Lean forward
Magazine Article, Source : The Manufacturer US
Published : 18 May 2006 14:54
Martin Ashcroft reports on lean progress in US manufacturing, and the personal lean experiences of speakers at the first Manufacturer Lean Conference
April was a special month for the promotion of lean in US manufacturing. Firstly, the publication of the Lean Research Report by The Manufacturing Research Center plots where manufacturers are on their lean journey. Then, on April 25, The Manufacturer Lean Conference at The Hyatt Harborside, Boston, provided a roadmap and some high octane fuel to speed them along.
Every month, The Manufacturer publishes the enthusiastic accounts of US manufacturers who are implementing lean initiatives. Among this audience, lean is almost a religion, and the 30 to 40 companies we highlight every month demonstrate the practical benefits that lean offers. But anecdotal evidence is hardly scientific. To get a clearer picture of how lean is rolling out in US manufacturing, we surveyed our readership to find out how widespread the adoption of lean really is, and how far along the journey they have progressed. As contributors to the magazine tend naturally to be the ones who have lean stories to tell, the survey also gives an opportunity to hear from those who have not adopted lean practices and find out what’s holding them up.
The first survey question asked respondents to pick the most important attributes of a lean manufacturer, and over half chose continuous improvement. Given that this question contained 14 options, and respondents were limited to their top three, the results show a remarkable consensus. Almost half chose “responds quickly to the changing needs of customers,” while employee empowerment was not far behind in third place.
Identifying the benefits of lean, respondents cited improved efficiency and processes, followed by removal of waste as the two most associated with lean manufacturing. Reduced costs, lead time and inventory were also identified by almost two thirds. Reassuringly, only a small fraction saw workforce reduction, (the option thrown in to see if they were awake) as a benefit of lean manufacturing.
There is also a growing awareness that lean principles should not be confined to manufacturing operations, with almost nine out of ten recognizing their value throughout the entire organization. Action speaks louder than words, however, and manufacturers betrayed themselves somewhat in their answers to a later question about business initiatives, revealing that in practice, less than half had done anything about extending lean principles into business processes.
Speaking at The Manufacturer Lean Conference at The Hyatt Harborside, Boston, on 25 April, Gordon Hunter, chairman, president and chief executive of circuit protection specialist Littelfuse, exemplified these trends. “Littelfuse operates in a dynamic customer-driven environment,” said Hunter, confirming the survey findings about customer response. “They always want smaller size, lower resistance and, of course, lower cost.”
Littelfuse began to implement lean initiatives in its manufacturing operations in Des Plaines, IL, just over two years ago, and has already achieved significant results. One exercise involved restructuring a 90 foot long production line into a cell that reduced the occupied floor space by half. Workers are much closer to each other and cross-training has allowed job rotation; sharing of knowledge and experience has allowed process improvements to be made which have increased productivity by between 30 percent and 100 percent on some operations.
The next step, says Hunter, is to extend lean principles across the rest of the enterprise and into the supply chain. A pilot program on the engineering change order process has already proved “an excellent example of the applicability of this technique to a non-manufacturing/ administrative process.” Another future project he outlined was to “demonstrate to suppliers the lost cycle time associated with incoming inspection of their product, and cooperate to eliminate the need within our facility.”
Anand Sharma, author of The Perfect Engine, and president and CEO of TBM Consulting (sponsors of the Lean Research Report), commented on the proliferation of improvement programs in US manufacturing. “Every manufacturer we know is involved in an improvement program of one type or another,” he said, whether it be lean or something else. His words also reflect the survey findings. Asked which initiatives they were implementing, over three quarters of respondents were removing wasteful processes and following kaizen. Almost as many were practicing 5S. While the survey did have a few respondents who were not following any of the initiatives listed in the question, we did not give them an exhaustive list of options, confining ourselves to a narrow field of lean initiatives.
As he does regularly in his columns for this magazine, Sharma stressed the importance of customer focus, “anticipating the unarticulated needs of customers, being responsive in all customer experiences and offering a service solution that lasts well beyond the sale.” Addressing “the new market realities for 2006,” Sharma laid out a strategy he called “transformational management,” the key to which is leadership. “Lean leaders must have a clear, concise and compelling new vision to create excitement,” he said. “You must bring outside-in perspective within the organization to create a sense of urgency, then you must have ‘hedgehog’ focus on execution to achieve and exceed the vision. Finally, you must walk in your customer’s shoes and listen to uncover unique insights.”
