Walk beside them

Magazine Article, Source : The Manufacturer US Published : 12 Aug 2005 14:07

Leading by example is a powerful motivating force for lean, says Anand Sharma
By now, many companies have experienced numerous good business reasons to go lean. But lean doesn’t happen by magic or wishful thinking. Embracing lean means making a total commitment to the whole process and not just dabbling with the tools. Successful lean companies don’t just decide to “do lean,” they transform themselves—and it’s that transformation that ultimately brings success and sustainment. Successful transformation of an enterprise is brought about by leadership, not management. A commitment at the highest level in an organization is the most important ingredient in the adoption of a lean culture. That commitment and the change it brings with it will lead to a real competitive advantage.

Successful lean companies share some common traits. Their leaders develop a clear, concise, compelling, and shared vision. They have an unwavering commitment to achieving the corporate vision. They communicate openly and frequently with all employees. They have focus and provide resources to ensure success. They have a policy deployment process in place for successful execution. They have visible, proactive, and engaged leaders who lead by example.

A good lean leader will shift the company’s focus toward the future. No longer will the company look at what has happened; instead it will focus on what can be, anticipating and even shaping the future. This means truly, and regularly, interacting with customers and uncovering their unmet needs. It means teaching all the employees how to think outside the box and recognize and create opportunities that will benefit the customers and the company. Most of all, it means really putting your hearts and minds into lean, making it a way of life.

At Vermeer Manufacturing you are just as likely to see President and CEO Mary Andringa visiting a customer work site exploring the needs of that customer as you are to meet her in a board room. As a result of her leadership, between 1998 and 2005 Vermeer improved productivity by 26 percent without adding employees and decreased total inventory by 20 percent and WIP by 55 percent, while increasing cash generation by 133 percent.

Hubbell’s Tim Powers is another leader who walks the lean walk. His enthusiasm for lean spreads from the top down; he understands that what he does has a direct effect even on the actions of every shop floor employee. If he lives lean, then they will live it too. Like many successful lean leaders, Powers learns from the experiences of others and shares his own lean experiences, both hallmarks of a good lean leader.

Lean leadership can be summed up by a quote from Lao-Tzu, a sixth-century B.C. philosopher and the founder of Taoism: “To lead people, walk beside them.” When lean leaders walk beside their employees, they will transform the company, leading the employees to truly become agents of cultural change. When lean leaders walk beside their customers, they will find the solutions for creating and sustaining unique competitive advantages.

As a lean leader you must provide both the vision and the leadership for your company and your customers. The great leaders of history are remembered because of their ability to motivate—lead—people. Dictating how things should be done is never as effective as showing how things should be done. In lean manufacturing, as in history, success follows great leaders. To paraphrase Henry Kissinger, leaders must take their people to where they have not been—from business as usual to lean and, ultimately, to profitable growth.

Source: The Manufacturer

Streamlined

By DEREK R. SMITH
Tribune business writer
Saturday, August 20, 2005

Lean manufacturing: It's a term that has long generated a buzz in the automotive industry.

In the decades since it was pioneered by Toyota Motor Corp., lean manufacturing has become the model for industry success -- with manufacturers like General Motors Corp. and suppliers like Delphi Corp. incorporating it into their production processes.

William Guggina, managing director of the Kokomo operations of Delphi Electronics & Safety, spoke volumes on the subject while taking the Tribune on a two-hour tour of Delphi's local manufacturing operations. Transferring to Kokomo as a manufacturing engineer for Delphi-Delco in 1986, Guggina has since advanced through Delphi with positions in both the United States and Mexico.

Guggina said Delphi implemented lean manufacturing in the early 1990s. The company's standardized approach is now known as the Delphi Manufacturing System.

"It means build only what you need when you need it -- nothing more, nothing less," Guggina said. "We hold a very specific amount on the line. It's kind of like the supermarket mentality: We only use what we need."

He said one principle of lean manufacturing is building quality into each part of the process.

From the beginning to the end of Delphi's manufacturing process, the system ensures maximized efficiency, quality and performance, Guggina said.

"The auto industry is the most demanding industry in terms of quality," he said. "Failures are not acceptable to the customer. They're also expensive."

Integrated circuits

Based in Troy, Mich., Delphi has about 185,000 employees worldwide.

Kokomo is the world divisional headquarters of Delphi Electronic & Safety. About 5,500 of the division's 29,900 employees work in Kokomo -- with about 2,500 of these Kokomo employees involved in manufacturing.

Local Delphi operations include both the designing and manufacturing of customized integrated circuits.

Guggina said Delphi buys five- and eight-inch silicon wafers with which to begin its manufacturing process.

Wafers are taken into a 60,000-square-foot "clean room" designed to ensure the wafers are not contaminated by air particles.

"The environment requires extreme cleanliness to levels we aren't used to," Guggina said. "We circulate 5 million cubic feet of air per minute through this facility."

Guggina said the clean room is about 1,000 times as clean as a hospital operating room.

Temperature, humidity and lighting are closely controlled in the clean room. Employees wear Goretex suits that prevent their bodies from contaminating the wafers.

Each wafer has about 400 to 2,000 chips on it, Guggina said. Chips can have about 250,000 transistors.

Guggina said the Delphi facility makes integrated circuits for use worldwide, but mainly in North America, Europe and the Asia-Pacific region.

"It's a phenomenal facility. It was built in the mid-80s, but it's still thought of as state-of-the-art," he said. "It's a substantial part of our Kokomo operations."

After going through the clean room, a wafer is taken to another Delphi facility where it is cut with a diamond saw into small chips.

The chips are later put into containers and taken to the electronics assembly area.

Mechanical testing

Delphi subjects its products to both mechanical and magnetic testing.

"For automotive electronics, the environment is extremely harsh," Guggina said. "We've got to make products that are extremely robust in a number of ways, and these operations allow us to do that."

