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Customer Focus Eliminates Waste

Recently, my wife had an experience with supplier that wasn’t focused on us as a customer and it created great waste for the supplier.

The shop was low on a particular candle that we buy from a local handmade supplier.  The product is great and it sells really well.  My wife emailed the owner to order more candles.  In the email, she asked if the owner could send a list of spring related scents as we phase out the holiday related scents, so we could pick out what we think our customers would like.

We didn’t hear from the owner for about a week or more.  Then the owner shows up with the candles we ordered plus three new spring scents.  We didn’t like one of the scents.  We said we wouldn’t take that one and discussed other possibilities to choose from.  A different scent was picked and a few days later the owner returned with the new scent.

When the issue of not responding was brought up to the owner, the reply was they were so concerned that we needed the candles right away that they just made them as quick as possible and brought them over.  My wife explained that we don’t need things immediately, especially after the holidays and if there is ever any question to just ask.

The owner wanted to please us, but didn’t focus on what was truly important to us which is the scent selection.  The owner ended up causing waste of defects/rework (making new candles she hadn’t made), waiting (us waiting longer to get the order filled) and transportation (driving to our store twice).

Have you or your company ever rushed a product or service to market because YOU thought that was what the customer needed and then if failed?  What were you focused on?

If you aren’t sure what your customer needs are…ask.  Be clear and focus on what they need, not what you think they need.

Guest Post: Lean Logistics: Going Lean is Going Green

Danielle M.Today’s guest post comes from Danielle M.  She has been a dedicated student of Lean Manufacturing methodologies since 2006. It was love at first sight when she read the motto, “Everything has a place; everything in its place” in her first copy of The Toyota Way.

Lean logistics offer a systematic way of managing logistics from when the order is placed until it arrives on a customer’s doorstep. They include a highly detailed organizational approach to managing logistics while cutting out the fat of inventory, fuel costs and middle-man handling. However, there are challenges to this approach to logistics of real world operations with factors, such as natural disasters, social chaos and unpredictable markets, that come into play. Yet companies and technologies have put lean logistics concepts into action with great results.

Challenges in a Lean Transportation System

The transportation industry is expected to see drastic changes in the near future, with the implementation of natural gas and EOBRs. However, according to the lean system of logistics, these changes are vital to the continual operation of the trucking industry. Robert Martichenko, the CEO of the LeanCor Supply Chain Group, notes that transportation is a necessary evil. He states that looking at transportation costs as a separate entity is a fruitless effort. Instead, consider the total logistics cost, which includes purchasing, transporting, warehousing and ordering costs. Martichenko continues by identifying five guiding principles associated with lean transportation including strategy, waste, performance, cost structure and daily event management. For example, by shipping according to customer’s demand, rather than storing products in warehouses until they are requested as does Amazon, lean logistics reduces the amount of work associated with inventory control and warehousing.

Lean Technology

While most in management consider lean logistics in conjunction with manufacturing, technology used for these companies also incorporate lean concepts. For example, the supply and demand giant Amazon has created Amazon Web Services that uses cloud computing to offer infrastructure investment (IT) services and application at a low cost. More importantly, cloud computing allows even the smallest of businesses to create customizable and full-service IT departments using cloud storage and capacity. This cuts out the extra cost associated with hiring and managing an entire IT department in-house. Businesses using cloud computing can purchase only what services they need, such as secure large-scale document housing, temporarily increased bandwidth and expansion of servers. Development and implementation of applications is also streamlined when using cloud services, which allows businesses to reduce the cost and time associated with customizing technology associated with logistics management.

Green and Lean Businesses

Going green for many in the logistics industry is an overwhelming process. Combined with the aspect of keeping with lean logistics, it can seem like an impossible task. However, green and lean are actually very similar, as lean logistics reduces the ecological footprint while streamlining the logistics process. One website focused on operations research with a green and lean foundation is GreenOR. This site offers suggestions for creating greener logistics, such as through energy efficiency, green supply chains, waste flow and renewable energy. For example, through the use a fleet management system such as those offered by Omnitracs, a trucking management team and its drivers are capable of cutting down on fuel costs by creating more efficient routes and by streamlining driving habits. The lean method is evident throughout the use of sustainable logistics methods, such as with the reduction of energy use and the establishment of green supply chains that reduce the amount of waste in the system.

Guest Post: Eliminating TIMWOOD

blogphotoToday’s post is from Tony Ferraro, on behalf of Creative Safety Supply based in Portland, OR (www.creativesafetysupply.com). Tony strives to provide helpful information to create safer and more efficient industrial work environments. His knowledge base focuses primarily on practices such as 5S, Six Sigma, Kaizen, and the Lean mindset. Tony believes in being proactive and that for positive change to happen, we must be willing to be transparent and actively seek out areas in need of improvement. An organized, safe, and well-planned work space leads to increased productivity, quality products and happier employees.

