May 5, 2014 / best practices, continuous improvement, Employee Morale, human capital, lean manufacturing, LIT, productivity, Safety, workflow process
Most manufacturing executives know that developing a lean culture requires top-down support. Everyone—from the CEO and vice president of operations to the maintenance manager and band saw operator—needs to be on board, or it’s just not going to work.
Unfortunately, many companies have discovered that creating a successful lean environment isn’t as easy as it sounds. In fact, as this blog post explains, there are a lot of ways to do this incorrectly. For instance, leadership is not “committed” simply because they have enthusiastically funded a lean program. They need to actually be involved. At the same time, key improvement decisions can’t be made in an ivory tower.
Change—effective change—needs to start at the ground level, where the work is happening and where the value is created. This place, defined as “gemba” in lean manufacturing terms, is believed to be the key to unlocking true transformation.
“Gemba,” the Japanese term for “actual place,” has been redefined by lean thinkers as the place where value-creating work actually occurs. In an IndustryWeek blog post, Bill Wilder, director of The Life Cycle Institute, calls gemba the “beating heart” of an organization, which for manufacturers, is rarely found in the marketing department or an executive desk. Instead, it is almost always found on the production floor.
This means that to make any real change, metal service center executives need to literally take a walk—known as the “gemba walk”—to see their operation from the front lines. Getting out of the office and taking a gemba walk, Wilder says, is the best way for leadership to see, firsthand, what works and doesn’t, and many experts believe it should be the first step in any lean transformation.
In theory, this sounds great, but what should a gemba walk look like in practice? Here are a few tips we gathered to help you “walk the talk” and put you on the path toward an effective top-down lean program:
- Have a plan. This SlideShare presentation, “Gemba 101,” states that there are four steps to gemba success: know your purpose, know your gemba, observe your framework, and validate. You can read the slides to get more information, but the takeaway here is that a gemba walk should be structured. It is not the same as Management By Wandering Around (MBWA), which is often casual and unstructured. In contrast, a gemba walk has a specific purpose. Lean expert James Womack says he has 10 questions he asks every time he takes a gemba walk. You can check out those questions here in this essay, along with a great case study.
- Think—and walk—horizontally. According to Womack, value flows horizontally. Unfortunately, organizations are organized vertically. As described in this IndustryWeek article, the key to a successful gemba walk is to select a value stream, gather all the managers from all the vertical functions that touch the value stream, and then walk together. This likely includes CEOs and COOs, customers, suppliers, and value-stream leaders.
- Respect and Engage. As this iSixSigma article states, a gemba walk is not an opportunity to find fault or enforce policy, nor is it a time to solve problems or make changes on the spot. Instead, it should be “a time of observation, input and reflection.” Leadership should go on the walk with an open mind and welcome suggestions from operators and other shop floor employees. A good example of this more team-centric approach is described in the white paper, The Top Five Operating Challenges for Metal Service Centers. As the paper states, one service center continuously asks operators for ideas to make its cutting processes safer and faster and, when appropriate, brings those ideas to fruition. This tactic has not only improved operational efficiency, it has also shown operators that they are a critical aspect of the company’s success.
April 28, 2014 / continuous improvement, Cost Management, human capital, industry news, lean manufacturing, LIT, predictive management, preventative maintenance, strategic planning
For most of the industrial metal-cutting industry, things are staring to look up. Earlier this month, the World Steel Association released its Short Range Outlook for 2014 and 2015. The forecast projects that global apparent steel use will increase by 3.1% in 2014 and by 3.3% in 2015. Regional projections are also positive. While the U.S. showed a decrease of -0.6% in apparent steel use in 2013, the global association forecasts that apparent steel use in the U.S. will grow by 4.0% in 2014 and by 3.7% in 2015.
However, even with its positive forecast, World Steel expects continued volatility and uncertainty to create a challenging environment for steel companies this year. And many metals executives are feeling that uncertainty. As stated in LIT’s 2014 Outlook for Industrial Metal-Cutting Companies, most industrial metal-cutting companies are only cautiously optimistic about today’s market.
This is especially true of many forging industry executives, who were encouraged by sales increases in 2012, only to be disappointed with no growth and some decreases in 2013. Specifically, the Forging Industry Association (FIA) reports that total industry shipments for the custom impression die forging industry were at $7.313 billion in 2013, down slightly from $7.337 billion in 2012. Meanwhile, 2012 total industry shipments by the custom open die forging industry were 15% below 2012, and shipments for the custom seamless rolled ring forging industry were basically flat. (You can view FIA’s final sales data here.)
