Lean manufacturing is a philosophy that shortens the time between the customer order and the assembly and shipment of the product by eliminating waste.
Continuous improvement, customer focus, one-piece flow and waste reduction play key roles in lean manufacturing. The goal is to eliminate activities that do not add value and that prevent one-piece flow.
Lean manufacturing means different things to different people. But, no matter how or where it?s applied, lean can result in numerous competitive advantages, such as reduced costs, improved throughput and enhanced operating margins. Additional benefits include defect reduction and improved customer satisfaction.
To explore the pros and cons of lean manufacturing, ASSEMBLY magazine hosted a panel discussion at the recent Assembly Technology Expo in Rosemont, IL. Key personnel from five leading manufacturers discussed their lean initiatives. The panelists were:
- Dave DeVault, manager of manufacturing at the John Deere Waterloo Works (Waterloo, IA). He oversees a tractor assembly line, an engine assembly line, a drivetrain assembly line and a foundry. The facility is currently in the midst of an ambitious 5-year lean program.
- Mike Herscher, leader of the lean enterprise office at Boeing Commercial Airplanes (Seattle). His responsibilities include education, training and support of implementing pull production, Six Sigma quality, and value stream analysis and alignment at some of the largest assembly plants in the world.
- John Smith, senior vice president of Ross Controls (Troy, MI), a leading manufacturer of industrial valves. He is responsible for overseeing two production facilities in the United States and five plants overseas.
- Steve Sperlazza, president of Vibration Control Technologies (Ligonier, IN). The company assembles torsional vibration dampers for the auto industry. Earlier this year, it was awarded the Shingo Prize, an annual award that recognizes manufacturers for streamlining their production processes and cutting out waste.
- Matt Wehr, manager of operations and management development at Toyota Motor Manufacturing North America (Erlanger, KY). He is responsible for supporting the Toyota Production System within the Georgetown, KY, plant and its suppliers? plants.
Success StoriesEach panelist works in a different industry, but their plants share something in common. They?ve achieved tremendous efficiencies by practicing lean manufacturing principles. They?ve discovered that lean manufacturing definitely works. It?s a unique process that can help manufacturers remain competitive and profitable.
The John Deere Waterloo Works has been developing a complete pull system for the past 2 years. Its 5-year-long lean journey aims to transform the entire manufacturing operation, which DeVault says "goes from molten iron to green paintfrom the foundry to the final assembly line." The facility is the largest manufacturing complex within the John Deere organization. It produces engines that range from 95 hp to 450 hp and large row-crop tractors with two- and four-wheel drive power trains, in addition to crawler tracks.
By applying lean manufacturing, the Waterloo Works is attempting to reduce square footage by 50 percent while improving efficiency by 30 percent. For instance, the drivetrain operation is being transformed from a 4.5 million square foot facility to a 1.4 million square foot plant. "But, it will be able to handle 30 percent more volume," says DeVault. So far, the Waterloo Works has taken 25 percent of work-in-process material out of the production process and achieved a 20 percent improvement in total productivity.
DeVault and his engineering team adhere to the Deere Production System, which is based on the Toyota Production System. "The goal is the right tractor at the right place at the right time, while addressing safety and ergonomic issues," explains DeVault.
Boeing Commercial Airplanes operates large manufacturing plants in Auburn, WA, Everett, WA, Renton, WA, Long Beach, CA, and Wichita, KS. The company is right-sizing itself to preserve margins in a very competitive industry, where production rates are hovering at historically low levels. It is trying to maximize asset utilization and operational efficiency. The goal is to generate new markets and increase revenue.
"With our lean global enterprise, we?re moving very quickly toward fewer and simpler assemblies that go together easier and faster," says Herscher. "All of our new products, such as the 777 and new-generation 737, have taken advantage of better integration in our manufacturability. A key strategy for us is fewer and simpler parts, such as more monolithic structures and less sheet metal assemblies."
Boeing is balancing its huge assembly lines, standardizing work, and using visuals and feeder lines. The company also has converted to a moving assembly line. In the past, aircraft were assembled using a slant production system. With the moving line, aircraft are lined up nose to tail, and travel from one assembly team to the next. For instance, the 757 line in Renton, WA, moves an airplane 24 feet a day through the final assembly stage. The 100-ton airliners are pulled down the line by an automatic self-guided tug.
"A moving line allows you to see what is normal vs. what is abnormal," says Herscher. "You have to...synchronize everything so the airplane can move."
Lean manufacturing has allowed Boeing to reduce work in process. In the past, 29 airplanes were in the factory. Today, only 17 aircraft are being assembled at any one time, while maintaining the same production rate.
