queue.  The difficulty of implementing a pull system and using a kanban is great enough that companies feel they are successful when this is achieved.  The misunderstanding is people believe this is the end state, so this is where a lot of companies stop.  For some cases, this may be what is best for their business.  For many others, they can push further towards the ideal state of continuous flow.  Many companies need help in seeing how they can move further down the continuum.

First, we should clarify two words that I hear used interchangeably, pull and kanban.  There seems to be a misunderstanding of what each really means.  The definitions below were taken from Wikipedia.  They are short and concise and seem to describe each nicely.

Pull – a system where the consumer requests the product and “pulls” it through the delivery channel

Kanban – a signaling system to trigger action

Supermarket Pull – Just like in a supermarket, there is a variety of product to choose from.  The customer (next process) chooses what it needs and pulls the product.  Once so much of the product is pulled out a kanban signal is sent to the supplier that more product is needed.  The supplier will then produce a batch of parts to fill back into the supermarket.  The difference between batch and queue and supermarket pull is the customer is telling the supplier when to produce, not the supplier deciding on their own when to produce.

Sequenced Pull – When I worked in the auto industry we would get orders from our customers for car grills.  For certain programs, the plant would sequence the grills in the packaging in the order they would be used on the assembly line.  So as the cars came down the line, the operators were not pulling from a supermarket, but rather a bin that had the grills in order, so they didn’t have to search a supermarket for the right part.  Two other benefits were a decrease in floor space needed to store the parts and it highlighted production issues immediately.  If something was wrong with the part, there was nothing there to replace it with, so the line had to stop and a team leader notified.

FIFO Sequenced Pull – This method is like the Sequenced Pull with the addition of having standard WIP between the unlinked processes.  The standard WIP is the pull signal for the previous process to produce more work and it is placed into the flow on a First-In-First-Out basis.  When the standard WIP is full, stop producing parts.  This is similar to the Supermarket Pull, but the next process does not schedule the work.  The only way they know what to produce is from the FIFO lane.  I toured a facility a few years ago where they did this very well.  The molding presses were lined up on one side of the small building.  They produced product and filled the lanes in the middle of the building using FIFO.  The assembly cells were on the opposite side of the FIFO lanes.  They would produce whatever was next in the lane.  They did not use a schedule for the assembly cells.  They pulled just pulled the next cart of work.

Continuous Flow – This is the ideal state.  Processes are linked together so there is no inventory between them.  The work is passed from process to process with no interruptions in the flow.  Don’t get hung up on the definition of 1-pc.  I see many people get caught up that 1-pc means one individual item at a time.  1-pc could mean one bin of parts at time.  The bin is moving through the process with no interruptions and there is only one single bin of parts being worked on and no bins waiting.  I know the thought of one bin as 1-pc can be controversial.  This does not mean that 1 bin = 1-pc is the right choice all the time.  Understanding the business and the situation makes this a case-by-case call.

There may be times where you have more than one of these types of flow in your facility.  Different value streams progressing along at different rates along the continuum of flow.  This is OK.  In fact, it would be surprise if you could implement a type of flow all the way through your value stream at once.  Use this as an opportunity to create an experiment and see what works best for you.