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It is always important to recognize people’s efforts and to strengthen team building.  One way to achieve this is through the inclusion of memorabilia that states the purpose of a certain project or cross functional team, or even a company wide goal that may span years.  Here are a couple of examples of a button and a mug that were handed out during my days at General Cable.  The button, which lists the plant’s Lean Sigma goals of reductions in Scrap, Rejections and Inventory, were handed out to all associates working in the plant. 

The mug, which simply states “General Cable Lean Associate”, was given to anyone who participated in any Kaizen event.  Several other items were used for motivational purposes and to show the company’s gratitude.  I still have several golf shirts and a jacket that say similar things to these on them.

The main point is to allow every associate and every team member to feel that they are part of something bigger – something worth working towards.  Along the way, each one of these buttons, mugs, etc. remind you of the task at hand.  General Cable’s Lean Sigma program has worked well for the company since its launch back in 2002 (BGC).

Although SMED was clearly developed during the 1900s, there are several cases from throughout history that can be referenced when trying to explain SMED.  The very basic idea of SMED, i.e. preparing and completing External setups while the machine/process is working on the current job, while streamlining Internal setups, etc. (if you are new to SMED, check out my article SMED…What is SMED?), can be seen in common processes that are around us.

The most common of these, which is more or less the cliche reference now because it seems every Lean trainer uses it, is the quick changeover of tires witnessed by Nascar and Indy racing fans at every race.  When you think about changing a tire, you think of several elements, like:

1. Getting your tools
2. Loosening 4/5/6 nuts
3. Jacking up your car
4. Pulling off the old wheel
5. Putting on the new wheel
6. Individually picking up the nuts and resetting them
7. Tightening the nuts
8. Putting the old tire in the trunk
9. Putting your tools away

I assume it is something like that for most people.  Now, the quick connection they make here is that in an auto race, the pit crew is completely ready with their power tools, 1 guy jacks up the car, another takes the a) in cart racing, 1 (and only) nut off while maintaining it in the tooling head, b) in Nascar, the nuts are fixed to the wheel so only tightening is required, another guy removes and replaces the tire, and the nut(s) is tightened, etc.  You can see how that works.

Well, when thinking about SMED, there is a better example that I like to use.  So far, I’ve been a little on my own referencing this and some of my professors had a hard time grasping the concept of this being related to SMED.  Eventually, they saw my point and some of them use it in their classes to this day.  Unfortunately, this is not the most pleasant example of a SMED because of the nature of the resulting action, but it really gives a solid example of SMED.

Since the beginning of firearms, reloading has been a critical, essential, and frankly, a crucial aspect of warfare.  For any of you who are not that knowledgeable when it comes to the evolution of the gun, I’ll fill you in.  After the first couple hundred years of firearm development, the gun was stuck in a period of lackluster progression.  At the time of the American Revolution, muskets, a smooth bored muzzle loading rifle was the most widely used rifle in the world.  Due to the loading nature of the musket, a well trained infantryman could fire about 3 or 4 shots per minute.  Looking at this from a process standpoint, this gives us (assuming ~3 shots/minute):

• Setup time:  20 seconds (includes aiming)
• Cycle time:  ~1/10th of a second

The process for loading a musket, looks something like this:

1. Stand the musket on its butt end, with the open barrel facing the sky
2. Get out the gun powder (from a powder horn)
3. Pour the required amount of powder down the barrel
4. Put the powder horn away
5. Get out the ball (i.e. bullet) (from a snap enclosed pouch)
6. Put the bullet in the barrel
7. Pull out the rifle’s ram rod from its casing on the side of the barrel
8. Stick the ram rod in the barrel and push the bullet fully down
9. Put the ram rod back in the side casing
10. Pick up the musket
11. Cock the hammer (which contains a piece of flint for creating a spark)
12. Get out the powder
13. Pour some more powder on the flash pan
14. Put the powder horn away
15. Aim the rifle
16. Pull the trigger and hope the flint sparks and ignites the powder, firing the gun

That’s a lot to accomplish in 20 seconds. A small pictorial of an American Revolutionary War soldier is below (source:  http://www.americanrevolution.com/images/ContinentalArmy.jpg)

Like many processes, loading a rifle was held back because quicker changeovers were not possible due to technological issues and lack of progress in that area.  Slowly, the technology did improve and the flint-lock hammer was replaced with a preloaded percussion cap (like the kind you can buy in a toy store that makes a loud pop) that could easily be placed on a pin, before being struck by the hammer. 