For Peter Kampf, senior strategic initiatives manager for Raytheon Integrated Defense Systems, the lean experience is about the involvement of people. He explained how the company’s total employee improvement program (TEI) mined the DNA of its workforce to leverage early gains. Kampf spoke about transformational management, too, as a means to get the best out of people in a continuous improvement environment. Instead of the old command and control method, he said, “the essential task of management is to arrange organizational conditions so that people can achieve their own goals.” This is no text book theory. It works. Kampf reported a sales increase of 30 percent between 2003-2005, while operating profit increased 55 percent.
Lean events used to be held to persuade manufacturers to adopt lean principles. That’s no longer the case. As the Lean Research Report shows, manufacturers now realize they have to be lean, as Peter Kampf illustrated from his own experience of working for the US Navy. “The Navy used to encourage suppliers to adopt lean practices,” he said. “It doesn’t do that now, because lean is now accepted common sense and is expected.”
Lean events now have to focus on how to implement lean and keep it going. Jeff Whiteacre, value stream manager/lean champion at frozen seafood producer Gorton’s, is another whose experience revolves around the workforce. “Everyone needs to be involved,” he said. “Allow employees to own the change.” While Gorton’s has made huge advances in operational processes, Whiteacre also stressed the need to take lean beyond manufacturing into the whole enterprise, and to outside suppliers and service providers. During the educational stage at Gorton’s, one problem was communication between people who worked on different shifts. The solution was simple, as lean solutions often are. Video tapes were shot of how processes were carried out on each shift and then shown to workers on the other shifts. “I didn’t realize they did it that way,” was a common reaction.
Whiteacre gave a fascinating demonstration of supply chain value stream maps, showing how lead times and processing times have been falling since 1999 – the most striking factor being how much simpler the value stream maps have become. After one particular “kaizen burst”, a sawing process that used to take two hours was completed in three and a half minutes, using one person fewer, and with one saw, rather than two. A U-shaped cell was created with one piece flow, and adjustments made to the saw table, so that work in process was reduced from 56 slabs of frozen fish to just six. And who came up with the practical ideas? Not management, but the people who worked on the line. Whiteacre quoted a catalogue of measured improvements in every area of operation, all inspired by the workforce.
Gorton’s has managed to keep its lean drive going for some years, but others find it difficult to sustain momentum after the low hanging fruit has been picked and pickled. It gets harder as you climb further up the tree, and the temptation is strong to put up one’s feet and think the job is done. Kevin Prouty, senior director of manufacturing solutions for Symbol Technologies, calls the phenomenon the “lean dip”. Symbol won the Shingo Prize for Manufacturing in 2003 for its implementation of lean and continuous improvement, so Prouty was an excellent choice to address the Lean Conference.
Prouty warned against thinking of lean separately, as a project. It may start out that way, “but it’s part of the business. Lean is about continuous flow, not just of the product, but also of ideas.” Lean is a long arduous process, said Prouty, and the whole company must be committed, and after that, the suppliers. Complacency of thinking is a trap that will suck you into a lean dip while you are still congratulating yourselves. “Everyone should know that everything is up for grabs. If you think you have to stay the same when you get lean, you create the same environment you started with.”
Anand Sharma made a similar point. “Leadership is all about creating and sustaining a superior value proposition,” he said, and he had examples of clients who have succeeded in the sustaining game. Hayward Pools, seven years into its lean journey, increased sales by 25 percent between 1999 and 2003, while profitability grew by 17 percent a year. Productivity (sales per employee) rose over 50 percent. Sharma quoted equally impressive statistics from Pella Windows and Hubbell Corporation, stressing that what these companies have in common is a “visible, proactive and engaged leadership, with an unwavering commitment to achieve the vision.”
Andy Carlino, founder of The Lean Learning Center and author of The Hitchhiker’s Guide to Lean, focused on the choices faced by leaders when dealing with lean. “Lean is often a difficult choice between what is easiest for an organization or what is right for an organization,” he said. “Leadership is about making a choice. Lean leadership is about making the right choice.” Many lean programs fail, he says, because of the culture of the organization.
Culture can be an intangible concept to define, but Carlino has no problem with it. “Culture is common thinking,” he said, and went on to explain why it was therefore necessary to get the culture right. “Thinking drives behavior and behavior drives results.” Addressing delegates, he continued: “Most of you have accidental cultures. You didn’t make it happen that way.” But, he went on, “leadership is responsible for company culture. Get the culture right and everything else follows.”
Carlino used Toyota to prove his point. Automotive executives have been visiting Toyota plants for years, he said, then trying to copy the system in their own facilities. They mostly failed, even when they made carbon copies of Toyota’s tools and systems. Why? “Toyota is not afraid of showing you,” said Carlino, “because you can’t copy the way they think.”