"We took a lot of work off the airplane," explains Herscher. "People were doing a lot of subassembly work in the airplane. We now use feeder lines that reduce the number of transactions that happen on the airplane. That eliminates clutter and allows mechanics access to their work." Once the lean implementation is complete, Boeing will reduce flow time and inventory levels by more than 30 percent.
Ross Controls is a privately owned, 81-year-old company that builds electropneumatic valves used in a wide variety of applications, including industrial automation, food processing and amusement park rides. The company has approximately 100 competitors. It operates a union plant in Madison Heights, MI, and a nonunion plant in Lavonia, GA.
Ross Controls manufacturers more than 5,000 different products, with 50,000 components. The company makes extensive use of assembly cells by product family groupings.
"About 30 percent of what we do is custom," says Smith. "We can design a valve and be in production in 24 hours if we need to, but typically that process is two to four weeks."
Ross Controls has been on its lean journey for 2 years. The company has reduced inventory by 28 percent. "Lean has really driven our business in a weak economy," says Smith. "It has a big impact in a privately owned company. The cash flow that?s been infused into the organization as a result of lean has saved the company from disastrous results. The shift that has occurred in finished goods, work in process and raw materials represents millions of dollars in throughput."
Vibration Control Technologies is a joint venture formed recently with Freudenberg-NOK (Plymouth, MI). The company supplies DaimlerChrysler, Ford, General Motors, Honda, Nissan, Toyota and other automakers with antinoise products.
The company?s lean philosophy is based on GROWTTH, which is an acronym for Get Rid Of Waste Through Team Harmony. GROWTTH increases efficiencies in the use of time, labor, materials and space. The goal is to continuously improve performance by emphasizing teamwork and communication.
Kaizen events play a key role in the GROWTTH process. A kaizen event is a highly focused, action-oriented improvement workshop where a small group of employees from all levels of the organization get together and take immediate action to improve a specific process. The team concentrates on improving one specific process, making a major improvement in 5 days or less.
"Our catalyst for lean was to grow the business," says Sperlazza. "It is part of survival for us." By subscribing to lean principles over the last 2 years, Vibration Control Technologies has been able to improve productivity by 18 percent and reduce scrap by 48 percent. On-time delivery performance has improved from 79 percent to 100 percent. Inventory turnover has increased from 24 turns a year to 48. Dock-to-dock lead Arial have been reduced to less than 16 hours.
"Typically, when you have a new product launch, the first thing most engineers want to do is go acquire new capital," says Sperlazza. "Through this lean process, we?ve been able to avoid new capital acquisitions, which has forced us to become more flexible. Now, we?re fully integrated. We may run 10 different part numbers for three different customers on the same line."
Toyota Motor Manufacturing North America has been at the fore-front of lean manufacturing since its first plant opened in 1988. The company builds more than 1 million vehicles annually at assembly plants in Alabama, Indiana, Kentucky, West Virginia and Ontario. The Georgetown, KY, plant is the company?s largest and oldest facility in North America. It assembles the Avalon full-size sedan, the Camry midsize sedan and the Sienna minivan.
The Toyota Production System is based on the concept of continuous improvement. Every employee is empowered with the ability to improve his work environment. Improvements and suggestions by team members are the cornerstone of Toyota?s success. When implementing lean, the company does not overlook human needs, which include trust, security, personal development and long-term thinking.
"Toyota has a very strong track record of no layoffs," says Wehr. "We have a very strong discipline in our human resources system to not hire unless we have strong business. We also have a commitment on the sales side to continue to grow the business. At Toyota, employees don?t worry about whether or not they?ll be there in the future. When most people talk about lean, there?s a lot of anxiousness, because people think there will be fewer jobs."
Toyota develops people on every level of the organization. The company sees peoples? time as very valuable and views their capability as unlimited. There are training and development programs for every employee. "We keep our people challenged and interested in the business," says Wehr. "We also have job rotation for our managers and we cross train. That allows us to be very flexible when we need to change what people are doing."
Toyota assigns a group leader for every four to six operators. The team leader is trained in problem-solving skills. If any problems occur on the assembly line, an operator pulls an andon cord and the team leader shows up to correct the situation. "The team leader has the skill set to eliminate why something happened," Wehr points out. "That?s the engine that is driving continuous improvement in our plants.
"People need to feel that they?re making a valuable contribution," adds Wehr. "Having a system where operators can tell you about a problem and we can fix it together is much different than when you can?t really respond."
Panel DiscussionThe following is an edited transcript of the panel discussion.
Q: What is the biggest benefit you¿ve seen from lean manufacturing?