An engineering validation lab in Plant 8 is used to perform accelerated mechanical tests on Delphi's body and chassis, powertrain and radio products.

Testing allows Delphi to both measure the quality of current products and improve future designs, said lab manager Bill Brown.

Lab supervisor Rob Bugher said the 20,000-square-foot facility has 77 chambers of various types. He said workers document problems identified through the tests.

"You're always going to find something," he said. "We want to make the product better as it comes through."

About 20 of the chambers subject the products to temperatures ranging from about -40 to 85 degrees Celsius.

"Various products call for various types of chambers to get us the temperatures we need," Bugher said.

A dust chamber subjects the products to the effects of dust, while another tests a product's resistance to high-pressure doses of water.

Two cyclic corrosion chambers test a product's resistance to salt in a spray form and an atomized form.

Employees spill grease, gasoline and beverages on products in the fluid-testing room.

Nearby is the "squeak and rattle room," a microphone picks up any noises caused by vibrations to the product, which can be vibrated both vertically and horizontally.

Voltage tests, thermal shock tests and humidity tests are performed in other chambers.

Employees wear ear plugs inside the vibration lab, where a product's resistance to vibration, temperature and humidity are tested. Other equipment is used to drop and shake products.

Magnetic testing

In Plant 10, Delphi employees perform a total of about six weeks of electromagnetic testing in several labs.

Testing charges range from about 8,000 to 25,000 volts.

"We've got to test both polarities -- positive and negative," said Delphi employee Paul Zimmerman.

In one lab, two robots perform repetitive precision testing. A robot zaps each pin on the product three to 10 times with a controlled charge of electricity, grounding the charge after each zap.

Electronics assembly

A variety of Delphi electronics components are assembled in Kokomo, including transmission controls, engine controls, powertrain controls, climate controls, radio controls and safety electronics.

Julie Oberlin, operations manager for powertrain products, said Delphi's Kokomo operations make about 1.5 million powertrain control modules a year.

She said about 97 percent to 98 percent of the facility's products are without defect, adding "if there is a failure, we don't send it down the line."

The powertrain assembly process begins with a circuit board known as a "bare board" or "green board." Each of the boards receives a unique bar code as it moves down the production line. This allows employees to locate any board at any part of the production process.

A stainless steel stencil puts a paste onto the board that is about the consistency of peanut butter.

Automated component assembly equipment then takes integrated circuits made in Kokomo and puts them on the circuit board.

The boards then go through ovens with computer-controlled temperatures that turn the paste and circuits into a solid solder joint. Fourteen alarms indicate any problems.

Then the circuit board is flipped over as it proceeds down the automated line and circuit units are put on the board.

Employees manually perform "sticklead assembly," and any boards with problems are separated from the assembly line.

"You can see the product flow like water through the whole area here," Oberlin said.

The boards then go into their cases and undergo additional testing before reaching the end of the line. Bar codes and computer sensors ensure that the finished product is put into the correct box.

"We've got strict procedures around every part of the process -- even packaging," Guggina said.

Each morning for local manufacturing workers begins with a "huddle meeting" in which groups discuss a variety of operations issues.

Guggina said Delphi has been recognized as an industry leader in its application of lean manufacturing.

"Our people go through all kinds of training and experiences," he said. "Here in Kokomo we've got a thorough understanding. It shows in our system and our results."

In 2004, Plants 7 and 9 of Delphi's Kokomo operations earned the coveted Shingo Prize for Excellence in Manufacturing.

Derek Smith may be reached at (765) 454-8580 or via e-mail at derek.smith@kokomotribune.com.

Source: The Kokomo Tribune

Even small companies can trim the fat with 'Lean' initiatives

Scott Clark

It is difficult to read business success stories today and not see the terms "Lean manufacturing," "Lean re-engineering," or "Lean thinking." These Lean initiatives had their start in large manufacturing corporations and were focused on assembly lines.

Subsequently, other corporations adopted these principles for non-manufacturing environments because their processes and policies had caused them to become mired in inefficiencies that significantly increased their overhead costs. These corporations used Lean thinking to wring out unnecessary costs and transform themselves into fast, efficient and customer-focused businesses.

In today's highly competitive environment, even smaller companies can use Lean thinking principles to become more agile and productive. Here are three fundamental Lean concepts you can apply in your business to get you started.

Work

In the world of Lean, when you move paperwork or products in your business and in the
process add value to it, this is defined as work. When you move these items and do not add value, this is called waste. Both work and waste add cost, but the cost added by waste is usually unnecessary.

Based on a limited study of 120 businesses, when the average employee puts in 100 hours on the job, only 5 percent is work; the other 95 percent is spent on moving, waiting, searching or redundant actions, all activities that fall under the broad category of waste.

Customers are willing to pay for work but not for waste; therefore, to remain competitive, businesses should maximize work and minimize waste. You can start your own analysis by evaluating your basic office processes step by step. Involve some of your employees in the process.

Analyze each step of each process to determine where waste occurs and how it can be eliminated. Can steps involving waste be combined, performed in a different order, or eliminated?

Hard decisions need to be made, and some employees may consider certain wasteful steps to be essential, which is why you need a cross-functional team to review the steps and then develop a team consensus regarding how to best eliminate waste in your processes.

Once your team has completed its analysis, implement the recommendations immediately. When you do this there will initially be a short period of regression, because you are changing from a wasteful, but familiar flow, to a streamlined, more efficient flow, and changes always require time to adapt.

Within Lean, the analysis process is never complete. Within a year, have another team analyze this new flow. Chances are that after the initial waste has been eliminated, this team will come up with additional ways to lean-down the process.

