Lean Manufacturing Definitions

Keywords: Lean Definitions

Lean: Lean manufacturing is the process of analyzing the flow of information and materials in a manufacturing environment and continuously improving the process to achieve enhanced value for the customer.

Waste: Anything that uses resources, but does not add real value to the product or service.

Value Stream Mapping: A tool used to identify the current flow of material and information for a product or process, highlighting the opportunities for improvement that will most significantly improve the production system.

Cellular/Flow Manufacturing: Organizing people and machines into the most efficient combinations to maximize value while minimizing waste.

Job Shops: Custom Solutions for Custom Shops

Keywords: Value Stream Mapping

Long lead times, missed delivery times, demanding or nonpaying customers, too many unsuccessful quotes, too much shop overtime—life isn’t always smooth for job shops.

The term "job shop" refers to custom manufacturing and make-to-order businesses. These firms share some common characteristics that differ from repetitive manufacturing settings, for example using a quoting process to secure work, and producing work on an order-to-order basis to meet customer specifications. While some job shops do purely custom work, many manufacturing firms have a mix of custom and repeat orders.

"Job shops are distinct from repetitive manufacturers," says Larry Baker, a WMEP manufacturing specialist. "Because there is variation in what they do, job shops think there is no systematic approach that’s going to help them see patterns in their operations and improve their processes. However there are tools that job shops can use to achieve sustainable improvement.

Arimon Wins Supplier Award, Credits Cell Kaizen

Keywords: Lean Awards

Arimon Technologies, Inc. recently received the Outstanding Supplier Award from a major customer for a manufacturing cell it created during a kaizen blitz event.

“We’ve had 100 percent on-time delivery for more than a year,” says Randy Detjen, Arimon’s lean manufacturing coordinator. Arimon, a wire harness manufacturer, employs about 140 and has plants in Montello and Manitowoc.

The company received the award from Scotsman Ice Systems, a global ice machine manufacturer. Arimon started on the lean journey two years ago. Quality has improved, inventory costs are down and the cell is a “selling” advantage. “We had a prospective customer come in, meet with the team leader and say, ‘these are the people I want working on my product.’ ” Detjen said.

Getting Lean Beyond the Shop Floor

Keywords: Office Organization

Order entry, quoting, scheduling, design and engineering, purchasing, accounting—these and other front office functions can provide an eye-opening opportunity to create improvement, eliminate waste, and increase profits in your business.

Often, however, businesses implementing lean manufacturing bypass the front office and target their manufacturing processes. After all, front offices have paperwork, not inventory, right?

"The greatest opportunities for improvement are often in the non-manufacturing, front office areas. Ineffective front office processes also make it more difficult for manufacturing operations to do the best, most cost-effective work," WMEP manufacturing specialist Brenda Kujawski states. "A lean enterprise must be lean in every area, including the office areas."

Office wastes can be defined in the same lean terms as we apply on the shop floor. These wastes can include:

Kaizen Blitz Events Deliver Quick Savings

Keywords: Kaizen Blitz

Small manufacturers in Wisconsin and across the nation are using kaizen blitz events to get a quick payback on targeted improvements.

A kaizen blitz is a high-impact, intensely focused core component of lean manufacturing. It produces quick results - in five days or less - and often is focused on cellular manufacturing and setup reduction initiatives. In a fully transformed lean company, kaizen blitzes are routine because the focus on improvement and greater efficiency never ends. But the benefits of a blitz can be realized by any manufacturer.

“I’ve seen companies save anywhere from thousands to $100,000,” says Dick Welsch of the Wisconsin Manufacturing Extension Partnership (WMEP). Welsch, who specializes in facilitating kaizen blitz events, says he has seen instances where a successful blitz “has stopped a huge customer and millions of dollars of business from walking out the door.”

5S/Visual Workplace: Read the Signs and Improve Your Bottom Line

Keywords: Organization

When you enter a roadway, the space is divided into lanes and the shape and color of the lanes’ stripes communicate a particular function or rule. Traffic flow is regulated with color-coded signs or signals. Other signs tell you how to get to a particular destination or what food, fuel, and fun can be found at the next exit of the highway. Rumble strips warn you of an upcoming intersection. Parked cars are “shelved” into particular spaces along a street or off the road to allow the flow of other cars. Snow is removed on demand and potholes are filled on a schedule. The roadway operates as an integrated system of people, space, and machines.

Similarly, a manufacturing operation is also an integrated system of people, space, and machines. Recognizing this, we can make significant improvements simply by applying organizing signals, methods, and rules onto the system.

Value Stream Mapping Brings Quick Rewards

Keywords: Value Stream Mapping

In these days of economic uncertainty and increased competition, boosting the bottom line is critical to long-term success. One way to do this is through value stream mapping.

