November 5, 2016 / blade failure, bottlenecks, continuous improvement, customer delivery, lean manufacturing, material costs, optimization, productivity, quality, workflow process
Process improvement strategies are nothing new to manufacturing. As an industrial metal-cutting company in today’s challenging market, chances are you’ve spent time finding ways to reduce costs while increasing output to keep up with rising material costs and customer demands.
However, with a slew of improvement strategies, tools, and technologies available, many managers have lost sight of one of the simplest ways they can optimize the performance of their operations—process control.
Process control can help metal service centers ensure consistent quality, and minimize blade and machinery failures that can cause a workflow bottleneck. While there are many ways to implement process control, standardization is perhaps the easiest and most successful way to keep employees moving in the same direction.
Standardized practices, as defined by leanmanufacture.net, dissect larger, overall processes into simple, easy-to-follow steps that any operator can easily perform. This standardized approach allows operators to perform tasks the same exact way every time, which results in using resources, such as time and raw materials, more efficiently.
According to the Lean Enterprise Institute, standardized work “is one of the most powerful, but least used lean tools. By documenting the current best practice, standardized work forms the baseline for kaizen or continuous improvement. As the standard is improved, the new standard becomes the baseline for further improvements and so on. Improving standardized work is a never-ending process.” The approach consists of three elements:
- Takt time, or the rate at which products must be made in a process to meet customer demand.
- The work sequence in which an operator performs tasks within takt time.
- The standard inventory, including units in machines, required to keep the process operating smoothly.
Benefits of standardized practices include:
- Reduced re-work due to errors in the production process or between operators
- Reduced wasted time looking for tools, documents, or required inputs to complete tasks
- Better, more comprehensive, training procedures for new staff and retraining of existing operators
- Improved quality, if implemented throughout the production process and focus on quality at the source
Not convinced such a simple approach can make a big impact? Case in point—McDonald’s, the world’s largest restaurant chain. As cited in this article by consulting firm WIPRO, McDonald’s has standardized it “manufacturing” process for hamburgers so well that most of the organization is focused on growing the business, product development and marketing.
As described here, metal manufacturer ThyssenKrupp reduced work-in-process by 40%, reduced operator movement by nearly 5,000 feet per day and improved productivity by 9% by implementing standardized work at two working stations at its Sao Paulo, Brazil plant.
In today’s fast-paced market, process control is essential for metal service centers that want to grow against competition. According to the industry brief, Strategies for Improving Workflow and Eliminating Bottlenecks in Industrial Metal-Cutting, as the pace on the shop floor increases, metal service centers can’t afford a blade failure or costly mistakes that can slow down and stop production. Today’s metal service centers must focus on the process to identify and correct any mistakes on the shop floor immediately. By implementing standardized work, metal service centers not only gain insight into potential workflow bottlenecks, but also have a solid foundation for a continuous improvement plan going forward.
Even if your metal service center has a cutting-edge improvement plan in place, take a step back and look at your processes. Are they standardized? Have they gotten too complex? By going back to the basics and standardizing work practices, managers can optimize operations and ensure that every employee—and every process—is successful, every time.
What process controls and improvements have you implemented at your metal service center? Is standardized work one of them?
October 10, 2016 / agility, best practices, blade failure, blade life, continuous improvement, customer satisfaction metrics, industry news, lean manufacturing, operations metrics, performance metrics, predictive management, productivity
Thanks to advancements in machine-to-machine (M2M) and communications technology, many believe the manufacturing industry is on the brink of the “fourth industrial revolution,” also known as Industry 4.0. This concept has been widely discussed and promoted in Europe, especially by German manufacturers Siemens and Bosch, but the term is starting to gain traction in the U.S as well.
What is Industry 4.0?
Because it is a newer term, definitions for what comprises Industry 4.0 vary greatly. A report from Deloitte states that there are four characteristics that define Industry 4.0:
- Vertical networking of smart production systems
- Horizontal integration via a new generation of global value chain networks
- Cross-disciplinary “through-engineering” across the entire value chain
- Acceleration through exponential technologies
An article from Forbes defines Industry 4.0 as “a combination of several major technology innovations, all maturing simultaneously, and expected to have a dramatic impact on manufacturing sectors.” More specifically, the article states that technologies such as advanced robotics and artificial intelligence, sophisticated sensors, cloud computing, and the Internet of Things, are joining together to integrate the physical and virtual worlds.