Visual control

When just one or two people know where things such as tools, manuals, job orders and purchase orders belong, this can be a recipe for disaster. Companies committed to Lean have a place for everything so that every worker in the area knows when something is out of place.
By keeping all material in its proper place, waste is minimized because employees need not spend valuable time looking for a needed item; they know where it is and they can secure it rapidly. Visual control also uses color codes or placement to allow employees through these visual cues to assess the current status of an item.

For example, if a special order is in-process, visual cues allow employees to see its current status.

Flow
To understand the concept on flow in the Lean environment, envision a mountain stream meandering down the mountain from top to bottom in a straight line. The water delivered at the bottom of the mountain is maximized in terms of the volume of water delivered and the time it took to get there. Thus the flow is predictable and maximized.

Now envision a typical mountain stream with many sharp curves, boulders, tree roots, beaver dams and sandbars, periodically slowing the current and creating many stagnant pools and eddies. Now the flow rate at the bottom is constantly changing, unpredictable and considerably diminished.

If we envision the flow in your business (for example the process of a customer making a purchase, or an employee placing an inventory order, or a product being fabricated), there are probably a number of stagnant pools and eddies. These equate to waste, increased cost and decreased customer satisfaction.

Some of the ways Lean thinking can resolve these issues include:

Co-locating employees who have functional responsibility for sequential steps in a process
Decreasing inventory and batch sizes so flow is continuous rather than sporadic
Focusing on higher quality at the source rather than quick problem identification or quality issue detection later in the process
Using multi-skilled work teams rather than a series of employees each with a single skill
You should focus on these three inter-related concepts to launch your company's Lean journey.

Scott Clark is a Cedar Rapids, Iowa-based columnist. He can be reached by e-mail at mail@saclark.com.© 2005 American City Business Journals Inc.

© 2005 American City Business Journals Inc.

Laboring Lean

by Yolanda Simonsis Associate Publisher/EditorPaper, Film & Foil Converter, Aug 1, 2005

Lean Manufacturing and Six Sigma…they aren't just buzzword phrases. Many converters take them very seriously — unlike other here-today-gone-tomorrow buzzwords — saying they are a way of life with staying power. Among those believers is Dura-Fibre LLC, Menasha, WI, a laminator, die-cutter, and printer of paperboard and other substrates. The company's new Operon Systems' RedHawk turnkey data gathering and analyzing tool is providing newfound manufacturing efficiencies of up to 25% over previous production standards — realized after only 11 weeks of operation. The tool is expected to help keep the company competitive both offshore and at home.

More and more, Lean Manufacturing and Six Sigma methods are the guiding principals by which both heavy and ancillary equipment vendors approach the research and development of new products. Every action and every process must contribute to the end product, and if it doesn't, it's history. There's no room for waste or anything remotely superfluous in a lean manufacturing operation. More than ever, converters are challenging vendors in the manufacture of equipment to meet the needs of a lean facility, starting at the office front door where orders are placed, through the manufacturing process, and out the shipping dock.

But how does a converter establish what is or isn't a necessary action or process, particularly when legacy equipment is in use? Assuming the action or process is necessary, then how does one use it most efficiently? For Dura-Fibre, the answer didn't come by traditional means. In fact, the history of how it managed to come to its present success is quite unconventional and worth a short detour before moving on with the answers to these questions.Historical Detour
Dura-Fibre was formerly the laminating division of Menasha Corp., having been acquired by Dunsirn Partners in 2004. The name Dunsirn has been seen within the pages of several trade magazines in the past, including PFFC. Presently, the “Partners” segment of the name includes Brian Dunsirn, who was formerly president and CEO of Dunsirn Industries before it was sold to Avery Dennison in 2001; Duane Dunsirn, former chairman of Dunsirn Industries; and Jay Jensen, who has had previous corporate acquisition and management experience. Even before the beginnings of the 14-year-old Dunsirn Industries (upon its sale to Avery), the Dunsirn brothers had family roots in the printing industry where their father, the recently deceased Bob Dunsirn, acted as cofounder of Mid-America Tag and Label, growing it to a $25 million company. It was ultimately sold to Menasha Corp. (which was recently sold to WS Packaging), bringing them full circle to the Dura-Fibre of today.

Dunsirn Partners claims not to be brokers or merger and acquisition agents but is a group of entrepreneurial professionals that buys businesses directly. Dura-Fibre was one of these purchases, being among three acquisitions that represent half the partners' goal to own and operate a network of six companies. The most recent acquisition this past June includes the sale of the Specialty Papers business to Nekoosa Coated Products, also a Dunsirn Partners' property.
Further complicating this detour is Operon Systems LLC, a start-up solutions and software supplier also owned by Dunsirn Partners but started by Troy Dunsirn (Duane Dunsirn's son) and Mark Nickel. The RedHawk technology concept owes its existence as well to Dunsirn Industries, where its basic mode of development was first inspired. Today it is a fully operational performance-to-plan software productivity tool, providing real-time Manufacturing Productivity Solutions (MPS). It reportedly can be applied to most manufacturing process environments wherever machine downtime exists or there is variability in processes between operators.

RedHawk is a key element to strategizing the acquisition(s) of prospective companies for Dunsirn Partners in that the tool is implemented at a newly acquired facility, such as Dura-Fibre, to increase productivity and provide data for continuous improvement using Lean, Six Sigma, and other methods. The focus of a prospective acquisition is on increasing the new business's EBITDA (earnings before interest, taxes, depreciation, and amortization) by leveraging the improved productivity, available capacity, improved funding, and management expertise — all via RedHawk.

So, while Dunsirn Partners utilizes RedHawk to bring its acquisitions into profitability — and here's the kicker — it also is offering RedHawk to the industry-at-large for competitive converters to purchase. It presently has a total of 62 installations, and Brian Dunsirn believes Operon has only “cracked the surface.”Road Map to Success

Now back to the questions left unanswered before our detour. Once Dunsirn Partners completed the purchase of Menasha's Dura-Fibre laminating division, the task was to make it more profitable. With the Dunsirn brothers' and partners' prior business history, they found themselves back on the road map in familiar territory. While Dura-Fibre may have been deemed a non-strategic division for Menasha, it became the task for Dunsirn Partners to make the newly stand-alone operation a thriving business. Previous experience at Dunsirn Industries proved invaluable in identifying, with the aid of Lean Manufacturing principles, what were considered necessary actions and processes. Pursuant to this, they set about determining how to perform the actions and processes most efficiently.