This removed the clumsly action of pouring small amounts of gun powder into the flash pan while attempting to hold your composure.  Around the same time, ammunition companies began packaging the gun powder and the bullet in a paper encased packet that required the soldier to reach into only 1 compartment instead of 2.  The soldier would simply pull out the packet, bite off the end, and stick it in the front of the barrel.  So, after removing these small, but time consuming external elements, the process looked something like this:

1. Stand the musket on its butt end, with the open barrel facing the sky
2. Get out the paper packet
3. Bite off the top and place the rest of it in the barrel
4. Pull out the rifle’s ram rod from its casing on the side of the barrel
5. Stick the ram rod in the barrel and push the bullet fully down
6. Put the ram rod back in the side casing
7. Pick up the musket
8. Cock the hammer
9. Get out the cap
10. Place the cap on the pin
11. Aim the rifle
12. Pull the trigger

This type of rifle was used extensively around the time of the American Civil War.  At the same time, bullets were being improved through new packaging techniques that encased the bullets and powder in a metal shell that could be loaded into a moveable turret as you would expect to see on a revolver.  Much like the one pictured below:

It took another 25 years or so for this technology to be moved from pistols to rifles, but eventually, the rifle went from muzzle loaded to a pump action carbine to a bolt action rifle to the extremely fast firing machines guns used today.

With the development of the encased bullet, there was no longer a need for a percussion cap and the loading process looked something like this:

1. Preload a small batch of bullets into a ‘clip’ (does not need to be done during battle)
2. Attach the clip to the gun (again, the first clip can be done during down time)
3. Aim the rifle
4. Pull the trigger
5. Repeat steps 3 & 4, as necessary

So, as they do, things progressed and eventually you end up with a mechanism like we see today.  Almost all of the external setup elements have been removed from the gun loading process, however, there is always room for continuous improvement. 

An Uzi (shown), can fire up to 1,200 rounds per minute (rpm)!  That’s 20 rounds per second or .05 seconds per bullet!!  Some machine guns are capable of firing at rates up to 3,000 rpm.

By advancements in technology that allowed external setup times to be reduced and internal setup times to be eliminated (and the streamlining of all other internal setup times), firearms have seen a throughput increase of 40,000% (using the musket and uzi as examples – (1,200 rpm / 3 rpm) x 100%)!  That kind of increase is unheard of in most manufacturing operations, but can be seen from time to time when dealing with automation.

 How about that for an example of how much improvement you can get from a SMED?!

Over the years I have collected several quotes from various Lean and Six Sigma professionals, historians and trainers.  I have listed most of them below and will continue to expand the list as time goes on.  Enjoy!

“A bad system will defeat a good person every time.” – Deming 

Eliyahu M. Goldratt & Jeff Cox gave us several good quotes related to manufacturing in the book,  The Goal:  Excellence in Manufacturing (later called The Goal:  A Process of Ongoing Improvement).  The book, a work of fiction, leads readers into the concept of the Theory of Constraints through an easy to read novel setting.  These are some famous quotes from The Goal:

“Make the bottlenecks work only on what will contribute to throughput today … not nine months from now. That’s one way to increase capacity at the bottlenecks. The other way you increase bottleneck capacity is to take some of the load off the bottlenecks and give it to non-bottlenecks.” - quote from The Goal

“If we reduce batch sizes by half, we also reduce by half the time it will take to process a batch. That means we reduce queue and wait by half as well. Reduce those by half, and we reduce by about half the total time parts spend in the plant. Reduce the time parts spend in the plant and our total lead time condenses. And with faster turn-around on orders, customers get their orders faster.” - quote from The Goal

“An hour saved at the non-bottleneck is a mirage.” - quote from The Goal

“I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.”  - quote from The Goal

Again, with any of the lean quotes I present, I try to be as accurate as possible.  If you see any discrepancies, please email me.