Simply put, Industry 4.0 is the advent of the long-awaited “smart factory,” in which connectivity and advanced technologies are being used to streamline decisions, optimize processes, eliminate waste, and reduce errors.
Industry 4.0 In Practice
According to the Forbes article, Industry 4.0 has the potential to offer manufacturers three major benefits:
- Better transparency and agility
- More responsive to customer needs
- Self-monitoring products and services
What could this look like in your fabrication shop? EVS Metal, a precision metal fabricator headquartered in Riverdale, NJ, says here in a blog post that Industry 4.0 “will eventually impact the way we fabricate and machine both single items and finished products, from start to finish, including warehousing and shipping, whether we’re manufacturing full production runs, or single prototypes.”
On a small scale, fabricators can start by equipping components and machines with necessary Industry 4.0 features, such as sensors, actuators, machine-level software, and network access to measure productivity of metal-cutting equipment. For example, one metal service center, featured here in a white paper, is using an internal software system to automatically track the number of square inches processed by each band saw and each blade. At any point, the operations manager can go to a computer screen, click on a saw, and see how many square inches that saw is currently processing and has processed in the past. This has allowed the service center to easily track trends and quickly detect problem areas.
This, however, is only the beginning. Once a manufacturer starts capturing relevant data from multiple machines, this data can be further analyzed to detect patterns, helping managers forecast and, eventually, automate decision-making processes. In a metal-cutting environment, this might include predicting blade life and equipment maintenance needs, which would essentially turn disruptive, unplanned downtime to more anticipated, planned downtime. This could translate into more jobs completed on time.
The Time is Now
Like any trend, it will take a while for Industry 4.0 to fully take hold. However, many experts are saying that industry leaders are embracing this next generation of manufacturing and, more importantly, are starting to make investments.
A PwC survey encompassing 2000 participants across nine industry sectors has concluded that Industry 4.0 will revolutionize industrial production and that first movers are transforming into digital enterprises. According to the study, 33% of companies say they’ve achieved advanced levels of digitization today, and 72% of companies expect to achieve advanced levels of digitization by 2020.
While no one believes the changeover to Industry 4.0 capabilities will come cheap, more than half of companies in PwC’s survey expect a return on investment within two years. “The payoff will potentially be enormous, as competitive landscapes get redefined,” PwC states. “Industrial companies need to act now to secure a leading position in tomorrow’s complex industrial ecosystems.”
Is your fabrication shop ready to invest in Industry 4.0?
October 5, 2016 / best practices, continuous improvement, Cost Management, customer satisfaction metrics, Employee Morale, human capital, lean manufacturing, maintaining talent, operations metrics, operator training, productivity, ROI, Safety
Industrial metal-cutting companies know running an efficient and productive operation is imperative to keeping up with and, more importantly, staying ahead of the changing industry and customer demands. However, in industrial metal cutting—as well as any manufacturing process—an operation is only as good as its operators.
This is why operator accountability is so important. As reported in the white paper, The Top Five Operating Challenges for Metal Service Centers, as more metal service centers rely on automated technology, managers need to work closely with machine operators to ensure their knowledge and skill sets align with the company’s technology assets and productivity goals. The objective is to encourage employees to take ownership of their impact on the operation so they not only care about the quality of their work, but also understand the role they play in the company’s overall success. Working closely with employees to create a culture of accountability can help metal service centers achieve the operational excellence they desire.
According to an article from IndustryWeek, accountability can be a powerful manufacturing tool because it is a broad-based effort to define and track an organization’s standards. “Accountability systems serve to prompt and encourage people to keep their promises to each other,” Jon Thorne, senior consultant, Daniel Penn Associations, says in the IW article. “Accountability monitors whether promises are being kept and reminds us to hold up our end of the bargain. When we all keep our promises to each other the result is human reliability. And with human reliability, your organization can accomplish anything.”
While using accountability to improve your metal service center operations is not an exact science, it is systematic. In fact, accountability is a set of systems that overlap and reinforce each other, according to the IW article. The following three systems are just a few ways manufacturers can boost accountability (You can read the full list here):
- Customer satisfaction. Measuring your service to internal customers puts interdepartmental cooperation on an objective basis: You confront issues rather than people. The plant manager’s role is to insist that the organization seek out and satisfy its customer’s needs, but it is the customers and suppliers who decide how to do it.