Unfortunately, waste is something that is all around us. However, even though waste is common it does not make it any more acceptable. When businesses implement lean tactics in order to enhance productivity and efficiency, the elimination of waste is usually one of the biggest challenges, yet offers the highest rewards when done effectively. The elimination of TIMWOOD can help save your business time and money, while also helping to add value and increase customer satisfaction. When we mention eliminating TIMWOOD, we are not talking about eliminating a particular employee or person. Instead, the mnemonic TIMWOOD refers to the elimination of seven different wastes. When it comes to productivity, the sad truth is that only about 5% of employee work time each day is spent on value added tasks that actually benefit the customer. However, knowing that statistic, it leaves many of us wondering “What are employees doing with the other 95% of daily work time?” Some may insist the rest of the time is spent on waste or tasks that essentially add no value to customer satisfaction. In order to combat unwanted losses in productivity and waste, we must first identify and understand TIMWOOD and how the elimination of the seven wastes can make a difference.

What Does TIMWOOD Stand For?

Many people choose to use mnemonics in order to help them quickly and easily identify multiple items. The mnemonic TIMWOOD is also used for that purpose. Let’s take a look at each letter and how it contributes towards the elimination of waste.

  • T- Transport: Even though product transportation is virtually unavoidable, the time and distance are both controlled variables. Many times products are moved multiple times before reaching their final destinations. However, each time a product is moved it runs the risk of being lost or damaged which in turn eliminates value.
  • I – Inventory: When working towards lean, it is important to avoid an abundance unused and unsold inventory that just sits around on shelves or in storage. Whether the inventory is of parts, partially finished products, or finished items, the more inventory there is, the higher the loss in value since funds are tied up in unsold goods.
  • M – Movement: This waste is similar to transportation waste, but instead of focusing on the loss of value with products in transport, this waste focuses on transportation or movement equipment. When trucks, hauling vehicles, and other movement devices are used for unnecessary long amounts of time and for unneeded tasks the value goes down while the opportunity for damage increases.
  • W – Waiting and Delays: When products are sitting in limbo, somewhere between the start and finish of production they are not adding value to the business and are thus creating waste.
  • O – Overproduction: The waste of overproduction has been considered one of the worst wastes. Money is wasted because businesses must pay employees to manufacture the parts, find places to store them, inventory them, etc. All of these are redundant costs that could be avoided.
  • O – Over Processing: Over Processing basically means to do more to a product than technically needed, and if a product is not 100% perfect it is rejected and therefore wasted. Even though businesses aim to provide customers with high quality products that operate as intended, small imperfections that would not impede function, use, or aesthetics should not be automatically disposed of and reworked.
  • D – Defects: Defects do not add value. When products are created with a defect that hampers the function they must be reworked and remanufactured. This causes a waste in production, materials, and other resources such as electricity and machine wear and tear.

Waste is Avoidable!

With the right amount of dedication and drive, anyone can succeed with the elimination of waste. However, the first step is to identify the areas of waste so tactics can be implemented to revamp processes and practices to help reduce waste and start improving productivity. The best part is that any business can benefit from waste removal; TIMWOOD is not geared only towards industrial or manufacturing businesses as it can also be effectively implemented in nearly any work environment.

Granddaddy of Them All

If you are a Big Ten or PAC-10 college football fan, I am not referring to the Rose Bowl.  I am referring to Over Production.  The granddaddy of all types of waste in the lean world.

Transportation, Inventory, Motion, Waiting, Over Production, Over Processing and Defects.  These are the 7 types of waste.

Free image courtesy of FreeDigitalPhotos.net

Why is Over Production the granddaddy of them all, because Over Production can lead to more of each of the other 6 types of waste.

Transportation: If you are over producing then you are transporting more product then you need to transport.  This could lead to paying for more trailers then you need affecting the bottom line directly.

Inventory: This is the direct result of over production.  If more is produced than needed, the extra product goes into storage and sits and waits until it is needed if ever.

Motion: Storing all the extra product in inventory takes up more room.  This means a bigger space is needed to do the same amount of work which leads to all the extra motion around the inventory.  If you put 10 skids between two machines instead of two skids then when the operator moves between the two machines there is an extra 8 skids of distance to walk.

Waiting: If the product is not needed, it goes into inventory where it sits and waits.  Waits to be sold.  Waits to be finished.  Waits to be thrown out.

Over Processing: The excess product can be reworked into a similar product with a few modifications.  This over processing what is needed to get the product right would not have happened if there was not excess product to modify.

Defects: Storing inventory can lead to crushed boxes destroying product or product that becomes outdated and must be thrown out.