The key to making any converting machinery more efficient and more productive, explains Brian Dunsirn, is to make the machine more intelligent. This can't “be complicated with keyboards and mice. It must be really simple, easy to use, and a tool to empower the operator of the machine rather than a tool for the manager or the supervisor to come out and hit the operator with a stick.” Interestingly enough, with the implementation of the RedHawk tool at union-employed Dura-Fibre, Dunsirn Partners has been pleasantly surprised. Brian explains, “They've taken to it. The whole argument or point I've been making all along is that it's really the US against the Chinese. It's not you against me. We have to work together. And this is a tool that can help us.” Dura-Fibre has experienced total “buy-in” from union members without any threatening feelings. In fact, RedHawk has done much to promote a feeling of parity, fostering a sense of pride and achievement among operators.Sparking Pit-Crew Mentality
The real-time data provided by RedHawk helped Dura-Fibre employees understand that when the machinery wasn't running, “then we're not making money,” recalls Brian Dunsirn. With the aid of RedHawk, both operators and management can differentiate when there is a process problem, a materials inconsistency, or a skill-based operator issue.

“People in general are interested in doing a good job and in improving their skills,” says Dunsirn. The tool has helped establish equity in a union environment in terms of performance from operator to operator, providing a fair method for performance appraisal. “It's not fair for operators to be booted out of their jobs without having the real opportunity to improve,” he continues. Now Dura-Fibre has real-time, unmanipulated data with which operators are able to compare themselves quickly and easily to performance standards as well as against other operators. “We have big displays with all the real-time machine consoles, so the team leader in his office can determine if a process step is taking too long, such as when a display function starts flashing. He'll say, ‘I have to go help these guys!’ Like a pit-crew mentality.”Delivering the Data

Redhawk can be installed as a turnkey, standalone solution. The machine/operator interface is a freestanding enclosure, housing the necessary components to deliver data. Most important is the data being shown to the operator in real time: performance to plans of their shift, order, and current process.

Bundled web reporting tools allow use anywhere on Dura-Fibre's local intranet. Productivity data can be viewed by site, shift, or individual machine operators. For example, a shift summary report tool displays a list of shifts that were completed. A tactical screen lists the completed jobs for a selected shift. An order detail screen allows any completed job selected from the tactical screen to be viewed in detail. All steps performed on the laminator to complete the job are displayed here.

Installing RedHawk at Dura-Fibre took one week. A four-step process involved the following and is described as standard procedure for most other installations, regardless of type:
Creating a process map that defines the linear coating processes required to complete an order;
Installing and configuring the RedHawk interface and web reporting tools to provide productivity data on the laminating process;

Training operators and management to use the machine interface and reporting tools along with understanding how and where the data is generated during each process step;

Providing a follow-up analysis one month after installation to obtain a productivity solution that determines how the system is functioning and whether adjustments or improvements are necessary.

More satisfying for Dura-Fibre president Jack Griffith and production manager Todd Price, they've been able to take on new business with 25% of machine time having been freed up for new jobs. And with the implementation of RedHawk as opposed to some Six Sigma projects, they're not only getting a constant score card, but they have been able to maintain the 25% gain in productivity without drifting back to pre-RedHawk rates. “Once you build the gain, you keep the gain,” explains Griffith. And even in Six Sigma black belt projects, the difficulty has always been in getting accurate data to even start the projects, Dunsirn adds.

As well, Dura-Fibre has been able to avoid the expensive capital costs of adding new machinery and the additional costs of hiring extra operators, supervision, scheduling, training, benefits, and healthcare that a major piece of new machinery requires.

The number one concern among employees, says Dunsirn, is job security. “The only way to have this in today's global environment is to be efficient and to give your customers value. If you have too many people and machines that are inefficient, then you're not going to be able to do that for very long.”

Source: Industry Click

Eliminating Waste with Business Process Management Tools

By Thomas R. Cutler and Mike Ligudzinski

Lean is all about doing things with less waste – that means both in time and resources. By adopting a Lean philosophy manufacturers review all business practices in an effort to reduce waste. This continuous review process must never stop; no matter how good the processes and practices, they can always be improved. These improvements may be due to new experiences, competition, technology, or simply that some one in the manufacturing organization has witnessed a better way.

Whether through an ISO certification process, Six Sigma quantifiable measurement, or a kaizen event, the design and documentation of practices and processes is often very tedious, time consuming and costly. The documentation is usually done using products such as Visio and Word. These documentation exercises are usually focused on recording how every manufacturing and business process should be executed.

BPM: managing the execution of documented processes
A true Business Process Management (BPM) tool must allow the design and publishing of the process; it must also provide the capacity for managing the execution of the processes.

One of the most challenging aspects of manufacturing management is the enforcement and adherence to defined processes. A Lean corporate initiative, characterized by significant process changes both in tasks and timing, mandates a strict conformance to the newly defined processes. It is absolutely paramount that a BPM system allows for complete control and monitoring of process execution and conformance.

Expanding beyond the plant floor: Lean manufacturing operations
The evolution of Lean initiatives was initially focused on the planning and control of the factory floor. ERP (Enterprise Resource Planning) systems have an accounting and warehousing component, however the main aim was to ensure that the machines and people on the shop floor were always manufacturing products.