Taiichi Ohno (1912 – 1990) was a Toyota executive and one of the chief architects of the Toyota Production System.  He wrote several books about Toyota, most notably Toyota Production System:  Beyond Large-Scale Production and Workplace Management.

These are some famous Taiichi Ohno quotes:

“All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.” - Taiichi Ohno

“The only place that work and motion are the same thing is the zoo where people pay to see the animals move around” (not exact phrase) - Taiichi Ohno

“Where there is no Standard there can be no Kaizen” - Taiichi Ohno

“Why not make the work easier and more interesting so that people do not have to sweat?  The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity.  People don’t go to Toyota to ‘work’ they go there to ‘think’” - Taiichi Ohno

“Costs do not exist to be calculated. Costs exist to be reduced.” - Taiichi Ohno

“The key to the Toyota Way and what makes Toyota stand out is not any of the individual elements…But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner, not in spurts.” - Taiichi Ohno

“The more inventory a company has, the less likely they will have what they need.” - Taiichi Ohno

“Data is of course important in manufacturing, but I place the greatest emphasis on facts.” - Taiichi Ohno

Again, with any of the lean quotes I present, I try to be as accurate as possible.  If you see any discrepancies, please email me.

Shigeo Shingo (1909 – 1990) was an Industrial Engineer who worked as a consultant with a number of companies before finally being brought in to further develop the Toyota Production System.  His most notable contributions and accomplishments include SMED (quick changeovers), Standard[ized] Work and methods of error-proofing.

These are some of his most famous quotes:

“The most dangerous kind of waste is the waste we do not recognize.” - Shigeo Shingo

“When you buy bananas all you want is the fruit not the skin, but you have to pay for the skin also. It is a waste. And you the customer should not have to pay for the waste.” - Shigeo Shingo

“A relentless barrage of ‘why’s’ is the best way to prepare your mind to pierce the clouded veil of thinking caused by the status quo.  Use it often.” - Shigeo Shingo

“Improvement usually means doing something that we have never done before.” - Shigeo Shingo

“The best approach is to dig out and eliminate problems where they are assumed not to exist.” - Shigeo Shingo

“Are you too busy for improvement? Frequently, I am rebuffed by people who say they are too busy and have no time for such activities. I make it a point to respond by telling people, look, you’ll stop being busy either when you die or when the company goes bankrupt.” - Shigeo Shingo

Again, with any of the lean quotes I present, I try to be as accurate as possible.  If you see any discrepancies, please email me.

How to calculate OEE: 

OEE stands for Overall Equipment Effectiveness and is the most comprehensive calculation used to determine how effectively you are utilizing your equipment.  It is an important part of total productive maintenance, can help better calculate efficiency losses, and is useful when incorporated into the cycle time calculations.

In order to calculate OEE, you will need to collect some data:

1. PERFORMANCE RATE – The Performance Rate is calculated by looking at the actual operating speeds of your machines in comparison to the operating speeds that they were originally designed for those machines or the products being run on them.
   • Product A was designed to run on Machine 1 at speed setting 10, the highest speed possible.  Due to the machine’s old age and fragile state, it can only run safely and produce good versions of Product A at a speed setting of 6.  The Performance Rate would then be 60% (i.e. 6 / 10
2. AVAILABILITY RATE – The Availability Rate is calculated by measuring any production losses due to downtime from equipment failing, breaking down, etc. as a portion of scheduled manufacturing time.
   • Machine 1 runs 36 hours for every 40 available manufacturing hours due to breakdowns.  The Availability Rate is then 90% (i.e. 36 / 40).
3. QUALITY RATE – The Quality Rate is calculated by determining the amount of losses due to quality issues like scrap and rework as compared to the total parts processed.
   • Machine 1 ran 100 pieces of Product A, but only 98 met the quality specifications.  The Quality Rate would then be 98% (i.e. 98 / 100).

 Now, once you have these 3 important measures, the calculation of OEE is very simple:

          PERFORMANCE RATE  x  AVAILABILITY RATE  x  QUALITY RATE

Using the examples from above (Performance Rate = 60%, Availability Rate = 90%, Quality Rate = 98%):

          60%  x  90%  x  98% = 52.9%

 Essentially, the OVERALL EQUIPMENT EFFECTIVENESS (OEE) is the % of effective use that you are getting out of your piece of equipment.  It is a compounding, thorough look at your true equipment uptime as a percentage of your total available manufacturing time.  This metric is important for loading workcenters and determining capacities because you are completely aware of a particular machine’s (or machine type) total ‘real’ uptime.

