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Redbox Produced In the U.S. Using Lean

As I continue to focus on manufacturing here in the U.S. this week, I thought I would combine two of my favorite things…..Lean and movies.  An international company, Flextronics, has a manufacturing plant in Creedmoor, NC.  This plant produces the Redbox movie dispensing machines that are popping up all over the U.S.  It is a small facility that is using lean.

The 250 employees led by general manager John Mainey use the Six Sigma Lean manufacturing techniques designed to cut waste, reduce excess effort, address defects and keep the assembly line moving.

Mr. Mainey seems to be a believer in keeping manufacturing in the U.S.

He contends that American manufacturing declined as firms compared production costs in the United States with production costs in locales like China and Mexico, couldn’t see how to reduce spending — much of it related to labor — threw up their hands and said, “We’ll just send it overseas.”

Instead, manufacturers need to “apply Lean and eliminate waste. Recognize that labor is just one cost, and that they must be flexible. If we can do this, then manufacturing will stay here in the U.S.,” said Mainey.

I’m glad to see that Flextronics sees the total cost picture.  The most intriguing part of Flextronics is they are an international company so doing the manufacturing overseas can be done very easily.  Instead, they see the value in producing the product where the product is used.  Therefore, the manufacturing plant is in the U.S. in North Carolina.

I can’t claim to know this is what they are thinking by deciding to producing the redbox units in the U.S.  But it seems like at least part of the equation, since the Creedmoor plant’s parent company is based in Singapore.

The Creedmoor plant is one small part of Flextronics, a massive Electronics Manufacturing Services (EMS) firm based in Singapore with 160,000 employees in 30 countries.

The plant is focused on reducing waste with the production of each individual redbox unit.    The unit is produced on an assembly that moves at 4 inches per minute.

Workers use the supplies in the cart to assemble their portion of the kiosk, constantly referring to a station video monitor that details steps for that station. While steps may be memorized over time, the monitor is necessary because workers shift from station to station and the process changes, says Mainey.

“The monitor reinforces the steps for me,” said Sharon Estes, an assembly line worker. “I’ve worked at seven stations in the last year. I couldn’t possibly remember all the steps for each.”

It sounds like the cart is a kitting tool to make sure the kiosk gets all the right parts.  The assembly line worker also states another great reason for standardized work…job rotation.  The Creedmoor plant rotates employees and the standardized work is there as a reminder as to what tasks need to be performed at that station.

“We’ve been doing the redbox for five years. We still look at ways to improve. There’s no end state,” said Mainey.

Sounds like Mr. Mainey is driving the plant to continually improve.  I hope Flextronics keeps with this thinking and lets the Creedmoor plant prove you can reduce total costs while paying higher wages.


Manufacturing Can be Competitive in the U.S.

I came across this article about how manufacturing can be competitive in the U.S.  It was very well written and seemed to capture that lean is more than just waste reduction and continuous improvement tools.  It highlights how companies are going against conventional thought and turning to cheap labor overseas.

An increasing number of domestic manufacturers are countering the notion that one must turn to cheaper labor to reduce their expenses. Instead, they have turned to lean manufacturing, which has increased their productivity, strengthened customer relationships and most importantly, kept jobs at home. To top it off, they don’t have to worry about paying the skyrocketing transportation costs that come with shipping those foreign-made parts back to the United States

While transportation costs are rising, due to oil prices as well as technology that is being used to decrease the water travel time, it is not the only cost that improves by “on shoring”.  Other benefits are improved quality, increased productivity, and lead time decreasing due to better communication of issues and opportunities.

Lean manufacturing is effective because – when done right – it can make a business flexible and integrate its supply chain, which streamlines production flow and assists just-in-time delivery. But we should remember that although the continuous improvement philosophy behind lean manufacturing has seemingly limitless potential; it is not an immediate fix-all. Businesses must make holistic and long-term commitments to these principles to stay on a profitable course. Companies who have truly embraced lean manufacturing have incorporated it into their culture by focusing on improving cash flow, enhancing their organizations through leadership and continuous improvement, driving out operating waste and building a profitable sales pipeline.