Shop floor activity regarding actual production has been very well defined including materials, labor and machines. Specificity of manufacturing functionality even includes machine setup, cLeaning and pull-down. Defined are the operators, skill levels, supervisor span and time, shifts, and detailed maintenance times. Product work paths through the plant – the routings, have been detailed.

Since the 1980s and early 1990s, all of these ERP factors have enabled manufacturers to manage the resources required. The next step was to look and design ways of better manufacturing – first JIT (Just-in-time) then Lean manufacturing.

BPM tools allow the same definition of resources (along with the ability to plan those resources) for the non-shop-floor aspects of the organization. Business activities can now be defined and handled, by real time monitoring; processes are being carried out as designed. With quality BPM tools, built on Model Driven Architecture (MDA), we can make changes easily, quickly and without programming. BPM is the key catalyst for the delivery of JIT to the rest of the organization.

The role of ERP and BPM
Most ERP vendors have realized that the cost of creating, maintaining and implementing a manufacturing monolithic system is far too high – clients are also questioning the cost; it is time for a change.

Forward thinking ERP vendors have all announced plans to re-architect their ERP systems into smaller Object Oriented components within a Service Oriented Architecture (SOA). This new orientation should reduce the maintenance costs for the vendors and the implementation cost for the manufacturers. This redevelopment transition will take years and many ERP vendors will not survive the transition. Since the traditional ERP vendors will not survive, the transition to a long-term enterprise wide BPM integration philosophy is Darwinian.

Many ERP vendors are looking for ways to bring faster and greater return-on-investment (ROI) to manufacturing clients. ERP with implementations that are 1:1 against the license fee costs are rare; ERP products such as SAP are often four or more times the license fee.

Regardless of the ratio of implementation to license fees, most ERP vendors have found it difficult to design the new process, train the staff and ensure compliance to the new processes. This is where the BPM product can provide significant and immediate benefits.

Despite the vast functionality of ERP systems most vendors still have workarounds and customizations. With a BPM product sitting as the interface, implementations can be greatly simplified and customizations reduced.

Driving manufacturers to BPM
There are several reasons why manufacturers are turning to BPM tools.

Here are a few examples.

Poor ERP results:Manufacturers who have effectively implemented a highly capable ERP system and do not seem to be getting the returns they had expected are prime candidates for BPM.

Inconsistent ERP results:Perhaps there are some returns but they do not seem to be moving down the Lean path consistently or quickly enough. In this case the actual ERP system is usually working correctly, however the execution of daily transactions is not effective. This condition is usually due to process procedures that are not being followed accurately or in a timely manner.

Task and timing accountability:Senior manufacturing executives frequently ask how they can make sure that the staff performs tasks as defined in a timely manner. The hope is that technology will ensure that happens. Short of providing supervisors with baseball bats, enforcing conformance to process standards has been impossible. With BPM on top of the ERP system manufacturers can enforce conformance to the process step procedures – guaranteeing that they are executed in a timely manner.

Extending the Lean process to the entire manufacturing operation:Manufacturers may consider a BPM implementation when their ERP implementation is highly successful. ERP has reduced waste and the organization is becoming a real Lean manufacturing company. These progressive manufacturers often look at the other parts of the business and realize that the ERP system is really only providing them control and monitoring of less than 30% of the total business activity processes.

These committed Lean manufacturers search how to drive the same level of Lean into other activities and business operations. The implementation of BPM provides an initial ability to ‘Lean-up’ processes (kaizen immediate results) but to continue the ‘Leaning’ processes (continued process improvement.)

The prognosis for Lean BPM
Unfortunately the common business process still encourages company departments to act autonomously; as company-wide process teams are built there will be a Lean, cohesive and consistent operation. BPM will enable that transformation; it will allow for the selection and orchestration of process-enabling tools to manage and process data for each process step. The large monolithic ERP, will in fact, become a hindrance to that process, however, that is the longer term prognoses.

To get rid of the waste, to become truly Lean, manufacturers need to use an existing high quality ERP system that is married to a very well featured BPM engine.

Thomas R. Cutler, President & CEO, TR Cutler, Inc., (www.trcutlerinc.com) Ft. Lauderdale, FL, is the founder of the Manufacturing Media Consortium, a group of seventeen hundred journalists writing about trends in manufacturing. He is the lead spokesperson for the ETO Institute and is the author of the Manufacturer’s Public Relations and Media Guide. He can be contacted at trcutler@trcutlerinc.com or 954-486-7562.

Mike Ligudzinski is the CEO of PRONTO North America (www.prontoerp.com), Eden Prairie, MN, one of the leading manufacturing ERP vendors. PRONTO North America has just introduced their BPM system that integrates with PRONTO’s ERP system. Ligudzinski can be reached at mligudzinski@prontoerp.com or 952-942-5858.

In MFG100 Enterprise Dr.Suite 600, Box 912Rockaway, NJ 07866-0912

Source: Reedlink

Hearth & Home Technologies wins prize for manufacturing excellence

-- Casual Living, 8/8/2005 7:31:00 AM

Names 15 Winners

Hearth & Home Technologies Inc., a leading fireplace manufacturer, was recently recognized as one of 15 winners of the 2005 Shingo Prize for Excellence in Manufacturing. Dubbed the "Nobel prize of Manufacturing" by Business Week, the Shingo Prize is recognized as the premier manufacturing award and recognition program in North America.

Hearth & Home Technologies' Lake City, Minn. manufacturing facility earned the award by creating a rapid continuous improvement environment that effectively implements lean and world-class manufacturing practices to improve business performance. In 2004, the Lake City facility accomplished an average of 17 member-led process improvements per member — providing a total cost savings of more than $5 million.

"The recipients of the Shingo Prize demonstrate that lean enterprise leadership will truly weather economic uncertainty by not wasting precious manufacturing and business resources," said Ross Robson, Shingo Prize Executive Director.