- Weekly staff meetings. The idea sounds simple, but having a regular and consistent forum where information can flow both ways enables employees to hold management accountable by asking questions and discussing any issues. Two meetings per week are recommended.
- Action item lists. Many times, regular staff meetings result in new policies and processes, or changes to those that are existing. Keeping an action list or planner helps prioritize activities, highlights important information, and enables employees to hold each other accountable for keeping the agreements they’ve made.
Another simple strategy is to regularly share performance reports with employees by either posting them or discussing them in staff meetings. As stated in the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, sharing report results encourages accountability, provides motivation, and reminds operators that they are a critical aspect of the company’s success. This approach falls in line with the culture of lean production environments, and research has shown it positively affects employee morale.
How does this help optimize operations? Although employee investments are often hard to quantify, the following two manufacturers have seen measurable results after implementing accountability practices:
- As reported here, a maker of bulked continuous filament carpet yarn recently realized an estimated $27 million in savings a full year ahead of schedule by focusing on accountability. According to the article, an eight-person team used a Six Sigma process to improve operator, equipment and product accountability by defining metrics, creating and following processes, tracking data and making improvements based on their findings.
- Ocean Spray, the largely known beverage and cranberry food product company, also saw huge improvements at its manufacturing facility in Kenosha, WI. The plant, which was nicknamed “Broken Down Kenosha,” was transformed into what the company’s executives now call “New and Improved Kenosha” due largely to its focus on company culture and workforce accountability. As reported by Training magazine, the tactic didn’t come without some financial investment, but the company said the cost far outweighed the outcome, which resulted in safety, cost, and material use improvements.
Running an efficient operation is essential to every metal service center, but far too many managers fail to understand the role their operators play in their optimization efforts. By implementing a few processes that hold operators accountable for their actions, managers can create a culture in which employees care about their jobs and, even more so, the long-term success of the company.
What accountability practices have you implemented at your metal service center?
October 1, 2016 / best practices, continuous improvement, customer delivery, lean manufacturing, LIT, productivity, quality, resource allocation, root cause analysis, workflow process
Being a leader in today’s industrial metal-cutting industry is tough. In addition to dealing with external challenges like high inventory levels, falling commodity prices, and a slowdown in China, managers still have to deal with operational pain points such as process and workflow bottlenecks, resource allocation, and delivery schedules.
As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, thriving in today’s unstable market requires metal-cutting executives to focus on continuous improvement. “Whether implementing a lean manufacturing tool to improve processes or investing in training to develop people, proactive leaders are focused on making positive changes in their operations so they can quickly respond to today’s changing customer demands,” the eBook states.
One methodology many leaders are using as part of their continuous improvement initiatives is DMAIC. As explained here by American Society for Quality (ASQ), DMAIC is a data-driven quality strategy used to improve processes. Although it is typically used as part of a Six Sigma initiative, the methodology can also be implemented as a standalone quality improvement procedure or as part of other process improvement initiatives such as lean.
DMAIC is an acronym for the five phases that make up the process:
- Define the problem, improvement activity, opportunity for improvement, the project goals, and customer (internal and external) requirements.
- Measure process performance.
- Analyze the process to determine root causes of variation, poor performance (defects).
- Improve process performance by addressing and eliminating the root causes.
- Control the improved process and future process performance.
According to an archived article from Six Sigma Daily, the heart of DMAIC is making continuous improvements to an existing process through objective problem solving. “Process is the focal point of DMAIC,” the article explains. “The methodology seeks to improve the quality of a product or service by concentrating not on the output but on the process that created the output. The idea is that concentrating on processes leads to more effective and permanent solutions.”
DMAIC can be used by any project team that is attempting to improve an existing process. For example, SeaDek, a manufacturer of non-skid marine flooring, used DMAIC methods to reduce major inventory stockouts in 2015. The company went from 14 major stockouts in 2014 to one stockout in 2015, resulting in a materials cost savings of more than $250,000 and improving on-time delivery from 44 percent the previous year to 95 percent in 2015. (You can download the entire case study here.)