This is one of the best paragraphs I have seen in the media about lean.  The author makes note that when lean is done right, showing an understanding that organizations are doing it wrong.  It is mentioned that lean manufacturing “assists just-in-time delivery.”  I read this and believe the person has some understanding of how the lean principles and thinking get to solving problems that allow JIT practices.  The author also understands lean is not a silver bullet and while limitless in potential is not going to fix everything right away in one swoop.  He also talks about improving leadership and continuous improvement.

When reading so many articles written by people you can tell have no understanding of lean, it s very refreshing to find one where you can tell they have a strong understanding.

Here is a good example of when going overseas is a good idea.

For example, a Switzerland-based supplier of measuring instruments with U.S. headquarters in Greenwood, Ind., has exemplified this focus. Ninety percent of its products are manufactured in the United States and the company are currently expanding its Greenwood facilities. The manufacturer credits much of their success to its commitment to lean principles.

This is a good idea, not because it came to the U.S., because the company moved manufacturing to where the consumers are.  There was one time I was pushed to build a new plant and move manufacturing to China.  The plant would service our customers in Asia.  It was closer and we could eliminate shipping a boat to China from Wisconsin.  It just made sense.

If we are talking about serving the U.S. market, the manufacturing should be done here.  The U.S. was built on the backs of strong manufacturing labor.  We can rebuild the strength of the U.S. by getting back to our roots as I mentioned in a previous post.


Apple vs. PC – Keyboard Waste or Value

I’m not a Mac user and never have been.  Not because I don’t like them.  More because I have never had the opportunity to use or need one.  I have always received a PC laptop as a work computer.  The company I work for now uses about 50% Macs and 50% PCs so I am getting more exposure to them now.  One glaring physical difference was the keyboards.  I noticed how thin the Mac keyboard was.  The picture is below.

Notice the keys are very low profile, the whole pad is extremely thin, and there are no bells and whistles on the keyboard.  There is no place to turn the volume control up or down or shortcuts to mail, files, etc…

In contrast, the picture below is the PC keyboard that is attached to my docking station.

The PC keyboard keys are much taller and the entire keyboard is thicker plus has the bells and whistles on it.

Is the PC keyboard waste or is the Apple keyboard not meeting the expectations of the customer?  For me, I see the PC keyboard as waste.  There is more plastic per key used and the keyboard panel has more plastic also.  This seems very wasteful to me.  What would the savings be if the PC keyboards were as thin as the Apple keyboards?

I don’t use all the extra shortcuts on the keyboard so the manufactured over-processed the keyboard to give me more than I need.  If you are a person who uses all the extra shortcut buttons on the keyboard then you may see the Apple keyboard as not meeting the value needed by the customer.  Even if the Apple keyboard had all the extra shortcut buttons on it, I think it would still be thinner than the PC keyboad.  What do you think?

Waste or not meeting customer needs?


Walmart Changing Transportation Strategy

Walmart has decided to breakdown some of the orthodoxies that it has always had when it comes to shipping product (article here).  No longer will they wait for the supplier to deliver the product to their distribution warehouses.  Now Kelly Abney says,

“…it’s all about squeezing out costs by keeping Wal-Mart’s own trucks busy and by accepting delivery of merchandise at the supplier’s loading dock instead of at a Wal-Mart distribution center.”

This seems like the right thing to do.  Distribution centers are non-value added for the consumer which means they are nothing but a cost (or waste) for Walmart.  Does this mean they won’t have any distribution centers?  The article does not say what it means for the DCs.  My thoughts are there would still be DCs but maybe they need to be smaller because less is going through them saving on equipment, manpower, land, etc…  Also, what is mentioned but now focused on, is Walmart is trying to utilize its resources and not just source out everything and let their resources have waste in their processes.