"Each day our members commit to lean manufacturing processes and creating a continuous improvement culture," said Rich Bodensteiner, vice president and general manager, Hearth & Home Technologies. "The Shingo Prize for Excellence in Manufacturing is a direct result of their hard work."

For 16 years, the Shingo Prize for Excellence in Manufacturing has honored businesses and researchers in the United States, Canada and Mexico. The prize criteria focus on customer satisfaction, profitability, quality, cost, delivery, lean core operations, leadership and empowerment enablers. A board of examiners, consisting of more than 175 lean leaders throughout North America, conducts the rigorous process of evaluating manufacturers.

The Shingo Prize for Excellence in Manufacturing is named for Japanese industrial engineer Shigeo Shingo who distinguished himself as one of the world's leading experts in improving manufacturing processes.

Source: Casual Living

Taking A Page From Toyota's Playbook

Wipro and other Indian info-tech companies are boosting efficiency by emulating the Japanese carmaker

A year ago, executives of Wipro Ltd. (WIT ) got a glimpse inside a Toyota (TM ) assembly plant. During a guided tour of the factory that produces Corollas near their headquarters in Bangalore, India, Wipro execs hoped to pick up fresh ideas for their businesses of developing software and handling clients' back-office operations.

There were plenty of lessons to learn, but for Sambuddha Deb, Wipro's chief quality officer, one stands out. Deb began to take a shortcut when the safety path painted on the factory floor made a sharp turn. The Japanese manager walking behind him reached out, took his shoulders, and gently guided him back onto the path. The message -- all the little rules count. "They had that sort of discipline. It's second nature to them," marvels Deb.

Before the Toyota tour, Wipro had been struggling to get on track in back-office services. That might sound odd: With $1.7 billion in revenues, 42,000 employees, and a U.S.-traded stock that has advanced 230% in two years, Wipro is the embodiment of India's info-tech revolution. It's not only a leader in software development but also a pioneer in business-process outsourcing, where it does everything for clients from running accounting operations to processing mortgage applications. In that business, the company was respected for its low prices and dependability, but the work was too labor-intensive. Wipro wasn't doing enough to improve the way it did its clients' business.

That's one reason Wipro decided to use Toyota as a model for overhauling operations. Its aim is to make business processes as simple, smooth, and replicable as the way Corollas slip off that Bangalore assembly line every 5.3 minutes. In an unprecedented move, Wipro took on the tricky task of translating Toyota's vaunted principles for manufacturing into the realm of services. "What we do is apply people, technology, and processes to solve a business problem," says T.K. Kurien, the head of Wipro's 13,600-person business-process outsourcing unit.

Today, Wipro's paperwork processing operations in Bangalore, Pune, and Chennai bear an uncanny resemblance to a Toyota plant. Day and night, thousands of eager young men and women line up at long rows of tables modeled on an assembly line. Signs hanging over each aisle describe what process is being handled there -- accounts receivable, travel and entertainment, and so on. Team leaders such as P.V. Priya, who oversees medical claims in Bangalore, set goals with their colleagues at the beginning of each shift. Just like in a Toyota factory, electronic displays mounted on the walls will shift from green to red if things bog down.


RUNNING A 21ST CENTURY COMPANY

This infatuation with Toyota-like efficiency now permeates India's tech-services industry. The Indian companies see a kindred spirit in the Japanese auto maker. Like them, Toyota was forced to claw its way into a global business with low prices and a passion for quality. Such commitment is the key to becoming the back office for hundreds of Western companies, hastening the transfer of many thousands of jobs offshore. "If the Indians get this right, in addition to their low labor rates, they can become deadly competition," says Jeffrey K. Liker, a business professor at the University of Michigan and author of The Toyota Way, about Toyota's lean manufacturing techniques.

Think of any job that can be done remotely, by computer or telephone, and you're looking at a job that can be done by an Indian. Business-process outsourcing, or BPO, includes handling clients' call centers, accounting, human resources, and the like. Top Indian services companies don't just perform these jobs well. They demonstrate how a 21st century company ought to run. They have globalized workforces, super-efficient operations, and slavish devotion to customer service.

This emerging industry is helping India along the path to building a world-class economy. Already it supplies relatively well-paying jobs for upwards of 300,000. A 23-year-old can make $7,000 -- enough to afford a motorbike, or even a Corolla, to commute in style on Bangalore's jam-packed streets. The Indian BPO industry grew 40%, to $5.8 billion, last year and is expected to hit $64 billion and employ 3 million people in 2012, according to a Nasscom/KPMG study.

CONTINUOUS IMPROVEMENT
India will only get there if it has more to offer than cheap labor. Any developing nation has that. So Wipro and other Indian tech leaders, including Tata Consultancy Services Ltd. and Infosys Technologies (INFY ), are upgrading their services. They're automating processes to skip manual steps and using analytical software to mine data about their clients' customers.

The goal for Wipro is to become the Toyota of business services. Toyota preaches continuous improvement, respect for employees, learning, and embracing change. "It's the soft stuff that makes a big impact on the hard numbers," says Kurien, a cheerful 45-year-old. There is plenty of hard-edged analysis, as well. To embrace Toyota's methods, Kurien last year assigned teams to examine business processes, break them into discrete components, and come up with streamlined services to sell to clients.

Almost immediately, Kurien spotted a surprising problem -- cubicles. They're normal for programmers but interrupted the flow for business-process employees. So he came up with the idea of positioning people side by side at long tables and running processes up the line step by step. Wipro also adopted Toyota's kaizen system of soliciting employee suggestions for incremental improvements, and made The Toyota Way required reading. The company even did time-and-motion studies. One discovery: It took an average of nine minutes for employees to regain optimal performance after water and bathroom breaks. The water coolers were quickly moved closer to people's desks.

