To survive today’s chaotic and volatile world, manufacturers should get in touch with their inner Bo Schembechler. In other words, adopt a football mindset. Schembechler, the legendary coach at the University of Michigan in the 1970s and 1980s, always believed the key to his teams’ success on the field was defense.
“The times ahead of us are uncertain at best,” says Kevin Duggan, principal of Duggan Associates and founder of the Institute for Operational Excellence (North Kingstown, RI). “Creating a good defense, defining what we can produce in terms of mix and volume, and then working to improve it are critical steps. By producing a high mix of products at low volumes, we can adapt to uncertain markets, where change is the only certain thing ahead.”
Duggan suggests creating a defensive game plan that includes the following lean elements:
- Stability. Quality at the process level is a must. Each process should be predictable, repeatable, reliable and dependable. This forms the foundation for the rest of the defensive strategy.
- Flow. Each process should connect to the next process physically, and not through a schedule. One-piece flow, FIFO lanes or kanban should drive flow from the receiving dock to the shipping dock. For each product family, only one process should receive a schedule. “All other processes work on flow and pull, based on this schedule point,” says Duggan. “Any inventory between processes should be controlled visually.”
- Takt and Pitch. Takt is the customer demand rate. “Set the ability of the processes to produce at takt,” Duggan suggests. “Pitch is our physical management time frame. This established time frame lets us know how often things are going right or wrong.” For example, a pack of 10 units produced at takt time should move from assembly to packaging every 30 minutes. If they move every 30 minutes, all is well. If they do not move every 30 minutes, then something is wrong, which initiates root cause problem solving.
- Visual. “Each operator should be able to see normal flow, and abnormal flow,” says Duggan. “Standard work should exist for normal and abnormal flow.”
After implementing a defensive plan, it’s time to get offensive by focusing on these strategies:
- Establish interval scheduling. “In this changing environment, we may not know what the customer will want, but we can establish what we can produce,” notes Duggan. “Therefore, we can create the ability to produce a set volume comprised of a mix of products over a certain period of time. For example, we can produce 1,000 units comprised of 50 part numbers every two days.”
- Shrink the time required to produce the mix. Focus on setup reduction. Duggan suggests establishing a relationship between setup times and scheduling intervals. “The smaller the setup times, the more mix we can cycle through in a shorter amount of time, and [we’ll be better able] to meet changing customer requirements,” he points out.
- Create the ability to adapt. “Link salespeople into selling at the capability of production, not in volume, but in mix,” says Duggan. “Volumes may be down, so compete on the mix. Have them work with customers to offer a greater variety of products in lower volumes and at shorter lead times than the competition.”
- Gain market share. “If true flow is established, as outlined in the defensive game plan above, then inventory turns will increase, lead times and inventory will go down, and on-time delivery and quality will go up,” claims Duggan. “The net result is a reduction in the total operational cost required to produce the product. Money will flush to the bottom line [and help your company] gain more market share.”