Paul Bryant, senior OPEX manager of LENOX Tools, says there are two key ways companies can identify when and where to apply the DMAIC method:
- Target highest scrap cost by machine and/or cost center
- Areas with low production yield or poor quality (i.e., high defective parts per million)
In his experience, Bryant says that DMAIC can be especially helpful in lowering scrap costs. Last year, LENOX made the strategic decision to start making wire internally; however, the blade manufacturer was working 10-15 hours overtime to keep up with weekly demand. “Using the DMAIC process, we reduced scrap and improved production speeds by 19.2%, resulting in $75K plus an additional $30K in overtime reduction,” Bryant says. “In 2017, we expect to pick up an additional 15% in production using the DMAIC methodology.”
Of course, the real payoff is what DMAIC can bring to the customer. “The ultimate expected benefit is that customers receive products of the best quality, on-time, and at lowest possible costs,” Bryant says.
Could DMAIC help your industrial metal-cutting organization? To learn more about this Six Sigma continuous improvement tool, click here for a detailed DMAIC roadmap or here for an overview and short video tutorial.
September 30, 2016 / best practices, bottlenecks, continuous improvement, KPIs, lean manufacturing, LIT, operations metrics, performance metrics
Most companies that have adopted lean manufacturing strategies know the importance of measurement. When a manufacturing operation can quantitatively assess their performance, it can start to make significant improvements and set realistic goals to stay competitive. In fact, according to a series of case studies on high production metal-cutting companies, measurement was noted as a key best practice.
However, metrics are only meaningful if they are tied to strategy. That’s where key performance indicators (KPIs) come into play. Unfortunately, some companies fail to understand the purpose of KPIs and, therefore, are unable to take full advantage of the benefits they can provide. All KPIs are metrics, but not all metrics are KPIs. Understanding the difference is critical.
What are KPIs?
KPIs are the measurements selected by a company to give an overall indication of the health of the business. KPIs are typically dominated by historical, financial measurements, but most experts agree that they are more valuable if they also include operational measurements. Unfortunately, choosing the right KPIs to track isn’t as easy as it sounds and takes careful consideration.
There are hundreds of KPIs that can be measured, but experts suggest that companies focus on a select few. According to the University of Tennessee’s Reliability and Maintainability Center (RMC), manufacturers need to make sure all KPIs are aligned with the company’s business goals and strategy. Tasks should be explicit and all actions should support a larger goal. When it comes to KPIs, it is quality—not quantity—that matters.
Choosing the Right KPI
Because they are tied to strategy, KPIs will vary by organization. However, an article from Red Lion outlines seven of the common production KPIs used on automated plant floors:
- Count (Good or Bad). An essential factory floor metric relates to the amount of product produced. The count (good or bad) typically refers to either the amount of product produced since the last machine changeover or the production sum for the entire shift or week.
- Reject Ratio. Production processes occasionally produce scrap, which is measured in terms of reject ratio. Minimizing scrap helps organizations meet profitability goals so it is important to track whether or not the amount being produced is within tolerable limits.
- Rate. Machines and processes produce goods at variable rates. When speeds differ, slow rates typically result in dropped profits while faster speeds affect quality control. This is why it is important for operating speeds to remain consistent.
- Target. Many organizations display target values for output, rate and quality. This KPI helps motivate employees to meet specific performance targets.
- Takt Time. Takt time is the amount of time, or cycle time, for the completion of a task. This could be the time it takes to produce a product, but it more likely relates to the cycle time of specific operations. This KPI helps manufacturers quickly determine where the constraints or bottlenecks are within a process.
- Overall Equipment Effectiveness (OEE). OEE is a metric that multiplies availability by performance and quality to determine resource utilization. Production managers want OEE values to increase because this indicates more efficient utilization of available personnel and machinery.
- Downtime. Whether the result of a breakdown or simply a machine changeover, downtime is considered one of the most important KPI metrics to track. When machines are not operating, money isn’t being made so reducing downtime is an easy way to increase profitability.
Making it Count
For many managers, the above list and the resulting data may feel overwhelming. Others may be so afraid of missing something that they end up measuring more information than necessary. For example, research from the Advanced Performance Institute finds that less than 10% of all the metrics that are collected, analyzed and reported in businesses are ever used to inform decision-making. That means 90% of the metrics are wasted, or worse, used to drown people in data while they are thirsting for insights.
The question then becomes: How many KPIs are enough? Or, even more so, how much data is too much?
An article from IndustryWeek suggests that companies follow the “Rule of Three,” which involves dividing all KPIs into organizational categories and then focusing on the top three metrics within that category. This is a good way to keep managers focused on improvement without data overload.