As forging executives move into the second quarter, there are some trends unfolding in 2014 that they should be watching closely. A recent column from IndustryWeek does a good job of describing five higher level trends that are affecting most of the manufacturing industry. These include the following:
- Increased reliance on automation and robots
- Rapid prototyping
- Smaller orders
- Leaner factories
On an operations level, there is perhaps one prevailing trend—the relentless push for continuous improvement. In an uncertain market, operations managers are realizing they have no choice but to optimize and become more agile. In some cases, this requires capital investment, but many industry leaders are discovering alternative ways to improve operations. LIT’s benchmark study of industrial metal-cutting companies, for example, identifies three key areas where managers can make improvements without adding new capital expense:
- Invest in Smarter, More Predictive Operations Management
- Embrace Proactive Care and Maintenance of Tools & Equipment
- Invest in Human Capital
Of course, there is no crystal ball for what 2014 will bring, and as the last few years have taught manufacturing executives, nothing is ever certain. In the end, the key will be for forging companies to strategically consider industry trends (i.e., smaller orders), while also proactively improving what is happening inside their doors.
March 20, 2014 / customer delivery, lean manufacturing, production planning
There is no question that lean techniques have changed the face of manufacturing. Kaizen programs, 5S, value-stream mapping, and other lean strategies have rendered impressive results in high-volume manufacturing plants around the world. However, not every lean principle is an off-the-shelf solution for operational efficiency. This is especially true for high-mix, low-volume manufacturing environments.
Machine shops that cut metal are often juggling multiple jobs—many of them custom and almost none of them the same. Production requirements, lead times, and due dates can vary, which makes forecasting and traditional lean concepts difficult to apply. That’s not to say, however, that high-mix operations can’t get lean. As the following examples demonstrate, lean and other improvement techniques can be modified to increase efficiency in even the most customized job and machine shops.
- Improve where you can. According to the book, Made-to-Order Lean by Greg Lane, the primary focus for high-mix, low-volume operations should be “eliminating non-value-added activities and instituting improvements on the most repetitive jobs, a strategy that gives you more time to produce your low-volume work.” In other words, get lean where you can and as much as you can. This video posted by Modern Machine Shop describes the lean journey of a job shop that only produces hundreds of parts per month. While it wasn’t able to apply the entire lean philosophy to its operation, it was still able to implement some principles and has seen significant results, including increased sales.
- Identify patterns to optimize flow. At first glance, most high-mix machine shops appear very complex. However, as the job shop owner quoted in this Modern Machine Shop article discovered, almost every operation can be broken down into a few standardized processes. With the help of a software tool called the Production Flow Analysis and Simplification Toolkit (PFAST), the shop owner was able to evaluate and simplify material flows in order to develop part families and machine grouping. As a result, the shop was able to organize parts into process families and implement hybrid cells to streamline routings, fundamentally transforming the shop’s business.
- Reduce work-in-process. As described in this white paper from the LENOX Institute of Technology, a common workflow pitfall of a high-mix operation is cumbersome production planning and variability, which can cause machine shops to scramble day-to-day, minute-to-minute and just barely meet order deadlines. An in-depth article from The Fabricator describes how two managers addressed this issue by adapting another improvement principle called the Theory of Constraints (TOC). Using the drum-buffer-rope concept and a tool called the Velocity Scheduling System, the companies featured in the article were able to reduce the amount of work in process (WIP) on the floor and, as a result, improved productivity, delivery time, and cash flow. You can read the entire article here.
While high-mix, low-volume operations certainly present a unique set of production challenges, these case studies reveal that there are several strategies managers can put in place to reduce waste, optimize flow, and improve productivity. It may take a little research and some creativity, but leading-edge machine shops are finding that in today’s competitive market, the benefits are well worth the investment.
March 15, 2014 / benchmarking, Cost Management, human capital, KPIs, lean manufacturing, overall equipment effectiveness, productivity
Most companies that have adopted lean manufacturing strategies know the importance of measurement. When a metal-cutting operation can quantitatively assess their performance, it can start to make significant improvements and set realistic goals to stay competitive. It also allows them to benchmark themselves against other industrial metal-cutting organizations. However, metrics are only meaningful if they are tied to strategy. That’s where key performance indicators (KPIs) come into play.
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, this isn’t as easy as it sounds and takes careful consideration.
Case in point: Over the last several years, it has been popular for manufacturers to us overall equipment effectiveness (OEE) as a KPI. However, this blog post argues that OEE is not a KPI that should be measured at a company or plant level. In the blog, the author states five reasons why OEE is not a good KPI, including the fact that it is not comparable between different pieces of equipment and/or different locations. Instead, he suggests OEE should be used as a way to help identify and eliminate waste in front of a process, line, or equipment.