Smith: There¿s a big cultural change inside the organization. Attitudes changeeven in a union shop. With lean, we¿ve involved people and been able to get them to go to training classes. We¿ve implemented their ideas and their whole attitude has done a 180-degree turn. Now, it¿s not unusual to see people going to help out in another area where they can see that someone is behind or needs help. These are things that you can¿t ask them to do. Automatically, the attitude just changes.
Wehr: Morale improves in a plant with lean manufacturing. Cost-reduction initiatives that are being driven at the team member level are a big benefit.
DeVault: The customers are the real beneficiaries of lean manufacturing. They get more quality and value for their dollar.
Sperlazza: The transformation of the organization. When it takes hold, lean is part of your culture and your everyday business. It¿s not a stand-alone program. It¿s something engrained in your daily business operating systems. Another benefit of lean is being able to see employees on the line interacting with visitors or potential customers; they have the knowledge to answer questions directly.
Herscher: For us to be in the marketplace in 2016Boeing¿s 100th anniversarywe have no other alternative but lean manufacturing. It is the only strategy...that¿s going to make us competitive against some formidable opponents.
Q: What is the biggest challenge you¿ve faced with lean manufacturing efforts in your plant? How did you address that challenge?
Smith: Everybody had the idea that lean equals fewer jobs. That was our single biggest obstacle. People would not participate when we first started. They would do things that would lead you to believe that this will never work. You have to be relentless. We made a commitment that no one would lose their job as a result of lean. We challenged our marketing group to sell more. We said, "If we can be more competitive and make it at a lower price with a higher quality, the customer will be there and our salespeople will have an easier job."
Herscher: When we first started learning about lean principles, we modeled after the Toyota Production System. People in our organization said "we don¿t build cars; we build airplanes. They¿re different. There¿s some kind of intrinsic difference so that those principles don¿t apply." The biggest challenge for us was convincing our people that the principles do apply. They apply to everything that you do.
Sperlazza: We also had problems with the whole concept of one-piece flow. For some reason, people got it in their heads that "I¿m going to make one at a time." But, it¿s not one at a time. It¿s the idea that you¿re going to make a flow of one, so if there were a problem, we can catch that before we have a huge batch of bad parts. Both challenges center around commitment. Trust is one of the key elements needed to sell a lean program to anybody. They have to believe that you are going to do what you tell them, and you have to live with it.
Smith: When we started lean, we got off on the wrong foot. We had the idea that we¿d train a few people and they could go train others. But, that just doesn¿t work. Human involvement is extremely important. You have to change the culture of your organization and it has to be supported from the top. We said, "this isn¿t going to work unless you¿re involved," so we put the people on the plant floor in charge of their own destiny. All accountability is within the control of the people who actually do the job.
DeVault: The culture of management was the biggest challenge we faced. Not only "what¿s in it for me," but also "how does it apply here?" questions and combating the not-invented-here syndrome. Getting management buy-in and commitment is one of the most daunting tasks of implementing lean.
Wehr: The biggest challenge I face on a regular basis is convincing the manager who¿s in charge of the area that if his role changes because of lean, he¿s secure. Changing the role of the manager from being directive into a support role is the biggest challenge.
Sperlazza: Area managers in particular feel threatened when you first go into this journey. You have to win them over. The mentality of batch vs. single-piece flow is very difficult until you immerse yourself in it and you see the benefits and the reality that it does make it better in all aspects: safety, quality and certainly cost.
Q: How do you communicate lean principles upstream and downstream in your organization?
Sperlazza: It starts with a policy deployment by the CEO, who creates a vision and the key metrics for the upcoming year. The higher level is more visionarywhere are we going, what do we need to do? Then it¿s cascaded down through the organization to the lowest levels. As it cascades down, it becomes points of action with specific activities or projects...to support the overall objectives.
Smith: We meet weekly with every single person in the company and disclose anything they want to know. We share everything so people know what¿s going on. We spend a lot of time walking around the shop floor communicating what we¿re doing and what the expectation is. We encourage them to meet regularly without management presence and talk over what¿s important to them. The real key is communication.
Wehr: We communicate upstream through a monthly meeting with the president of North American operations. We report on what¿s going on with the facilities that we¿re supporting. Downstream, we always go to the shop floor and talk to team members and team leaders.
Herscher: Top management reviews eight to 10 performance charts once a week. It¿s a very disciplined and focused process that¿s almost relentless. It¿s the same message over and over and over again at all staff meetings. It is our single most important strategy.
DeVault: The most important part about lean communication is the [learn-then-do process] that occurs on the shop floor.
Sperlazza: We have hourly operators visit our customers once a month. They talk to their peers on the line. They want to know how their product is working and what they can bring back to their team to make improvements.
