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LEGO Showing Lean Like Behaviors

A few weeks ago, Ultimate Factories on National Geographic premiered an episode about LEGO.  My son is a HUGE LEGO fan and seems to have almost the whole LEGO City setup.  So this episode really caught our attention.

My son loved watching the artist/builders design the new Police Station and seeing all the sets being made in the factory.  What caught my attention were the things that seemed lean like.

Here is the full episode.  It is 45 minutes long.  Below are some highlights I picked out with time markers as to where they are at in the video.

(1:15 – 4:10 in video) Right off the bat, the show describes how the artist/builders go about designing a product.  The product manager takes his team out to real life sites of what they want to build to study them.  They look at what the site has and needs to feel authentic.  It is truly direct observation of what the team wants to build.

(6:40 – 10:00 in video) LEGO takes full advantage of standardization as much as possible.  The Police Station turned out to be a 700+ piece set, but none of the pieces are new and require tooling to be made.  Because the designers were able to build the Police Station out of existing pieces they were able to use that budget to design a police dog that is brand new adding to the experience.  My lean lens sees this as cost management in order to reinvest in innovation.  The innovation leads to a better experience and more revenue.

(36:12 – 36:20 in vide0) The video does not talk about 5S but there is some evidence of it.  In this clip, you can see the tape outlines on the floor for the staging of finished product.

(36:20 – 38:10 in video) In the 1990s, LEGO went through a period when sales were declining.  LEGO decided to go and see why this was happening.  They discovered their products were not meeting the needs of the adult customer, which is 50% of their market.  People were hacking the Mindstorm systems and creating bigger sculptures with the robotics.  They didn’t try to shut the hackers down.  LEGO embraced them and created new products.  They still invite customers to come in and help with designs.  They are focusing on customers needs.  Everything starts with the customer.

These are some of the quick examples I picked out.  If you notice, nothing I saw focused on lean manufacturing although I believe I saw some lean like things in manufacturing and distribution too.

I would highly recommend watching the full video because it touches on every aspect of business.   From customer focus to product development to manufacturing to logistics.  It is very complete.  If you are a LEGO fan, this video is a must see.

In the comments below, tell me what you saw from a lean perspective.  What did I miss?

The Importance of TPM and SMED

There are two main types of manufacturing environments that I have worked in.  One is a heavy manual operation environment usually assembly lines.  The other is a heavy machining environment with painting and plating lines or injection molding machines, etc…

In a heavy machining manufacturing environment, there are two lean concepts that I believe need to be done very well to have sustained success…Total Productive Maintenance (TPM) and Quick Changeover (SMED).

Some may say continuous flow is the most important concept.  The issue is flow can not happen if the machines are down unexpectedly or if the changeovers are taking a long time.

If a machine goes down, then flow stops all together or WIP is built up between the processes so when the machine goes down unexpectedly the following process does not go down also.

The longer a changeover takes the more WIP needs to be built up in front of the next process.

In either case, this causes the flow to be interrupted. Any WIP that is introduced between the process interrupts the flow of that particular item even when things are running smoothly.  The item has to stop and wait will the items in queue in front of it go through the process first.  This can make it difficult to link processes together to create the smooth flow.

Yet, these are two tools that I rarely see as a high priority to master in a manufacturing environment.  5S seems to be the tool to try and master first and then standard work.  I do believe these are extremely valuable and necessary concepts, but if you don’t implement them trying to solve a particular business need then sustaining the gains is hard.

5S and standardized work can both be implemented through a TPM and SMED program.  5S can be used so tools are in their place and ready to go when a changeover is taking place or maintenance is being done so the machine is down for less time and production can start back up.  There should be standardized work to make sure the TPM is happening.  Checklists is a common way to have standardized work for TPM.  There should also be standardized work for changing over a machine in the quickest, safest, most efficient manner that is known.

All the concepts are important.  I see TPM and SMED as two concepts that are vehicles to other concepts introduction and success.

Are there other areas TPM and SMED are as important?  Maybe with IT systems?

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.

Different Types of Kanban

I know my last post was about the concept of kanban.  It has been a concept that springboarded a lot of my learning over the years.  It may have started with implementing a kanban system but ended up learning about visual management, the seasonality of the business, what the customer is demanding, and change management.

There are two important learnings that I have had when implementing a kanban system.  Two that I thought I would share.

The first lesson is that when a kanban system is mentioned people jump to a conclusion that all materials will be handled in one way.  All the materials will be set with a min/max.  The min being the reorder point and the max being the point to fill the order to.  This assumption scares people because setting everything to a min/max system would mean increasing inventory overall and holding inventory on some parts for a very long time.  This is not a smart thing to do.  People need to know that a system can be put into place that takes each component into consideration and does the right thing for that component.

This brings me to the second lesson.  What is the appropriate way to handle each component?

So far, I have learned three ways to handle a component in a kanban system.

The first way is the typical kanban replenishment system.  A minimum is set for a reorder point based on lead time and safety stock.  The maximum is the highest quantity wanted on hand at one time.  I have found the best time to use this is when a component is used on a nearly daily basis and in high quantities.