Although the “right” KPI will vary by organization, there are a few simple guidelines managers should follow to determine the most effective performance measurements for their metal-cutting operation. Below are a few strategies to consider:
- Plant-level KPIs should align with business objectives. According to this article from Control magazine, managers should begin by making sure plant-level KPIs line up with corporate goals. Is your company focused on growth, or is the goal to maintain existing customers? How does your KPI tie into those goals? As the manager quoted in the Control article states, a good KPI should consider the manufacturing side and business side of an operation.
- Keep the list short. If every KPI should help drive strategic intent, the list should be intentional and concise. As stated in this column from IndustryWeek, managers that measure too many things aren’t really measuring anything. While it is okay to add to your list of KPIs, as the IW author states, be sure to go back and edit the list to make sure each KPI works toward the overall company strategy. This helps maintain focus.
- Make it a team effort. KPIs must mean something to everyone in order to be effective. This means communication is critical. Key personnel and supervisors should understand what the KPIs are, why they are important, and how they are measured. Without explanation, team members can get frustrated, especially if goals aren’t being met. Managers can also take it one step further by defining employee goals in terms of organizational KPIs. According to this article from Mind Tools, this is the critical link between employee performance and organizational success. For more information on how to link KPIs with employee goals, you can read the full Mind Tools article here.
March 10, 2014 / human capital, lean manufacturing, quality, Safety
Over the last ten years, the term “efficiency” has moved beyond an industry buzzword to an industry expectation. Most fabricators have incorporated some form of lean principle into their operation, and those that haven’t are starting to consider it. In today’s market, only the “leanest” survive.
What many managers may not realize, however, is that lean processes can make jobs highly repetitive. As pointed out in this article from Industrial Engineer, this often eliminates critical rest time for employees. “The repetitive jobs take their toll on employees as stressful postures and high forces are repeated over and over throughout the day,” the article says. “In the long run, the financial savings from the productivity gains and quality improvements are used to pay for the higher cost of workers’ compensation claims.”
This is why many leading fabricators and other industrial metal-cutting organizations are incorporating ergonomics into their lean processes. Strategic equipment placement and improved ergonomics not only keep employees safe and healthy, but they are key aspects of high productivity and optimized workflow. The fewer times an operator touches a material, the fewer chances for injury and human error, both of which contribute to productivity.
Here are just two examples of how ergonomic improvements can make a difference in an industrial metal-cutting operation:
- Earle M. Jorgensen Company (EMJ), a metal service center featured in this white paper from the LENOX Institute of Technology, recently performed an in-depth ergonomic study at one of its metalworking facilities. With the help of a third-party resource and input from its shop floor employees, the company made several changes to the shop floor to eliminate unnecessary handling and transportation of material. Ergonomic improvements ranged from repositioning band irons to adjusting the height of staging tables. By optimizing the workflow, the company has seen a reduction in employee injuries, improvements in operator efficiency, and increased output. EMJ has also seen an increase in shop floor morale, as operators feel they are playing a critical role in helping the facility succeed.
- SIGCO Inc., a glass and architectural metal fabricator featured in Assembly Magazine, made an investment to replace the traditional jib cranes and hoists workers were using to move 500-pound products. According to the article, the operations manager acknowledged that each piece of new equipment cost less than an average worker’s compensation back-injury claim—an indication that it was well worth the investment.
To read more about the impact lean manufacturing processes can have on employee health, check out this article from the Safety Daily Advisor. While being “lean” may be expected of today’s manufacturers, as the article warns, fabricators need to be sure they aren’t becoming anorexic.
February 10, 2014 / bottlenecks, lean manufacturing, productivity
When operations gear up for the day, most fabricators have one overarching goal—to move as much metal as possible. Huge volumes, continuous sawing, and quick turnaround are characteristic of most of today’s fabricating operations, and that means there is no time for bottlenecks, errors, or other unexpected events.
To keep saws running, studies suggest that getting ahead of production hiccups is key, either through continuous improvement initiatives or predictive operations management. However, when you are in the midst of the day-to-day grind—sometimes churning out thousands of parts per week—finding the time to identify bottlenecks and assess processes is a very real challenge.
But here’s the good news: Continuous improvement doesn’t have to be complex to have an impact. While you may not have the extra hours or resources to implement an aggressive lean program, there are some simple tactics fabricators can use to improve the efficiency of their metal-cutting operations.