The initial response to all this "was a roaring disaster," admits Kurien. Some staffers felt like cogs in a machine, and they dragged their heels. Nandini Swamynathan, 34, who runs an employee-benefits help desk, was O.K. with Kurien's plans. Her staff felt differently. "The factory idea concerned people," she says. After hearing from his middle managers, Kurien did a reboot. He set up classes to explain the concepts and show how the methods would make their lives easier.The results are coming in. Since the program started, the group has improved productivity by 43% and reduced the percentage of transactions that had to be redone from 18% to 2%. Customers are reaping rewards, too. Look at E-OPS, a Miami startup. On June 14 it announced the country's first round-the-clock paperless mortgage-processing service. E-OPS had just six employees on Day One, and they focused solely on marketing. "It's amazing that you can run a national company with just a handful of employees, and Wipro does the rest," says E-OPS Chief Executive Joseph Machado.

Indeed, Wipro's paperwork-handling operations run with factorylike efficiency. There are two shifts -- 8:30 a.m. to 6 p.m. and 6 p.m to 3 a.m. When each shift starts, the teams, which are organized by process categories, gather with their team leaders for 10 minutes to discuss the day's goals and divide up tasks accordingly. Then they scatter to their desks.

During a recent visit by BusinessWeek to an office in Bangalore, we followed the journey of a single invoice through accounts payable. The first stop was the "imaging" room, where C. Venkatesh fed documents into scanners and attached electronic copies to work-flow software, which manages each step of the process. Then H.V. Shivaram typed data from the invoice into the accounting software program, M. Rassal checked the math, Srikanth Vittal Murthy posted the charges in the general ledger, D. S. Varadharajan authorized payment, and B. Ravi Sekhar arranged for a check to be cut. Finally, V. Karunakaran printed and mailed it. If the process had hit a bottleneck, a digital display on the wall would have turned red. That would have prompted managers to swarm the center of the room, confer, and fix the problem on the spot.

Wipro's employees seem sincerely excited about their jobs -- work that would likely be considered sheer drudgery by U.S. college grads. Take 28-year-old Priya, who has worked for Wipro for nearly seven years. She has already submitted a handful of kaizen, and is thrilled at how quickly her bosses respond. "Even though it's something small, it feels good. You're being considered," she says. Empowerment on the job is spilling over into her private life. She's the first woman in her family to go to college, and recently told her parents that while they are free to arrange her marriage, they must pick a man who will not interfere with her career.

Kurien and his lieutenants do plenty to boost morale. It's stuff that would seem corny in the U.S. Employees who submit suggestions to kaizen boxes near their desks get little rewards -- pens, caps, or shirts. Every week, the bosses wheel out a cake for a top performer. Murthy, a 25-year-old accountant on the accounts payable team who aims to be Wipro's chief financial officer some day, was surprised with one in late April. He had led an effort to improve the handling of Indian government import approvals, cutting the time it took to process them from nearly 30 days to a maximum of 15 days. He got a cake with his name written on it in honey. "I was surprised management knew what I was doing," he says. Now, he says, "I want to do more projects."

Kurien feels he has a long way to go. "On a scale of 1 to 10, we're still at 4," he says. He recently started work in procurement and logistics. The next likely targets are engineering services and health-care claims processing, which are two of the industries that Wipro focused on for software services. His idea is to weave business-process services into the company's tech offerings to give clients an ever-widening menu to pick from. A customer who hires Wipro to write new features into its accounting software program may also hire Kurien's crew to run the new process itself.

With every new initiative, he has to hire and train a fresh team and come up with novel techniques for turning messy, manual processes into highly automated and efficient ones. Think of it this way. He's creating a mirror world to the way business is done today in the West -- but the reflection has to be sharper than the original image. If Kurien succeeds, a few years from now management gurus may be trumpeting the Wipro Way.

By Steve Hamm

Source:Business Week

Learning Lean

By MIKE SATREN
Staff writer


MIKE SATREN/PressTwo Buck Knives employees assemble components as a part of the lean manufacturing process that they helped to define.

New business model cuts waste from production
POST FALLS -- North Idaho has a promising new business model to consider that may help to invigorate manufacturing and give vocational hope to many in the area's work force.
Lean manufacturing was brought to Post Falls by Buck Knives Inc. when they began production in their new facility this year.

"Lean manufacturing is a philosophy with a series of tools to get there," said C.J. Buck, president and CEO of Buck Knives Inc.

Three years ago, Buck Knives was manufacturing the old way using long, specialized assembly lines that resulted in the need to warehouse large amounts of partially completed knives that were not yet ready to be shipped or sold. This unusable inventory -- work in progress -- had a considerable amount of labor invested, took up floor space and needed to be tracked.
Buck Knives was introduced to lean manufacturing by their executive vice president of operations, Phil Duckett, and began to transform their lumbering, inventory-laden, inefficient assembly lines into the fast-response work cells of today.

Lean manufacturing is a new way of looking at production that starts from the premise that adding value for the customer is the primary goal.

"It's the elimination of waste, and you define waste as anything that doesn't bring value to the customer," Buck said.

This premise uses several tools to accomplish that goal.

One tool, value stream analysis, attempts to identify actions that create value for the customer and those that do not. It is a mapping exercise that contrasts current methods with a variety of alternate actions. Kaizen Events are then used to problem-solve these value streams. Kaizen is a Japanese word meaning gradual and orderly continuous improvement.

Buck said that in a Kaizen Event they might assign six to eight people -- a cross-functional team which may include vendors and customers -- to immerse in a brain-storming session of 48 to 72 hours. This is in contrast to the one-hour weekly sessions spread out over months that characterized how problem-solving was tackled before often with meager results.

"The Kaizen Event won't be effective if it is not facilitated and the people involved don't have some team skills," Buck said.

Ray Ramos, production control/lean enterprise manager at Buck, said that during the Kaizen Event all you do is work on the project. "You leave your phone, pagers, whatever, out on the floor. You all work together. We provide lunch, breakfast whatever it is, that's all you need to work on the project.