Q: What group is the most difficult to "sell" lean to?
Sperlazza: Typically, mid-level managers at the supervisory level, due to fear of the unknown and what will happen with change. They tend to be most resistive and say "it¿s more work for me." But, once you win them over, you can get to the shop floor level very quickly, because they¿ll hear a consistent message.
Smith: The hardest group for us to convince was middle management. They had been doing things the same way for a long time and felt that their way was correct. They had a negative attitude. We initiated what we call "the 60 percent rule." If you¿re 60 percent confident that what you want to try will work, then try it. We stress to people that everything is not going to work. The important thing is that you reflect back and honestly address the issue. Did it work or did it not? Did it change the metrics? Did it improve throughput? If the answer to all that you¿re trying to do is "no," then undue what you did. That¿s OK.
Herscher: Early on, we had trouble with middle managers in the factories. Then, as we got more educated in the factories, we had naysayers in the office, especially among the finance folks. But, we¿ve broken that logjam. Our new, hidden challenge is that we now have people on the lean bandwagon who read a book and think they get it. They do all kinds of things in the name of lean, but they really are quite hurtful. Their knowledge is really very thin and they¿re out doing things that are counterproductive.
DeVault: The general manager and the supervisor are the most difficult people to sell the concept of lean manufacturing to. The general manager is the first to lose his job if we fail. The supervisor is the one who has to do it every day.
Smith: Too often, manufacturers say "I don¿t want to change; everything that I did before was fine so I¿m just going to leave it be." But, if you don¿t change and don¿t adapt, you¿re going to have major problems. The idea of going to the people and letting them fail is hard on middle management, because someArial it may cost you money for a failure. Often, middle management feels responsible because if they fail, there may be repercussions to them. You have to convince them that they have to try new things and not be so concerned about failure.
Sperlazza: It¿s OK to fail. You¿re going to have kaizen events that do not work as intended. If that happens, don¿t let them floundergo back and revisit in 30 days. If you need to, do another kaizen event. Some of the best learning is from failure. SomeArial, if you go through a kaizen event and tie up a lot of resources, but it doesn¿t go quite as planned, management loses support. You must be unwaivering and understand that you¿re going to make mistakes.
Wehr: In our structure, we have team leaderswith four to six operators reporting to themand group leaders over those team leaders. The group leader is committed to continually challenging the process. With lean manufacturing, reports typically talk about everything that needs to be fixed. That change in thinkingfrom being able to report only good things to being able to report problems so that they can be addressedis a big shift. That has to occur in an organization for lean to work. Top management must understand that¿s going to happen and that it¿s not a reflection of a poor manager. That¿s a reflection of a manager who¿s trying to grasp the concepts and apply them.
Q: Has lean manufacturing improved communication between design engineers and manufacturing engineers within your organization?
Herscher: The communication between engineers and the factory has improved. We typically had walls between engineering, production and suppliers, but we are starting to see some real enlightenment. We¿re really working hard to put engineering where things are built so that proper changes can be made in order to improve operational efficiency.
Sperlazza: We have a production preparation process for any new business that we introduce to our manufacturing floor. We always include our design engineering group, manufacturing engineering, a quality engineer, a supervisor and at least two operators. We also like to [involve the] supplier that is going to provide us with a component or a new piece of equipment. With that cross matrix, we do a cell mockup with cardboard samples, takt Arial and load leveling. Through that process, we have...eliminated barriers of animosity between those two groups. Now they have to work together. That was a real breakthrough for us.
Smith: One of the rules of lean is to have a solid connection between the supplier and the customer. We had a lot of walls, but a lot of these have been torn down, because we have taught people who their supplier is and who their customer is. People now value what their supplier and what their customer knows about what they do. One of the most difficult barriers we had was in our machine shop, where people just think differently than assembly people. They have now come around to understand how they fit into a one-piece flow cycle. Before, they did everything in batch.
DeVault: When embarking on our lean journey, we recognized that we had to be a process-centered operation. We divided our business into three processes: product delivery, order fulfillment and customer support. Product delivery starts out with the engineer¿s dream. The order fulfillment process starts out with the customer¿s dream. The customer support process makes sure that the customer actually gets what he wants. The quality side of the equation is how we can positively touch our customers from the manufacturing side of the house. It inherently flows back to the designers¿ board. Keeping everybody in lock step with the returns, allowances, warranties and quality cost per tractor is imperative to making a production system work.
The second part of the panel discussion, focusing on waste elimination, accounting practices and capital equipment expenditure, will be published in the January 2003 issue of ASSEMBLY.