One Day at a Time
According to Leanproduction.com, one of the most powerful ways to reduce down time is to identify and fix one problem each day. By making small, incremental improvements, the article says that companies have seen their overall equipment effectiveness (OEE) improve by 10% or more when managers consistently apply this strategy over a period of three months.
The key, the article points out, is to ask three simple questions that lead to one very specific action or change that can be made on the same day. The first question is based on information you gather from the plant floor that identifies a loss. The second question is designed to get the team to focus on pinpointing the biggest loss or easiest “win.” The final question should push the team to decide on a specific action that will reduce the loss. You can read more about this strategy and see some sample questions here.
Ask Operators for Input
A magical thing happens on the shop floor when an operator or process area becomes committed to their operation and, more importantly, takes pride in hitting productivity and quality goals. This type of employee “buy in” can have a substantial impact on efficiency. As any management expert will confirm, employees tend to support what they help build, which is why more and more manufacturers are actively including operators in improvement initiatives. No one knows your workflow better than your operators, so why not engage them?
What areas slow them down? What changes do they suggest to make processes safer and faster? Then, when appropriate, follow through on some of their suggestions. This tactic not only helps improve operational efficiency, it also shows operators that they are a critical aspect of the company’s success.
Learn from Mistakes
While no one likes to admit their mistakes, ignoring failures or pretending that they didn’t happen only increases the chances of recurrence. As one fabricator states in this white paper from LENOX Institute of Technology, managers need to document mistakes so they can learn from them. When bottlenecks or failures occur, it is worth the time and effort it takes to get to the root cause of the issue so that it never happens again.
In fact, an interesting editorial from Manufacturing.net goes one step further and says that companies may even want to consider trading failure stories with other manufacturers. “Oftentimes, manufacturing feels far too siloed, every company is struggling within its own four walls,” notes Joe Hans, managing editor of Manufacturing.net. “There’s a lot that could be learned if companies began to not only fix downtime, but take advantage of its instructional moments, and then share those with others.”
January 20, 2014 / lean manufacturing, planning, preventative maintenance, productivity
Recent data continues to confirm that business is on the upswing. In fact, according to latest Business Conditions Report from the Precision Metalforming Association (PMA), metalforming companies can expect a spike in incoming orders during the next three months. In a recent press release, PMA president William E. Gaskin said shipments could increase three to six percent thanks to strong auto production and the general sense that fundamentals are improving.
As the economy continues to recover and customer demand increases, industrial metal-cutting operations need to be sure they are ready. Productivity will be more critical than ever, leaving no time for unnecessary bottlenecks. The question is—what are you doing to prepare?
While the nature of a machine shop makes it difficult to adjust for a sudden in-rush of orders, there are some strategies managers can use to keep production moving and reduce the number of potential bottlenecks. Here are a few best practices to consider:
- Preventative Maintenance. Machine downtime is perhaps the greatest threat to any cutting operation, especially those with a limited maintenance staff. Machine shops like Fort Worth, TX-based D&J Technologies rely heavily on preventative maintenance (PM) to address this issue. The machine shop, featured in this white paper from LENOX Institute of Technology, says its PM program is “highly important in keeping the machines running” 10-14 hours a day, six days a week. This involves weekly checks of equipment fluid levels, as well as greasing and oiling all of its saws when necessary. To prevent premature belt and drive wheel wear, the shop also does a quick daily maintenance check by running each saw from low to high a few times (as opposed to starting them cold and running them all day at one speed fitting).
- Planning Ahead. Production planning and forecasting is critical to keeping operations running smoothly and on time. Many leading industrial metal-cutting companies are implementing aggressive planning schedules that are 4 to 6 weeks in advance and, as a result, are seeing benefits such as reduced scrap and fewer errors. However, many managers find this to be a challenge in a machine shop, where last minute and specialty orders are common. In these cases, an automated solution such as scheduling software can help. This Buyer’s Guide from www.softwareadvice.com provides a good reference of the different software options available for automating many of the tracking and scheduling duties within a shop.
- Get Lean. There is no question that lean initiatives take both time and commitment. However, even simple changes like the 5S tool can help reduce bottlenecks by eliminating hazards and creating a more organized work environment. More ambitious managers may want to consider additional lean methods such as value stream mapping and the Theory of Constraints. This web site explains these methods and other popular lean tools that are being used by today’s leading machine shops.
Of course, bottlenecks are an inevitable aspect of any metal-cutting operation. However, as demand increases, so does the negative impact of downtime. One misstep can lead to a domino effect that can throw off an entire production schedule. By taking proactive measures, managers can reduce the chances of unexpected events, eliminate potential bottlenecks and, at the same time, improve productivity and quality.