If you are still unsure where to place your focus, the University of Wisconsin-Madison recommends that manufacturers in 2016 zero in on KPIs that fall under the following four themes:
As a high production manufacturer, odds are that your ball and roller bearing operation is already tracking some of the above KPIs. However, if that is not the case, now is the time to start identifying a few to measure. If the process feels overwhelming, do some research, ask your supply chain for help, and get started. In the words of quality expert H. James Harrington: “Measurement is the first step that leads to control and, eventually, to improvement.”
August 20, 2016 / best practices, continuous improvement, lean manufacturing, LIT, maintaining talent, operator training, preventative maintenance, workflow process
Improving productivity is a constant goal for any manufacturer. In today’s increasingly competitive and uncertain market, machine shops are no different.
To boost efficiency, manufacturers have long implemented lean manufacturing practices as part of their overall operational strategy. As cited in this eBook, 5 Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, there are a host of lean manufacturing tools to consider, including:
While lean manufacturing practices are anything but new, machine shop managers can take a more simplified approach to improve efficiency at even the most customized shop set-up. According to LeanProduction.com, manufacturers can experience great improvements in productivity through small daily increments. The idea is to identify and fix one problem each day using three questions (one each for Information, Focus, and Action) to identify problems from plant floor information, decide which issue to fix, and then take action to correct it. (Click here for some examples of the three questions.)
A Modern Machine Shop blog, however, notes that while improving productivity is essential to maintaining competitiveness, productivity on the shop floor comprises much more. “Productivity on the manufacturing floor depends on a combination of efficient employees, equipment, and processes,” the blog states. “Before you can adopt any method for productivity improvement, you’ll need to measure your existing output levels, create a baseline, and implement solutions for measuring change.”
The blog article goes on to list eight steps to help manufacturers design a more productive and successful manufacturing floor. Read on for a summary of five of the eight steps (Read all eight steps here.):
- Examine the workflow. Analyze the people, technology, and processes required for production, as well as the procedures, communication tools, and resources available. Identify the pain points and note how changes would impact the overall system.
- Update business processes. Share workflow problems with project managers to make improvement plans. Evaluate performance and interpret any appropriate changes.
- Invest in continued employee education. Be sure to keep your workforce up-to-date on the latest machining and manufacturing technologies. New advancements often require new skills for certain tasks and regular training will keep your machine shop running efficiently.
- Get smarter machining tools. Even if your workforce is trained, they can only work as fast as their tools. While advanced machinery can be costly, the investment pays off in the long run by helping companies stay competitive.
- Invest in maintenance. While new equipment can boost productivity, it also requires maintenance to ensure that it continues working efficiently. Employees should know how to troubleshoot in instances of system downtime, quickly find root causes of errors, and then correct them. Remember to consider the process, the blueprint, and the material when making adjustments.
Whether you run a high-mix or a small-scale shop, increasing productivity is essential to remaining competitive in today’s industrial metal-cutting industry. While there’s no sure-fire formula when it comes to boosting productivity, taking the time to drive improvements across the shop and making small adjustments from a baseline assessment can make a big impact.
What strategies has your machine shop used to increase productivity on the floor?
August 15, 2016 / benchmarking, best practices, bottlenecks, continuous improvement, KPI, lean manufacturing, performance metrics, productivity, quality, supplier relationships, value-added services, workflow process
As part of the push toward continuous improvement, more and more industrial metal-cutting companies are measuring overall equipment effectiveness (OEE). This is definitely a good trend, as measurement is the first step in making quantifiable change. However, some companies have jumped on the OEE bandwagon without being fully informed, which can cause a lot of misunderstanding and misuse of this important metric.
Knowing what OEE is—and what it isn’t—is the only way to make sure you are using it effectively. The following is a quick primer.
What is OEE?
According to leanproduction.com, OEE is a best practices metric that measures the percentage of production time that is truly productive. It takes into account all six types of loss, resulting in a measure of productive manufacturing time.
In simple terms, OEE can be described as the ratio of fully productive time to planned production time. According to leanproduction.com, it can be measured in one of two ways:
(Good Pieces x Ideal Cycle Time) / Planned Production Time
Availability x Performance x Quality
(You can find a more detailed description of the calculation here, as well as a sample calculation.)