The second way is another typical way.  The non-replenishment kanban.  This is a kanban that is filled but not recirculated.  I have found this to be best used when a component is needed for a very short period of time, a day or week, and then the component is not used for a long period of time.

The third way is what I call a seasonal kanban.  It is a component that will be used frequently and with higher demand but only for a short period of time, a month, two, three.  It is long enough that a non-replenishment kanban is not proper to use and a replenishment is too permanent.  What I have done is set up the component on a replenishment kanban but when the use is winding down, I convert it to a non-replenishment.  When the season is over the component has no inventory so things aren’t stored for an unnecessary amount of time.

Using a combination of these three can make for a very efficient system.

Learnings from a Kanban Implementation

A few years back I had the pleasure of setting up my first kanban system.  At least one that I was consciously setting up, unlike the one I blogged about in the pastJoe Wilson, my recent guest blogger, and I were tasked with developing a kanban system, train 550 people across 3 shifts using a simulation we develop, and implement all within 8 weeks.

(click on image to see larger version)

This was no small task as you can imagine.  The facility had 4 main process: injection molding, painting, electroplating, and assembly.  The processes were spread out over 450,000 square feet.  We also thought the only way anyone would have a chance to retain how to use the kanban system was to have all 550 people touch/participate in the simulation.

We designed the simulation using the actual kanban cards that would be used out on the floor so people would be used to seeing them.  The simulation also only used 6 people at time.  We weren’t dummies.  We knew how many sessions that meant and we were going to do it in one week.  We decided to train 6 people from HR on the process and the simulation.  They knew as much as we did at the time so why not.  We went over it with them several times until they understood it.

We were the only facility in the company that hit the mandated deadline for this task.  Yes.  It is one to this day that I am proud of.  Now that doesn’t mean the system worked all that smoothly.  It did allow us to jump into the learning cycle much faster than everyone else and start making improvements.  It was an AMAZING learning experience.

I did all this set up so I could share some learnings……OK and maybe toot Joe and I’s horn a bit for meeting the deadline 🙂

  • Small kanban cards (3×3) on big portable racks didn’t work too well – Our solution was to permanently mount the cards to the racks that were specifically designed for the parts.  We scanned the card when full and then when empty.  Another possibility is to make the kanban cards big (8×4) so a card can’t be stuck in a pocket easily or is easy to see if missing.
  • Transporting the cards large distances to put in the “Return To Supplier” bin did not work – Taking the cards across the department allowed people to stick them in pockets until they walked over there and also gave them more opportunity to drop cards on their way to the bin.  The permanently mounted cards helped with this because we went visually off the empty bins.  This forced us to create a visual management system to see them easily.  Another solution is have a “Return to Supplier” bin no further than 12 inches from where the card is removed.
  • Start with too much inventory instead of too little – When parts ran out because we sized the kanban too small people wanted to blame the new process and not bad math on our part.  In most cases, we sized properly or too large.  When someone argued the process was to blame we showed how it was working for the other parts and we just needed to add more kanban cards to the system.
  • The final one was timing of launch – We were an automotive supplier and we went go live with the process in the middle of June.  In automotive, almost all manufacturers shutdown for a week around July 4th to retool for the new model lines.  The suppliers do to.  So we were live for one week and then told everyone to violate the kanban because we had to build a bank of parts for the few customers that didn’t shutdown.  Whoops!  That was a hard pill to swallow but we did and we put a process in place of using non-replenishment kanbans (my next post will talk more about this) for building a bank of parts.

The list could go on forever on what we learned from this experience.  These were the highlights that spurred other learnings.  In the end, the system worked very well but it took us some time to get there.  I hope others can take from out learning and not have to make some of the same mistakes we did.

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?

FIFO Fast Food Style

The other night I went through the drive-thru at Wendy’s.  All the times I have gone through the drive-thru, I don’t know why it hit me this time….this is a great example of First-In-First-Out (FIFO).    It struck me as to how well fast food restaurants execute this, some better than others.

An order is taken and it is produced in that same order and given to the car as they pull up in the same sequence their order was placed.  I know this common, but what if a Fast Food restaurant operated in the same fashion a lot of our processes do.  Say you pull up and order a value meal for you and a kids meal for your child.  Then the next car orders only a soda and the third car only orders fries and a soda.  What if the Fast Food restaurant told you to pull forward because they are doing the other orders first, because they are easier orders to process.  We would get upset.

That is exactly what we do in most manufacturing environments.  We skip jobs because the setup on another job is easier or it is a simpler job to run.  Why?  Usually because the setups are too long or complicated.  Instead of working on the set up we just re-arrange the work.

I have been asked to pull up before.  Not because they wanted to do an easier order but because there was a problem in the process of getting my order ready.  The pulling up can be considered visual management for when something in the process didn’t go smoothly.  Kind of like pulling an andon cord on a manufacturing line.  I wonder if they measure how many cars they have to have pull up on a daily basis?

