I've always thought that manufacturing companies don't actually put enough focus on manufacturing as a source of competitive advantage.  One of the supporting points for that position is what manufacturers measure...and don't measure.

Manufacturers tend to measure things that are directly or indirectly related to money.  They measure output, an indicator of cost and, perhaps, potential revenues.  They measure efficiency, again a measure of cost. They measure utilization, a measure of absorption of fixed costs.  Often, they'll measure scrap, another measure of cost.  They just about always measure budget variances.

Sometimes, thing customers complain about are measured like how often orders get to customers on time, or how often orders are incorrect.

To be sure, there's nothing at all wrong about paying close attention to these sorts of metrics.  Cost is, after all, something that must be controlled if the enterprise is to remain competitive.  And some of the yardsticks I've mentioned are as relevant to other performance factors (quality, customer service, equipment availability) as they are overall costs.

Still, most manufacturers tend to have few measures that really tell them how good they are at making stuff.  Or how good they are at all the things they need to do to make stuff.

In my experience, total changeover times are rarely measured.  Equipment availability is not as frequent a measure as one might assume.  And getting good data regarding reasons for poor availability (or for that matter, late deliveries, incorrect orders, poor efficiency, poor utilization, etc.) is generally pretty difficult.

I get confused, at times, when lean manufacturing literature goes right to descriptions of the benefits of manufacturing cells, pull systems, takt times, and application of six sigma tools.  Mind you, there's nothing at all wrong with those methods and many companies have found distinct value in employing them in their own operations.  But most companies could get as much or more benefit by simply doing a better job of measuring what they're doing right now...then acting on what those measures tell them.

Many of the companies I've worked for were implementing (or had recently implemented) either some new technology (e.g., ERP system, MRP system), new machinery/equipment, or some combination of the two (e.g., robots).  In my experience, companies don't typically do a good job of adding new stuff to their systems. 

Here's the typical scenario:

1. Management sees a problem or opportunity.
2. Management figures that a technological fix will work.
3. Salesperson tells management that what they are selling will fit perfectly with existing systems and will be robust enough to adjust to any possible condition.  Management believes the salesperson.
4. Salesperson tells management that, if the unlikely circumstance of a problem with their equipment/technology should arise, the vendor will respond immediately and effectively.  Management believes the salesperson.
5. Salesperson tells management that benefits are assured.  Management believes them.
6. Management buys new technology.
7. Management spends more time and money implementing new technology than anyone had anticipated. 
8. Organization resists changes to existing equipment technology.  Management acts puzzled, then angry.
9. New technology is harder to operate and harder to fix than than was the technology it fixed.
10. Management either sticks with the new technology and makes it work after much more blood, sweat, tears, time and money than it anticipated or chucks it out the back door and goes back to the old way of doing things after spending a lot of blood, sweat, tears, time and money in the failed effort to make it work.

I did some work for a company that was installing new equipment of a type that it was familiar with designed to do work that the plant was already doing.  In other words, the technology and it's application were not new.  The plant didn't get the new equipment up and running during the seven months I was in the plant.  It was anticipated to take about three months from start to finish.

To be sure, not all companies have these sorts of bad experiences but an article I read reported that studies show that more than half of all new technology and new equipment implementations are either outright failures and have to be discarded or end up over budget and over schedule, often by very large margins, before they finally work.  This pretty much matches what I've seen.  And even this doesn't account for problems that can occur for months and years after a faulty implementation.

Too often, new technology and equipment that is designed to save money hurts the organization in a variety of ways:

• It's hard to maintain,
• It's hard to operate,
• It's not robust, i.e., it's finicky and takes a lot of "tending to",
• It's not "operator friendly",
• It's down too much of the time,
• It's hard to maintain quality,
• It's hard to figure out what's going wrong when something is going wrong,
• Only "specialists" can or are allowed to work on the new technology or equipment.

All of this means higher rather than lower costs and reduced agility.  I'll talk about how to avoid all this in future posts.

This is the sort of thing that just drives me nuts.  (It's a post in another blog about Chrysler's efforts to get more customer oriented.)  Here's the link to the WSJ article that's the source of the blog post.

Let me see if I have this right...in 2008, Nardelli decides it's time to change the culture so that Chrysler is more customer oriented?

Look down in the WSJ article and find this sentence:

"They also saw a tendency for the company to use the cheapest parts available, even if that compromised quality."

Well, there you go...get all the top execs into a room and tell them to buy stuff that actually works.

Sheesh.  No wonder these guys make the big bucks.

Better late than never I suppose.

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If I came into your manufacturing plant and asked where the information needed for every setup (tooling, settings, initial rates, final rates, etc.) was kept, what would the answer be?  Too often, it's "I keep it right here," as the operator or setup person points to his or her head.

I'm surprised at how rare setup sheets are.  I know that creating setup sheets for every product a plant makes is a big deal, but creating one for each of the, say, 25 most frequently produced products should be that difficult.  But, too often, set up sheets don't exist for any products at all.  If they exist, they're old. 

The fact that setup sheets are available and up-to-date doesn't guarantee that operators won't make mistakes, but not having setup sheets at all just about guarantees that they will at one time or another.  It also means that teaching new operators or setup people will be that much harder.

I don't care what you're doing that you call "lean manufacturing", if you don't have up to date setup sheets for at least your most frequently made products,  you really aren't doing lean.

I'm a proponent of good data collection and analysis and that makes me a proponent of Six Sigma in general.  My experience, though, is that manufacturing organizations get interested in Six Sigma too early.  Sometimes they get interested in Six Sigma instead of what they should be paying attention to.

Let me give an example.