"At the end of the beat, that project is done, implemented, changes are made and presented to top management."

Many of these solutions are about enabling those who do the work.

"One of the goals of a lean organization is to push down the ability to say, 'Yes'," Buck said. "The closer the decision can come to the person doing the work, the more efficient the process."
Lean organizations are constantly trying to reduce waste. This means using the concept of work cells -- 12 or 13 people at Buck Knives -- to assemble a completed product from beginning to end.

"These cells are self-defined," Buck said. "We use our own people to define what each station does and that gives the cell a vested interest to make it work."
Work cells at Buck Knives have several advantages, among them the ability to quickly change knife models.

"To change the model a cell is working on just what takes the first person to get a new box of materials and start the new model," said Chuck Buck, chairman of the board.

Another obvious benefit is that there is no work in progress. There are either just knife parts or there are completed knives, nothing in between.

Finally, the work cell participants are cross-trained and have added value in that capacity. It
enables the cell and the company to continue in spite of absences caused by illness or vacation.
The better that lean principles are implemented in a company, the closer that production can approach Just In Time operations. JIT is a concept that uses physical inventory control cues -- called Kanban -- to visually signal a need to move parts or order more parts. Kanban uses clearly labeled control cards in each work cell location to signal low inventories of a certain part. To back this up, Kanban inventory flow control also moves the parts physically to the cell's location in clearly-labeled portable bins on shelves. This is the visual component that keeps the process simple and apparent.

Kanban is a tool that helps to eliminate overproduction through a "pull" system, which triggers the flow of parts from customer orders. This results in an organization producing only what is ordered.

The JIT principle keeps raw component parts and final product inventories low. It is about knowing the time needed to produce customer orders and time estimated to receive incoming stock from various vendors. The end result is a more efficient parts flow, money saved that is not invested in parts or unsold product and a dramatically improved cash flow.
At the Coeur d'Alene Chamber Upbeat Breakfast on Tuesday, C.J. Buck outlined some of the principles of lean manufacturing and announced that they were going to incorporate lean principles in every aspect of their organization.

At a special presentation by North Idaho College at Buck Knives, on Wednesday, Dr. Robert Ketchum, executive director at NIC's Workforce Training Center, outlined the effort to start a Lean Enterprise Center to train industry and its work force in lean enterprise principles and techniques.

"This area of lean is something that we're picking up as increasingly critical across all industry sectors," Ketchum said.

Dr. Janet Bourque, who is helping NIC write a grant proposal to help fund it, stresses that it is important for a broad spectrum of businesses including health care, banking, services and nonprofits.

"This project is so necessary, that it needs to be done, regardless," Bourque said. "Lean manufacturing is like the big superwave coming in, the companies that are on that surfboard on that wave are going to meet the goal, the ones that are not using lean are going to fall off and drown.

"A two-person company can take these principles and use them as well as someone like Buck."

Source: CDAPress.com

The North American Auto Laggards Must Change or Perish

Wednesday, August 10, 2005 Kevin Mixer

The North American Automotive market is having a tough go of it. Brand owners continue to lose business and valuable market share to Asian rivals, and domestic suppliers, feeling the brunt, have been forced to declare bankruptcy. With suppliers providing more than 65% of the content in the average car today and a projected 74% by 2015, brand owners and suppliers must find a way to work together profitably or suffer the slow but inevitable extinction of the domestic Auto industry. At the recent annual Management Briefing Seminars, industry leaders tried to answer this year’s conference theme: “Is there calm after the storm?” They are looking for calm in a superior business model, which some members of the industry have moved toward and others achieved. Brand owners have done it by improving their demand management, suppliers by improving their manufacturing efficiency, and both by working together to develop and deliver high-quality, customizable vehicles. Balancing near-term demands for long-term success Fact is, today’s manufacturers must concentrate on a variety of near-term issues, including shrinking cycle times, product standardization, and the continued adoption of lean manufacturing. To succeed in the long run, though, auto manufacturers must do more: Become an expert at fast, cost-effective new product development and introductions. Lean manufacturing efforts must move further into flexible manufacturer patterns and adopt a more comprehensive use of postponement strategies, similar to those employed by the High-Tech industry (see my previous column “Automotive Industry: Look to High-Tech for Clues for Survival”). The standardization of components and parts across customer bases will level manufacturing and improve asset returns, requiring a more robust awareness of product development costs. Invest in future industry trends, not today’s operations. Brand owners should increasingly divest manufacturing and assembly operations and rely on the supply chain for quality product components at target prices. Profitable tier manufacturers should rely on their ability to use customer demand across internal operations, mainly through the use of enhanced scheduling and forecasting tools. The retail channel should concentrate on customization or “tuning” of vehicles before they leave the showroom. Focus on core strengths. Brand owners must invest heavily in retail and customer visibility systems to capture current and future product requirements. Tier 0.5 suppliers and system integrators need to invest in program and financial management systems for product development. Tier Ns must invest in manufacturing systems to maintain flexible manufacturing processes and improve quality programs—a critical effort as more warranty recovery for failed products will be aimed at manufacturers. In addition, domestic brand owners and suppliers will need to redefine their relationship. This revised relationship must be built on both parties accepting new demands and expectations and transforming current ways of thinking, responsibilities, and processes. Brand owners must: Work closely with suppliers in new vehicle development programs to ensure profitable new launches Accept that many supplier parts, such as engines, will be available to competitors Understand that innovation will be increasingly about being able to tailor products to smaller segments of buyers Suppliers must: Continuously improve part quality to ensure that they are not swamped with a rise in warranty claims that match their part contributions to vehicles Increase manufacturing efficiency and push costs down in order to ensure that they remain part of the ever-shrinking supply base Tailor processes to the mass customization needs of brand owners in both the manufacturing and post-delivery stages

Source: AMR Research