A plant with an OEE score of 100 percent has achieved perfect production—high quality parts as fast as possible, with zero down time. While that’s ideal, it’s not quite possible in the real world. According to oee.com, studies show that the average OEE rate among manufacturing plants is 60 percent, which leaves substantial room for improvement. Most experts agree that an OEE rate of 85 percent or better is considered “world class,” and many companies use that number as a long-term goal for their operations.
Managers can use OEE as both a benchmark and baseline. Specifically, leanproduction.com says it can be used to “compare the performance of a given production asset to industry standards, to similar in-house assets, or to results for different shifts working on the same asset.” It can also be used as a baseline “to track progress over time in eliminating waste from a given production asset.”
How to Use—and not Use—OEE
It’s important to note that OEE is not necessarily a useful metric for every manufacturing operation. “Measuring OEE only makes sense if you are trying to meet a certain demand on a daily basis,” explains Paul Bryant, senior OPEX manager, LENOX Tools. “If you have a problem with yield, then I would definitely suggest OEE.
“If you have a problem with inconsistent production output and/or downtime on a piece of manufacturing equipment, OEE is a great way to measure and identify how to where to improve your operations,” Bryant continues. However, for smaller metal-cutting operations that are more custom and low volume, Bryant says OEE probably isn’t worth measuring.
Bryant also says that a lot of shops use OEE incorrectly. Specifically, he says there are two common ways metal-cutting operations misuse the metric:
- Too Focused on the Benchmark. “Everyone knows that world-class OEE is 85%, but too many people get hung up on that number and how their shop compares to it. When I look at OEE, the number doesn’t mean much to me. I look at three components—availability, performance, and quality—and then break them apart and look for opportunities. That is the true essence of OEE: To find opportunities that help keep your machine and production system optimal.”
- Too Focused on the Operator. “Another misuse is that people use OEE to measure the operator. OEE is used to measure equipment. If you run into an issue with the metric, look at the machine first. There are so many variables, don’t always assume it is the operator. Once you’ve evaluated the machine, look at the material and then the operator last.”
An article from IndustryWeek (IW) adds that OEE should be used as an improvement measure, not a Key Performance Indicator (KPI). It also states that it is best used on a single piece of equipment or synchronized line.
Finally, if your shop is ready to start measuring OEE but doesn’t know where to start, enlist the help of some key suppliers. As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, many companies don’t possess all of the knowledge, resources, or infrastructure necessary to do in-depth measurement. This is where a willing supply partner can help. In today’s competitive market, there are plenty of equipment and tooling suppliers that are willing to share their knowledge and experience as a free, value-added service.
A Helpful Tool
There is no question that OEE can be misused and misunderstood, but as the IW article reiterates, it is not a “bad metric.” When calculated and applied correctly, OEE can be a very useful tool to help industrial metal-cutting companies quantify and uncover new improvement opportunities.
August 10, 2016 / best practices, continuous improvement, Cost Management, lean manufacturing, LIT, material costs, resource allocation
For any industrial metal-cutting operation, inventory management is an ongoing challenge. Ensuring the right amount of inventory in-house while simultaneously working to reduce overall operating costs is not an easy task.
This has been especially true in recent years. As we reported here in our annual industry outlook, high inventory levels were a major challenge for fabricators in 2015.
As a result, many fabricators are now re-evaluating their inventory management tactics, and more and more shops are moving away from holding large amounts of inventory. According to industry survey results published by The Fabricator, a little more than half (54 percent) of the respondents said they hold less finished-goods inventory today than they did three years ago. “Custom fabricators don’t want to drown in inventory,” states an article from thefabricator.com. “In fact, for fabricators having customers requiring them to hold finished-goods inventory, those inventory requirements aren’t as high as they once were.”
Many metal-cutting shops are also starting to use more remnants, a strategy often known as “pick for clean.” As explained in the white paper, The Top 5 Operating Challenges Facing Fabricators’ Metal-Cutting Operations, this tactic “promotes a cleaner inventory, which makes shops safer, more productive, and profitable.”
Of course, there are many strategies shops can use to better manage their inventory. In fact, supply chain expert Lisa Anderson says she could write 100 articles on the subject because there are so many ingredients to an effective inventory management system. However, Anderson does say there are three key questions every manager should address when it comes to inventory:
1. Do you have the right talent? “It is surprising how often this question is overlooked, yet it is #1 to achieving bottom line results,” Anderson writes. “Although inventory could be considered a ‘basic’ fundamental skill and is often on the resume of every supply chain and operations job applicant, all talent is not created equal.”