I'm working with a company right now that stamps small parts for commercial roofing.  Part of the stamping die is called a barb.  These barbs are thin, pointed pieces of metal that poke holes in the metal.  And they break...a lot.  When they break they have to be replaced and that takes several minutes.  So it's to everyone's advantage not to break barbs.

Now, the company could conduct an involved Six Sigma-type study as to the causes of barbs breaking with lots of data gathering and perhaps even some designs of experiments to test different barb configurations and composition.  Or the company can focus on making sure that their are standard procedures for things like die setup, line setup, barb placement and replacement, that operators are trained to those standard procedures and that their practice is regularly assessed to assure that they stick with the standard procedure.  And that's what this company is doing. 

The point is not that Six Sigma won't provide some benefits in this case.  The point is that, until the basic sources of variation are addressed, there's not much use in going after the more subtle sources of variation.  Given, especially, that the resources of most small companies are limited, they are better off paying attention to standardizing, documenting and teaching consistent practices than in training Black Belts.

In a recent post, I talked about my "value stream map conversation starting question":  "Would it be worth it to cut the cycle time of the process, even if the cost remained the same?"

In the case of the client referred to in that post, the question prompted the first insights for the team as to what lean manufacturing is really all about. 

The team I was working with at that particular client said they had never worked on a project that didn't have cost reduction as its primary motivation.  Ever.  So when I asked about possible competitive advantage that didn't have cost reduction as its foundation, they simply didn't know how to respond.  No one had ever presented such a notion, that companies could compete on something besides low cost.

Ever more often, I see the term "lean" to mean "low cost".  So, lean manufacturing becomes simply a rehash of old style, worn out manufacturing thinking and strategy: if we reduce the cost to zero, we'll have infinite margins.  Nobody puts it quite this way, of course, but that's really what the low cost strategy is all about.

This isn't to say, of course, that cost reduction has no place in manufacturing, or in lean manufacturing for that matter.  It would be silly to even suggest that.  It is to say, though, that the reductions in cost achieved through the application of lean manufacturing concepts and practices aren't, can't be, the primary motivation for implementing them.

So back to the value stream map...it's primary purposes are two-fold: to reduce the cycle time and to reduce the variability of cycle time.  Either is good.  In the case discussed in the previous post, the quoted lead time for the product was six weeks but the real cycle time varied between three weeks (not very often achieved) to more than a year (not very often).  If the value stream map allowed the company to hit the original six week lead time, give or take a few days, all the time, what would it mean to the business? 

But both is better.  A short, consistent cycle time is the essence of agility.  Agility provides sustainable competitive advantage.  Low cost doesn't.

I'm not giving YouTube reason to worry, but the blog stats show that I'm getting a few more readers lately.

Here's the deal...I'm eager to see some comments.  Let's get some discussion going, class!

Did you know you can also rate the articles I post?  Click on the title of an article and just that article will be brought up.  You can comment from there, provide a rating...and even print that article (see the little printer symbol above the copy?  Click on that.)

Especially, you folks who are getting my email newsletter and coming here.  A lot of you have your own lean and agile manufacturing experiences...share them with the rest of us.  (In fact, if any of you want to post once in awhile...I think I can arrange that.  I'll post just about anything on topic except insults directed to the blog owner.) 

I was facilitating a group as it developed a value stream map for one of its products.  I couldn't get much energy in the room.  They had been through similar mapping exercises before and nothing much ever came of them.  Previous mapping efforts had always been devoted to identifying costs that might be wrung out of the process.  Usually, it wasn't any trouble to identify costs.  The solutions, however, usually required investments of time and/or money and there was the rub. 

But we got through it, partly, I think, because I kept asking the question, "How long does this step take?"  rather than "How much does this cost?"

Even as the chart was going together and the data being brought to the table by the participants, they could see that this wasn't going to be their father's process flow map.  The attention was on time, NOT money.

It all came together when we finished the first draft of our current state map and I asked them to look carefully at what they had created and answer one question.  (Before I give the question you need to know that a six week  lead time for the product in question was quoted to customers.  And meeting this lead time was iffy for the company.)  The question was:

The first response was....silence.  After that....more silence.  It was apparent that no one had ever asked such a question.  Every improvement effort the team members had ever been a part of had cost reduction as a primary goal. Every meeting was devoted to making each unit of the product more cheaply.  I was asking a question that was difficult to answer...because they had never heard the question  (or anything like it) before.

The silence didn't last forever, of course.  In fact, one participant said, "I think I get, for the first time, what this lean manufacturing is really about." 

More about the specifics of their discussion and other thoughts on value stream mapping in an upcoming post so...stay tuned.

It's simple: label everything.  Where things go.  What things are called.  Which direction to turn wheels and knobs.  Does the lever get pulled up or down?  Label it.

I often simply use yellow duct tape or electrical tape and a black magic marker to make a temporary label during an action workshop.  It's true...this can look kind of tacky.  But it gives the operators a chance to "live with" the new labels for awhile before committing to something more permanent.  The idea is to get from "temporary and tacky" to permanent as quickly as possible.

In my experience, labeling goes a long way toward helping the organization Sustain the 5S gains.  Labeling allows just about anyone to walk through an area and tell if 5S policies are being adhered to or not. 

At one client, they've provided die carts for each work station.  The die carts are labeled with what's supposed to be on them.  Now, I don't know anything about the tools they need but, because of the labels, I can tell whether the die carts are in order or not.  Does the labeling guarantee that the die carts are always in order?  In a word...no.  But it allows me, or the supervisor, or the plant manager, or...whoever, to see that a specific tool is missing and to point it out to the operator before he or she needs it.  I can tell right away if Joe is missing his tin snips or not.  If he is, I can (and do) tell him to round them up before the next die change.