Abney also says it allows suppliers to,

“focus on what they do best, manufacturing products for us.”

The main reason for this change is Walmart is having a big enough problem with receiving errors at the distribution centers.  Errors like:

“…missing pallets or delayed shipments.”

How does Walmart picking up the goods at the suppliers’ dock help?

“…when a Wal-Mart driver picks up a load at a supplier’s loading dock that same driver will have to scan each pallet’s RFID tag as it’s loaded. The driver will then transmit the data so it can be matched up in real-time with EDI documents that specify what’s in the shipment. Sending that data ahead doesn’t just give Wal-Mart the inventory information a few hours earlier. It gives the retailer the chance to have unpleasant inventory surprises corrected in minutes at the supplier’s loading dock, not days later.”

I like the concept.  Quicker feedback into the loop.  I still have a lot of questions though.  It is great that the problem is identified right away, but what if they don’t have the correct product or remaining amount available?  Is the data collected by the driver given to the supplier after every pickup so the supplier can track trends in types of errors in order to problem solve?

Once the pallets are on the truck, Wal-Mart also gains complete control over when that truck will arrive at the distribution center. Such knowledge creates much more predictability for arrival times, which in turn produces better scheduling options for the loading dock. It also means faster turnaround times. And, stores will know what they’re getting, and when.

Predictability is something that lean organizations strive for.  It creates less waste in resource availability.  Once this is accomplished, Walmart could take the next step in leveling the flow of trucks throughout the network.  I would bet by owning their own trucking and creating predictability they will create more savings then they even realize.


EPA using Lean to go Green

I was shocked, but happy when I read the EPA is trying to educate businesses on lean principles in order to help improve efficiency resulting in a better environment.   The interview is with George Wyeth, a professor at Lawrence University who leads the innovation efforts with the EPA.

From the interview with Mr. Wyeth:

Lean manufacturing is really a business strategy, not an environmental strategy.

Mr. Wyeth recognizes lean as more than a set of tools to get a greener world, but a business strategy that can help companies reduce waste resulting in a smaller carbon footprint.  It sounds like they are trying to educate on the how (lean principles) in order to get the what (cleaner environment) that is wanted.

Lean, because it focuses on the elimination of waste, has a lot in common with what we call pollution prevention, which we’ve been preaching for 20, 25 years. As companies focused on eliminating waste, we realized they were doing pollution prevention and didn’t even know it.

It is refreshing to see someone recognize the synergies between lean and green.  How they are intertwined with each other.  When I worked in the auto industry in the early 2000’s, we knew we had to control our costs better.  One way was to use the water from our painting and electroplating lines more efficiently and what we was excess we needed to recycle back through the system.  This was before the green movement become so overwhelmingly popular.  We spent quite a bit of money to implement the system but it paid itself back in less then a year in not only water savings, but also less cost to cleanse the water before disposing it in the city drain.

From the article:

We thought that presented an opportunity for us to take the message we’ve been preaching for a long time and presenting it in a way that would be better understood and be more easily incorporated into the business, so it’s not seen as, here’s the government with a hammer forcing you to do something.

The EPA knows they are a regulatory agency.  Unfortunately, the perception is very similar to the cost versus quality perception.  You can’t have both.  It is either one or the other………..regulatory compliance or low cost.  The EPA wants to educate that you can have both and using lean principles is a way to get both.  WOW!!!  Cost, Quality, and Low carbon footprint………you can have them all?!  Who would have ever thought?

Companies must be interested in how lean can help with the environment:

We get a lot of hits on our website on lean manufacturing materials, and there’s a lot of interest from people who want to talk to us.

I am glad to see the EPA has lean materials on their website. Not only about lean and the environment but also lean and government.  Is this a way to get more people interested in lean principles and how it can help their business?  I hope the EPA continues to help companies see the benefits.  They could be another outlet to reinforce the lean message.