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Bill Waddell Highlights the Importance of Quick Changeovers

Recently, Bill Waddell published a great blog post highlighting the benefits of reducing changeover time.  The post was about reducing the manufacturing cycle which is the time it takes to produce every product.  Bill used an actual story from a client of his.

To be sure there were other inputs to the improvement – a simple demand pull method and more statistically valid methods of determining the inventory needed to cover the cycle, but set-up reduction was at the heart of it, and the improvements there translated into significantly less inventory, better on time delivery and lower costs.

Hearing stories like the one Bill wrote about just reaffirms the importance of reducing changeover time.  It is something that companies take for granted.  Most companies don’t see it as critical to achieving the business needs and goals.

Bill gives two great examples of where changeovers have been deemed to critical or their business would die.

I recently saw a cruise ship go through the change-over process and it is really quite similar.  Dock and disembark some 3,000 passengers and their luggage and take on 3,000 new ones, restock tons of food and supplies, perform necessary maintenance to the ship, then sail again all in the course of a few hours.  They have all sorts of specially designed devices and a very well trained crew of folks to do it … but they have to.  That turnaround is the key to their success.  In that regard they are a lot like the NASCAR or Indy cars – change-over fast or die.

Manufacturing companies don’t take this view.  My question is “Why not?”

If results like the company Bill talks about receives such incredible benefit that help them stay viable and profitable, why aren’t more companies doing it?  What other evidence is needed?

Does your company consider quick changeover critical to it’s success?

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Pit Stops and Lean

As I continue my mini-series on NASCAR leading up to the Daytona 500, I am going to share some thoughts on  Pit Stops.   Just probably not in the same way you have heard it before.

Most people who have been involved with Lean for any length of time have been exposed to the Pit Stop and the Pit Crew as an example for a SMED/Changeover activity.  It’s a fantastic real world example of the value of planning, organizing and choreographing a changeover.  Honestly, I don’t know what I could write about that aspect of the pit stop that hasn’t already been written by somebody else better than I could.  I’m much more interested in a bit of strategic change that I’ve noticed in the races that has some applications as well.

The aspect of the pit stop that I have taken a big interest in lately is the strategy around multiple changes happening within the same stop.  There are really two main activities in a pit stop, changing tires and adding fuel.  All else being equal, newer tires will allow the cars to be faster and, at 4 miles per gallon or so there is a huge need for fuel.  It takes about 6 seconds to change tires on one side of the car and 13 seconds to change tires on both sides of the car.  It’s about 6 seconds to add half of the fuel capacity and 13 seconds to fill it completely.  It becomes visible pretty fast that the times match up closely to provide several combinations.  For example, If I know that I need a half tank more fuel to finish the race, then I can put 2 tires on and get two improvements in pretty much the same time.  Or if I know I have to replace the tires, I can make sure the gas tank is filled up at the same stop and maybe not come in to stop as many times.

As last season went on and I watched the different strategies play out, my mind began to wander back to the plant.  With changeovers being a necessary fact of life, it’s a given to try to minimize the amount of lost time for the change.  But, if the changeover window is getting about as small as your resources allow, maybe the question shifts from squeezing out time to doing more in the time that you are down.  Can you bring in additional resources to do smaller PM items?   Is there some opportunity to utilize that idle machine operator time for training, housekeeping, or administrative tasks?  I have been in plants before and asked what work the operators were doing or could be doing while machines cycled.  I haven’t spent nearly as much time asking what they could do when the machine isn’t running.  There is potentially a gold mine of options to design our processes as we take smaller steps towards the ideal of zero downtime for changeovers.

NASCAR, Toyota, and Economies of Scale

In honor of the upcoming Daytona 500, I’m going to touch on a couple stock car topics this week.

In 2007, Toyota began racing its “Camry” in the top NASCAR series.  A year later, Joe Gibbs Racing switched brands and began racing Toyota branded vehicles.  For the first 4 years of the partnership, JGR built their own engines while TRD made the rest of the engines for the Toyota teams.  That arrangement is changed and TRD will now supply the engines for the Gibbs teams.

That, in itself, is not particularly interesting especially as it relates to Lean.  The part that I find most interesting is in a quote about the change from TRD’s president Lee White who says in this article, “Building for three teams or less is extremely expensive and inefficient. We’re hoping to recognize the tremendous economies of scale by spreading these costs across six or more teams in the future.”  As ‘Lean Thinkers’, one of the things we initially try to cut out of our vocabulary is the phrase “economies of scale”.   The phrase carries a stigma of filling warehouses with product to satisfy an outdated accounting metric.  What this highlights is that there is some real value to the thought as long as we aren’t using it to justify avoiding changeovers and over producing to keep machines busy.  The reality is that there is a significant investment to obtain a facility, outfit it, and hire and train the people that work in it.  A company can be the most Lean operation in the world in terms of their variable costs, but if the fixed costs are too high at the volume they run there isn’t much left to work with in looking at the ‘Profit = Price – Cost’ equation.  Instead of banishing the words “economies of scale”, maybe we should just move them out of the micro level (process and operation) and in to the macro level (overall customer demand).

There is another Lean theme that comes up in the article.  Both TRD and Joe Gibbs Racing representatives talked about the impact of this change on the people that work for them.  Both went out of the way to say that it would provide stability for the employees and that there wouldn’t be any layoffs as a direct result of the change.  I can only take those statements as face value, but it was refreshing to read about a move like this that wasn’t directly correlated to layoffs.