We don’t want to jump to FIFO just to be doing FIFO.  The drive-thru made me think a little harder on it though.

What are your thoughts?

Guest Post: Pace Not Speed

Today’s guest blogger is Joe Wilson.  Joe is a great lean thinker that worked for an automotive supplier for several years.  Developing his lean thinking by diving into the deep end.  Joe now works for Tyson Chicken working within their Industrial Engineering group.  I am happy to post his writing here.  Joe is a great lean thinker.

A few days ago, I had one of those random day-dreaming thoughts that spurred me to go look up something in a book that I haven’t read in a few years.  When I opened the book, the bookmark was a heavily scribbled on piece of notepaper from a series of Lean classes I took.   Among a handful of otherwise barely readable comments was these three words, underlined and circled:  “PACE…NOT SPEED”.

Those 3 words stood out as a turning point for me in my lean education.  Those words drove an understanding of what the huge pile of lean phrases and tools I had bouncing around my head really were all about.

You really can’t implement things like pull systems/kanbans/heijunka, standard work, or even 5-S programs until you can define what your customers want and when and how they want it.  It is extremely difficult to determine how many people should be doing the work in your workplace or how much equipment you need to do the work if you don’t have a true understanding of how much work needs to be done.  What this also means is that your distribution, purchasing, and planning/scheduling functions are absolutely critical to the success of your success in lean.

Where do you take this from here?  Start by getting as deep as you can in what the market is for your plant/company’s output and what your customers need.  Get as deep as you can in how your suppliers bring things to your door and how you handle those.  Those things aren’t exactly the most interesting or flashy pieces of the pie to work on, but without a clear understanding of what you need to do, you can’t solve the problem of how you get there.


Overlooked Waste Reduction of Kanban

Kanban is a very powerful tool when used properly.  It can lead to significant waste reduction.  Most people tend to think of the inventory waste reduction.  While kanban can lead to inventoryreduction, it could also lead to an inventory increase.  If a company is running so light on inventory and always creating shortages at the customer, kanban can help but it will most likely add inventory to the system.  Or if a company tries to use kanban on items that are not used but a couple of times a year, most likely the inventory will be increased in order to keep them in-stock year round.

No matter the circumstance though, if used properly, kanban will reduce the waste of information and material flow/transportation through the facility.

In a traditional environment, information flow is separated from the material flow.  The information comes from the office to someone out doing the work.  The person doing the work creates a schedule to be published.  When the schedule is published the material handler moves the material to the area to be worked on.  Then the material is processed.

The genius of kanban is taking the information flow and the material flow and combining it into one.    When the kanban is returned to the supplier, it triggers the work to be completed and when to be completed by.  It becomes the scheduling and the inventory control, as well as directing the where and when for the material to flow.  The kanban travels with the matieral and describes what the material is, the quantity to produce, who ordered it, and when it is due.  All in one package.

This reduces a lot of transactional waste of transportation and can eliminate non-value added work done by some people, freeing up time to do more value added work.

This is often missed because many people focus solely on reducing inventory through kanban and not reducing inventory through flow.  So, in cases when the inventory is increased, and rightfully so, due to a kanban system then kanban gets a bad name because “it isn’t lean.”  As Mark Graban would say, that is more L.A.M.E. then Lean.


OEE vs. Flow

A very common metric that is tossed around in the lean world is Overall Equipment Effectiveness (OEE).  A couple of weeks ago I posted a blog about clear and relevant metrics and used OEE as an example of how it is not very clear or relevant to the people doing the work.  There is another hang up with OEE.  People become so focused on OEE that it starts to hinder flow.

When transforming the thinking of an area, people can latch onto OEE very easily because it is very silo’ed or machine focused.  The metric focuses on how much the machine is up and how efficient it is with its time and materials.  On the surface, this is all great.  So how does this hinder flow?

When creating flow we want to eliminate/reduce the work-in-process (WIP) between processes.  Once the machines are reliable we might try to create a work cell with several machines.  When creating the work cell it may be necessary to slow one of the machines down to match the pace of another machine.

If the focus is on OEE and not flow, the report will show the machine that was slowed down not being very efficient and cause the OEE to drop.  When this happens a traditional thought process would be to insert more work in order to keep the machine running at full speed.  When this happens, the extra work inserted into the processes causes a jam up of the work trying to flow through the cell.  This will cause lead times to increase and WIP to build back up between the processes.

The ideal state is to get the work flowing without stopping as much as possible.  Make the 80% of the work that is the norm flow and learn how to manage the other 20%.  If the 80% can flow with no effort, it means less work for the supervisors and managers because now they are not worrying about the 80% only the 20%, which is better than worrying about all 100% and managing the WIP it brings.

I know it sounds like I am against OEE but I’m not.  It can be a beneficial metric when used properly.  Like analyzing one single piece of equipment that is the constraint in a process in order to increase the capacity of the entire process or flow.

We shouldn’t focus on the equipment.  We should focus on the flow of the product.  The product should flow like a river.