Questions people often have:  What are the long term effects of Lean Manufacturing?  What does Lean Manufacturing do for a company?  What are the benefits of Lean Manufacturing?, etc.  I guess the proof really is in the pudding.  People can deny it all they want, but Lean works.  This simple post, showcasing three stocks that have all had been significant in the progression (and in a lot of cases, regression) of manufacturing principles and techniques, tells the story.  In the chart below, I’ve overlaid the following stocks, Toyota (NSYE:  TM), Ford (NYSE:  F), and General Motors (NYSE:  GM) for the comparison of their performance over the past 30+ years.  Now, when you compare stocks, they are graphed by % gain over time, allowing you to see the real difference in the stocks. 

Look at how GM (BLUE LINE) remains rather flat, while Ford (YELLOW LINE) makes some gains and then retraces, and then, then look at Toyota (BLACK/RED LINE), who makes consistent gains, retraces ever so slightly, and then makes bigger gains, and so on.  That consistency and longterm growth is what all Lean companies are striving for; that is why you implement Lean.  Seriously, look at the difference in % gain (which essentially shows you what % you would have made on your money if you invested it at the time this chart began):  Toyota topped out at 9,500%!!!, F topped out at 1,200%, and GM barely cracked 200%.  It’s even more stimulating to see that at the present time (far right side of the chart), GM and F are both close to being a wash.  Well, in reality, you might have even lost money due to inflation, the time value of money, opportunity cost, etc.  And then look at Toyota at the present time, if you’d put money into this stock in 1974, you would be up a mere 6,500% – not bad for an automaker stock!!  This is always a good chart to show to anyone that doubts the significance of Lean Manufacturing and the exceptional company that Toyota has been, and will continue to be in the future.  An even better chart is this next one, which shows the difference in these stocks over the past 10 years. 

If you would have invested in Toyota 10 years ago, you’d have made 95% on your money, almost doubling it, assuming you still held it today.  In fact, at one point you could have sold it at the high time in early 2007 and made ~165% on your money.  And then there’s Ford and GM.  If you would have put your money into either one of these companies 10 years ago, you’re looking at losses of up around 60% for GM and 65% for Ford.  When the times got tough, Toyota started to diverge from F and GM, and both of these graphs illustrate this point perfectly. 

 I’m a fairly active trader always willing to make investments in companies just making the transition to Lean.  Now, a lot of companies do not come right out and say it, but you can sometimes find this information through press releases or news coming out of publicly held companies, either by information you gain from your trading company or by using a resource like BigCharts.com (which is where this chart was generated!).  Not only are Lean Manufacturing companies worth working for and doing business with, they are also very much worth a little piece of your portfolio.  Cheers!

“Kanban is like the milkman. Mom didn’t give the milkman a schedule. Mom didn’t use MRP. She simply put the empties on the front steps and the milkman replenished them. That is the essence of a pull system”
- Ernie Smith, Lean Event Facilitator in the Lean Enterprise Forum at the University of Tennessee

Now, this quote was passed on to me in an email about two years ago.  I don’t know if the quoted individual is correct, so if anyone knows otherwise please email me.  I have heard several similar quotes regarding Kanban and the milkman, as well as other metaphors regarding replishment systems.  Regardless, I wish that more people were aware of this reference.

I don’t know Mr. Smith, but I’m sure he’s a good man (I base that off of the fact that he’s spreading the good word of Lean Manufacturing!).  I like the way that this quote brings all readers into understanding through the use of something so natural and simplistic as a reference to one’s mother.  Surely, if your mother could participate in a Lean activity like a self replenishing pull system without even knowing it, then it must work pretty well if it never interrupted her daily schedule and provided for exactly what your family needed!  Now, I know not everyone was raised around their mother, but the simple idea helps bridge the gap between a supposed structured and rigid system imposed by managers to one of simplified flow.