Over production is the worst of the worst.  As hard as it might be to shift the mentality, it is better to see people standing around than it is to watch them produce more than is needed in order to look busy.

Importance of Stepping Back

Continuous improvement and driving out waste is a fundamental part of lean.  The constant pursuit of driving waste out and not letting it creep back in sounds great.  We should all do it.

This weekend was a great case of why we forget about waste and a method to help focus on waste.  My wife and I decided to clear out the garage and get it better organized.  We don’t do a great job of 5S in our garage and it is really apparent after we do a major project.  We end up with tools not put back in the same place, plus the addition of new tools to do the project. In the last year we have completed 4 big projects (built our kids a swing set, replaced all the railing on our second floor deck, gutted and remodeled our master bath and installed cabinets for a craft area).  Our garage was a mess.

I have mentioned before that my wife runs her own business on top of us doing all this.  During the clean out, she asked one simple question, “Why can’t we move the business stuff up by the door for of the third garage?”  Brilliant!!  Here is a drawing of the third car garage and what is stored in it.

(click on image to enlarge)

This is brilliant because the truck you see part outside the door is used for her business outings.  Now I can just open the door and load her stuff into the truck with very little movement.  Before, I had to move my car out or squeeze by it and carry her stuff to the back of the garage and never opened the third car door.  It eliminates motion/transportation waste of me carrying and my back really appreciate it.

Two years of doing this and it never occurred to either one of us until we stepped back, observed the area and really thought about it.

As lean leaders, we ask a lot of people to drive out the waste in their work.  Make it a little better everyday.  But if we don’t give them time to step back, reflect and ask questions then this is not as easy as it sounds.  A process has to be established that allows the employees to do this.  we can’t make grand statements and just expect things to happen.

It may seem easy to just reduce/eliminate the waste but when you are knee deep in the work you need the time to step back.  Don’t undervalue it.

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?

Automating Daycare…Just Like Manufacturing

The other night while I was watching TV I saw this Geico commercial.  I thought this was very funny.

I couldn’t believe someone would think about using robots in a daycare setting.  Then it hit me why this was so funny.  I have seen this time and time again in manufacturing so it was something I could relate to.

Have we gone so far as a society with trying to automate our manufacturing plants, car washes, even a drink dispenser at McDonald’s that everyone can relate to the daycare scenario?

The commercial is funny because it is ludicrous.  We would never consider this a viable option.  We want a human to interact with our children so they can adjust to their needs and solve problems that come up throughout the day.  We value having the mind that is attached to the hands and feet of the daycare workers.

So, why don’t we value the minds attached to hands and feet in a manufacturing environment?  In my career, I have come across many people that want to develop a “lights out” facility.  I even worked for a manager that was driven by the idea of a “lights out” facility.

We should value the minds of workers in all industries, from daycare to manufacturing.  Without their minds, how do expect to come up with improvement ideas?  How can the company continue to get better if everything is automated?  Just because it is automated does not mean it isn’t wasteful.  The perfect example is a conveyor belt.  All a conveyor belt does is automate the waste of transportation.  That conveyor belt isn’t going to come up with any ideas on how to eliminate or reduce the waste of transportation.

Automation can be a good thing.  We should consider robots and automation in environments that are dangerous for humans to work in (e.g. a continuous running paint booth or handling hot steel).  Computer automation can help calculate something that is value added and may take days for a human to calculate in a matter of minutes or seconds.

Unfortunately, a lot of engineers feel they need to automate everything in site to prove their value.  Having an engineering degree from Purdue University, I don’t feel the need to do this.  My first thought is how should the process work and then would automation add any value to that improved process.

So the next time you are confronted with an opportunity to automate something ask yourself, “Is this a daycare situation?”

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.

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Email and Transportation Waste

Technology has helped us in so many ways.  I know the perception is that lean thinkers do not like technology.  That is not the case.  We just like to be sure it supports our process and helps to eliminate waste.

With that in mind, has technology really helped us with waste in regards to information transfer?  Especially, in a building?  My observations say it has not in certain instances.  It has just shifted the waste from one form to another.

Here is the example that caught my attention.  Before email and transferring documents electronically we would have to send a paper copy through inter-office mail or mail it.  During that transportation time, the sender would contact the recipient and let them know it was coming.  The recipient was expecting it so when it arrived it would not sit very long before the value was added.

Now with email and notifications of a document being ready in a system, the recipient receives something immediately from the sender.  It is so quick, the recipient may not be looking for it, know it was coming, or even be available when it arrives in the inbox.  So now the work sits and waits and waits before the value is added.  So the total time between activities is not much different than the old way.

I’m not saying email and technology is bad, I’m just wondering did we shift the waste from being transportation to waiting?  Did we get to the root cause of why the waste even exists?  What are your thoughts?  I know it has helped, but how much?  Am I completely off base with this?

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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.

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