Lean & mean
Here's what lean means to manufacturing and warehousing today, nearly 50 years since Toyota introduced it on the production floor.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 3/1/2004
It's time to get lean.
No, this isn't about the Atkins diet. Instead, we're talking about the lean principles companies are implementing to take the fat out of every day processes from receiving through manufacturing to the distribution center's shipping docks.
In many instances, those new lean processes are enabled by automated and manual materials handling systems (see box: Lean materials handling below).
Actually, the concept is not new. Lean manufacturing was introduced by Toyota nearly 50 years ago. Since then, it has come to mean different things to different people. Talk about just-in-time deliveries, in-line parts sequencing, and smaller and more frequent deliveries and what you're really talking about is lean.
'The whole point of lean is to be extraordinarily customer focused and responsive,' says Stephen Parsley, principal engineer with SK Daifuku (800-253-1003, www.skdaifuku.com). 'You do that by getting rid of the fat in inventory, lead times, paper work and errors that prevent you from responding.'
To that extent, lean isn't a process or a technology. Rather lean is a philosophy aimed at reducing waste by optimizing processes across an enterprise, from the point of order to the point of delivery.
Done right, lean manufacturing and distribution leads to:
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reduced cycle times;
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the ability to deliver every time at the same cost to the business;
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predictable throughput times from better labor utilization;
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improved working capital positions from reduced inventory, and;
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lower warranty and customer service costs from improved quality.
Waste not
There are variations of lean. But at heart, each holds true to the mission of the original Toyota Production System, which was 'the absolute elimination of waste.'
Taichi Ohno, the father of lean manufacturing, identified 'seven deadly wastes' that prevent the value-added flow from raw materials to finished goods, says Doug Bonzelaar, partner, 2think (616-546-5483, www.2think.biz).
They are:
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Overproduction
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Waiting
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Downtime
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Unnecessary product movement
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Excess inventory
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Unnecessary motion
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Defective products.
But while Ohno focused on eliminating waste, he didn't simply slash payrolls or empty warehouse shelves.
Instead, a lean system seeks the right balance of inventory, equipment, and manpower to support a build-to-order environment rather than build-to-stock. It produces just what the customer wants, when the customer wants it.
The University of Michigan has identified three principals that define lean as it's practiced today.
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The batch-and-queue mode of operation, which encourages large-batch processing and focuses on the efficiency of machines and workers, is an outdated paradigm.
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Lean manufacturing, which views continuous one-piece flow as the ideal and emphasizes optimizing and integrating systems of people, machines, materials and facilities, can lead to significant improvements in cost, on-time delivery and performance.
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Lean manufacturing is a fundamental transformation of an enterprise and needs to be approached as a total organizational and cultural transformation.
That last principle may be the most important of all, according to William Neeve, president of Cycle Time Management (905-821-2444, www.cycletime1.com), a consulting company which helps companies implement lean systems.
'Unfortunately, most companies don't fully understand lean,' says Neeve, 'so they dabble here and there without a vision of what their operation can be.' The result is that they may actually end up creating bottlenecks rather than solutions. 'It doesn't do any good to focus just on work cells if you can't get orders from the administrative office to the plant,' says Neeve. 'That's why I tell companies they first need a vision of what their business and plant can become. Otherwise, they're just throwing darts at the wall.'
Elements of lean
Out on the floor, that theory is represented by several best practices.
First is total productive maintenance. That eliminates downtime. 'If your equipment isn't available when you're ready to make your product, you don't have reliable processes,' says Neeve.
The second is quick set up. 'You can't spend five hours setting up the line and run in batch mode in a lean environment,' says Neeve. 'You have to be able to changeover and set up quickly in order to be flexible.'
The third is error proofing. Quality inspection and rework miss the point of lean. 'The old way was to produce a batch of 500 widgets, and then rework those that were wrong,' says Jim Errington, manager of business development, Glovia International (800-223-3799, www.glovia.com). 'In lean, if something's wrong, you stop the line and fix it now.'
The fourth is that lean is visual. Toyota delivered parts to the line one tote at a time, and replaced the tote when a supervisor saw that it was empty. Today, that visibility extends across the supply chain with collaborative software tools that allow trading partners to electronically share forecasts and synchronize the delivery of parts and components with the final assembly. 'You need a graphical representation in your enterprise system to see what's happening on the floor or with your suppliers and your customers,' says Errington.
Get lean
How do you get lean?
The first step is to develop a vision of where the company wants to go. 'Once you know where you're going, you can architect a solution that applies lean tools where they work, modify them where possible, and apply a traditional systems approach where lean doesn't work,' says Doug Bonzelaar of 2think.
The next step is to roll lean out through a company. One approach is the 'divide and conquer method,' says Ed Romaine, director of marketing for Remstar International (800-639-5805, www.remstar.com).
A company divides a facility into areas and grades the performance of each area. The next step is to evaluate what improvements would have the greatest impact on the business.
Romaine adds that materials handling enables lean through solutions that lower picking costs; improve picking accuracy; increase throughput; reduce injury-related costs through better ergonomics; or maximize floor space.
Whatever the solution, a business stays lean the same way the rest of us lose weight: not by resting on our laurels, but by changing habits and sticking to the plan.
'The hard thing for people to understand is just because they've gone through their processes once and gotten value out of it doesn't mean they can rest on their laurels,' says Bonzelaar. 'Typically, you're going to go through each process in a work cell at least six times. Lean is about continuous improvement.'
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