Sometimes, people new to supermarkets, kanban, and pull system really have a hard time getting it.  They think that you can plug and play supermarkets filled with nice stacks of kanban cards and everything will simply work because you designated an area for it.  In regards to this quote, I’ve seen several cases where a supermarket has been setup and the operations around it just pull and make whatever the MRP is telling them to do.  Again, supervisors and managers want to make it look like things are always running at 100%.  I want nothing less than 100%! I hear that way too often.  That’s why it requires a complete effort from all within the company, but back to the quote.

A good portion of the time, a company will not have the luxury of producing only 3 or 4 types of products.  Usually, you’re looking at figures that are closer to 10, 50, 100 or even 1000′s of different products; all that need to be scheduled and made at different times, in different amounts, throughout the year.  This is where it gets interesting and you need to do some math.

You probably wouldn’t be resorting to the use of a supermarket if you could establish Continuous Flow in the first place.  So, now after you’ve relayed all of your equipment into cells based on the results from your recently done Product Family Matrix, you’re running the numbers to see what your least common denominators are.  Usually (going on basic assumptions) as you go upstream in your process you will see fewer and fewer variations of WIP that will later be transformed into an array of possible product configurations.  Well, it’d be nice to have each of these stored in a supermarket so that you could just pull what you need and then replace it, but most likely, it won’t be that smooth.

In most of the companies I’ve worked in, there have been so many product possibilities that I’ve had to go with the good old 80/20 rule and ended up with a small amount of supermarketed items that in the end will make most of my products.  The 80 stands for 80% of your total production, and the 20 stands for 20% of your total product count.  Clarifying that, it means that 80% of your production can be accounted for by 20% of your products.  A very simple example of this:  You make 5 products in your bread making cell – White, Wheat, Rye, Whole Grain, & Pumpernickel.  For every 20 that you sell, it breaks down like this:

• White:  16 (accounts for 80% of sales)
• Wheat:  1 (5%)
• Rye:  1 (5%)
• Whole Grain:  1 (5%)
• Pumpernickel:  1 (5%)

So, in this very simple model, you’d use a pull system on White bread because you consistently require it based on customer demand.  Think of that scenario, but blown across 1000′s of products.  Instead of one item in your supermarket, how many would you have?  5? 10?  Figuring that out is simple enough, it is getting it to work that is the hard part.

MRP, Master Schedulers, Planners, etc. – they can all screw it up just by doing their job.  They have to be involved and MRP systems need to be adjusted, either through a built in function to work within such systems or manually, if no such feature exists in your current software.  It’s one thing to instruct someone to not make a product because there is already a supermarket full of it across the aisle, but it’s another thing to get them to actually practice it.  Supermarkets, kanbans, pull systems, whatever name your company uses, act independently from supervisors, planners and MRP. 

Kanban the Milkman makes the rounds, quietly moving product into empty spaces left by products used only minutes before; making and replenishing his whole way back to the most basic raw materials.  He’s good and if you just let him do his job – you’ll be all the better for it!!

‘Lean Lexicon, a graphical glossary for Lean Thinkers’

Compiled by the Lean Enterprise Institute

While this is not your traditional style of book, the ‘Lean Lexicon‘ contains so much great material that I just had to post it in a book review.  This book is just what it says it is, ‘a glossary for Lean Thinkers.’  Whether you are new to Lean Manufacturing or consider yourself an expert, this would should be in your Lean library.  The book is sorted in alphabetical order, and setup so that related topics point to one another, which makes for easy connections between lean tools and applications.  Also, another benefit is the inclusion of historical figures such as the Kiichiro Toyoda, Sakichi Toyoda, Shigeo Shingo, and Taiichi Ohno.  It lists everything you could ever want to know about Lean (at least from a basic definition basis), including some lesser known topics like A-B Control, Chaku-Chaku, Demand Amplification, Kaikaku, and Capital Linearity.  These are the types of topics that hold Lean together and are known to Lean experts, but often overlooked by rookie Lean implementors who stick to the mainstream tools like 5S and SMED.

 Overall, there is very little that this book could be accoused of lacking, and I can’t think of anything off the top of my head.  Add this book to your Lean library and pick up a copy for your coworkers or employees so that you, and they, can reference topics in the midst of a Lean transformation!