She also says there is vast confusion surrounding inventory skills and which skills are needed for which job functions. For example, do you need inventory control? Inventory accuracy? Inventory planning? Supply chain planning? Inventory tracking? “Most of these roles require far more than inventory expertise,” Anderson explains. “They require the right combination of analytical skills and communication skills.”
2. Is your system working? This question, Anderson notes, should cover both process and system. “The second most common mistake is to try to put a square peg in a round hole,” she writes. “Instead of dictating the process or system based on whatever worked in a previous life or what your ERP system says is ‘best practice,’ I’ve found the key to success is to understand what works for each particular situation (unique combination of people, processes and systems).”
3. Have you eliminated complexity? “I gain tremendous traction in delivering bottom line results solely from eliminating complexity,” Anderson writes. “I find that complexity is enticing – the more complexity, the more people feel valued and indispensable. So, instead of getting lost in complexity, encourage and reward simplicity.”
Anderson suggests getting a team together to brainstorm ways to unscramble the complexity. In what ways can you categorize your inventory in order to prioritize? Can you start with one machine? One commodity? One location? One customer? One supplier?
In the end, taking a close and honest look at your inventory management system can have real, bottom-line results. As Anderson explains, if you improve inventory accuracy by 10%, you can end up with anywhere from 10 to 100+% improvement in on-time delivery and/or efficiency. If you improve inventory turns by 10%, you could end up with more cash and increased efficiency. Put simply—it pays to evaluate your inventory management system. How does yours stack up?
August 1, 2016 / best practices, Cost Management, Employee Morale, lean manufacturing, LIT, productivity, quality, Safety, strategic planning
Over the last decade, the term “lean” has become synonymous with “success” in manufacturing. In today’s market, only the “leanest” survive.
This trend has hit almost every segment of manufacturing, although some have jumped on the bandwagon faster than others. At this point, most leading industrial metal-cutting organizations have incorporated some form of lean principle into their operation, and those that haven’t are starting to consider it. In fact, our eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, recommends that lean manufacturing should be at least part of your operational strategy.
However, is it possible for your metal-cutting operation to be too lean? According to a recent article from EHS Today, the answer to that question is yes. “The more you reduce costs – the more you do with less – the more you believe is accomplished and the closer you approach maximum efficiency,” the article states. “The drawback of this popular leadership strategy is that the line of acceptance is a moving target with the point of failure centered about the moment of imbalance.”
The article goes on to say that over time, “the reduce-reduce strategy” can stretch an organization beyond the elastic limit, usually without anyone noticing. “Like our bodies, organizations need minimal resources to function properly,” the article explains. “Year-over-year reductions compounded with additional performance requirements will cause the organization to rely on calories they do not have to burn.”
How do you know if your organization has reduced beyond its limits? Below are a few warning signs, according to EHS:
- Untimely and numerous early retirements by the most knowledgeable resources.
- Unexpected and voluntary separations from early and mid-career professionals.
- Organizational culture indifference to change.
- Missed commitments.
- Lower quality productivity.
- Higher injury experience.
- Lower customer satisfaction.
- Higher absenteeism.
- Lower standard of excellence.
- Loss of leadership credibility.
- Long working long hours.
- Organizational undercurrents of frustration.
Another dangerous outcome of being “too lean” is being unable to adjust to changing market conditions. An article from Lean Manufacturing Tools explains: “Too many people in the past have used a lean definition that concentrates purely on waste reduction and have created anorexic processes that fail as soon as customer demand changes.”
This is not to say that lean manufacturing tools are short-term and cannot be used over a long period of time. Instead, experts suggest that lean manufacturing tactics should evolve as a company evolves and improves. In addition, this article from IndustryWeek says that management needs to be sure they treat lean manufacturing as “a way of life,” not just a project.
Like anything, the key is finding a balance. Efficiency and waste reduction should be a priority, but they can’t come at the cost of safety, quality, or the overall financial health of the company. As the article from EHS explains, “Success comes in realizing how much ‘efficiency’ is the right amount to preclude organizational excellence from reaching the point of inevitable failure.”
Are there any areas of your industrial metal-cutting organization that have become too lean?
Choosing Between Lean Manufacturing and Six Sigma for your Ball and Roller Bearing Manufacturing Operation
June 30, 2016 / best practices, continuous improvement, lean manufacturing, productivity, quality
At this point, most high production manufacturers know that continuous improvement (CI) is imperative to their success. However, knowing where to start can often be both intimidating and frustrating. Active change takes time and costs money, so managers need to be sure they are strategically choosing the right methods to achieve their operational goals.
For many companies, achieving CI includes applying some type of formal methodology. Two of the most widely used tools are lean manufacturing and Six Sigma. While both of these methods can be used to improve productivity and profitability, their approaches are not the same. Understanding the difference between these two methods is important not only for managers trying to choose the right organizational improvement program, but for those who are considering combining the two.
To help ball and roller bearing manufacturers make the right choice, the following is a quick primer on lean manufacturing and Six Sigma:
Over the last ten years, the term “lean” has moved beyond an industry buzzword to an industry expectation. As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, most manufacturers have incorporated some form of lean principles into their operations. From ball and roller bearing manufacturers like Timken and CPM Bearing to manufacturing giants like Toyota and Nike, leaders are applying lean principles to every aspect of their business to achieve productivity and agility.
But what does it mean to be “lean?” According to leanproduction.com, lean manufacturing is “a collection of tips, tools, and techniques that have been proven effective for driving waste out of the manufacturing process.” Toyota is credited for developing it in the 1980s, and over the years it has been used by manufacturers worldwide to improve all facets of the manufacturing business, from quality assurance to human resources.
Below are some key attributes of lean manufacturing, as defined here by The Process Excellence Network:
- Focuses on Eliminating Waste. The main goal of lean manufacturing is to eliminate waste and superfluous processes in order to reduce production time and costs. Toyota defined seven types of waste, including transport, inventory, motion, waiting, overproduction, over-processing, and defects.
- Uses Simple Tools. Lean tools are relatively easy to understand and can be used by anyone in the organization. Examples include 5S, value stream mapping, kanban, and poka-yoke (error proofing).
- Culture-Oriented. For Lean to be successful, experts agree it has to permeate the business silos and receive universal backing amongst senior management and employees. It typically is only used in manufacturing applications.
- Fast implementation. Lean’s strength is its quick turnaround. Immediate benefits relate to productivity, error reduction, and customer lead times. Long-term benefits include improvements to financial performance, customer satisfaction, and staff morale.
iSixSigma defines Six Sigma as “a disciplined, data-driven approach and methodology for eliminating defects in any process, from manufacturing to transactional and from product to service.” It was developed in the mid-1980s by Motorola engineers who were unhappy with traditional quality metrics. In response, they developed a new standard, as well as the methodology and needed cultural change associated with it. Six Sigma gained popularity in the 1990s after General Electric adopted it as part of its business strategy.
Below are some key attributes of Six Sigma, as defined by The Process Excellence Network:
- Focuses on Quality. The main purpose of Six Sigma is to limit defects and variability in business processes to achieve overall process improvement. Using statistical methods, teams identify errors and then work to eliminate them as much as possible. Perfect performance is the goal.
- Uses a Sophisticated Toolset. Six Sigma tools typically require more extensive training, including formal engineering skills and use of sophisticated software. It uses two project methodologies: DMAIC (define, measure, analyze, improve, control) and DMADV (define, measure, analyze, design, verify).
- Built Around Process Improvement Teams. Six Sigma’s implementation is based on a dedicated improvement team. This team is divided into hierarchies based on a “belt” accreditation system that ranges from “black belts,” who lead teams, down to “white belts,” who are still learning the basics and can’t yet participate in project teams.
- Multifaceted Methodology. Six Sigma can be used in a manufacturing environment, but it also can be used for error reduction in non-manufacturing fields. Broadly speaking, it provides companies with a framework to train its employees in key performance areas, shape strategy, align its services with customer needs, and measure and improve the effectiveness of business processes.
The above is just a brief overview of two of the most widely used improvement methodologies and only touches on some of their main characteristics. For some industry perspectives on the pros and cons of each method, read this series of editorials published by the American Society of Quality (ASQ). For information on how managers can strategically utilize lean and Six Sigma methods together, check out the recent article, “Lean and Six Sigma: Synergy at Work,” from Modern Machine Shop.
How are you applying lean manufacturing or Six Sigma tools in your manufacturing operation?