Value stream mapping is a key method of implementing "lean manufacturing" to reduce waste and streamline both material and information flow.

A value stream map identifies all the actions that take a product through the manufacturing process, from obtaining raw materials to delivering the final product. The idea is to draw, on one page, a "map" of the flow of material through production and the flow of information from the customer back to each production process and key supplier.

Pointe Precision LLC in Stevens Point undertook value stream mapping in February 2001. "I learned about it when I attended one of WMEP's 'lean' workshops," says president Joe Kinsella. "Many of our customers come back year after year for price concessions, and we realized we had to reduce waste and become more efficient in order to do this. Value stream mapping was a great place for us to start."

Wisconsin Manufacturers Grow Sales With Exports

Keywords: International Business

Looking for new customers – and who isn’t? It may be time to take a hard look at opportunities to sell your products overseas or with neighboring Mexico and Canada.

Now that the dollar is falling against world currencies, prices for American goods are more competitive. “The 11% fall of the U.S. dollar since the first of the year against major trading currencies worldwide has improved our price competitiveness in all major markets,” says Louis Janowski, a Madison-based outreach consultant with the Wisconsin Department of Commerce’s international trade division. “The trend looks like it may be sustained.”

In addition, Canada and Mexico offer significant export opportunities for Wisconsin manufacturers. NAFTA gives preferential treatment to U.S.- made products and the proximity helps keep shipping costs down.

Milwaukee Firm First in Certification

Keywords: Quality Management

Milwaukee-based Wisconsin Steel and Tube Corp. became the first small manufacturer in the state to achieve ISO 9001:2000 registration. The company distributes tubular and bar steel used in the production of outboard motors, motorcycles and heavy equipment as well as provides value added manufacturing services to OEMs, machine shops and small companies.

“We see this as an investment in our future and a way to build our customer base,” said company president Michael Poehlmann. The company contacted WMEP for assistance after realizing it didn’t have the internal resources to go it
alone.

WMEP helped Wisconsin Steel and Tube’s 56 employees form teams, learn to effectively organize their work, and implement consistency in their processes. Cost-savings measures were introduced that improved the company’s ability to deliver a high quality product to customers. These cost saving measures have been especially important during the economic slowdown, when volume is down and cost control becomes even more crucial.

Pull Profits Back into Your System with Pull/Kanban

Keywords: Pull Systems

Producing excess inventory can cause a major drain on margins. The loss incurred by inventory stored for a year can reach as high as 25 percent of the value of the product. In today’s economy, that creates an unacceptable pressure on already tight margins. A major shortcoming of traditional manufacturing, with its emphasis on batch processing, is the cost of production and storage of excess inventory. Not only is overproduction costly, but it is sometimes used to cope with defects within a process rather than tackling quality issues upfront. The characteristic slow turnaround in traditional batch manufacturing also stifles responsiveness to custom orders, thus further limiting customer satisfaction.

Some of the fundamental goals of lean manufacturing include the reduction of waste, increases in productivity and improved quality. Through the use of “pull systems,” companies accomplish these goals, providing the worker with everything required – all the necessary parts, tools, materials, training, guidance, and opportunity – at the right place and at the right time.

Despite “Near Death” Experience, JFL Keeps Focus on ISO

Keywords: ISO Quality

For five years, Sussex-based JFL Manufacturing Co. Inc. was in a major growth mode. Sales were doubling for the contract machining company, the plant expanded from 10,000 to 30,000 square feet and the number of employees grew from 20 to 60. By all accounts a successful operation.

But there was a cost to JFL’s success. The company hadn’t changed the way it did business to accommodate the huge growth.

It became clear to JFL president John (Chip) Losee that the company had much to gain from finding ways to work more efficiently. “We did some soul searching …We very much wanted to get to a point where we were more organized.” The company decided ISO 9001 certification offered the best avenue to accomplish that goal. In August 2000, the company retained WMEP’s Michael Hablewitz to help guide them through the process. Hablewitz conducted a needs analysis and helped the company form a quality management team.

Lean Culture Boosts Morale, Retention, Productivity

Keywords: Lean Manufacturing

People have trouble saluting the flag if they can’t see it," said Sam Miller, WMEP manufacturing specialist. In other words, if you expect to get the promised benefits of lean manufacturing, employees need to understand the vision and behaviors necessary to get there. Without that, your improvement efforts will fall short. With an empowering lean culture, employees can be proactive, energized, and drive rapid continuous improvements, bringing in dramatic bottom-line results.

Companies that have successfully instilled a lean culture consistently realize:

More innovative, team-directed solutions
Lower employee turnover
Better success at sustaining improvements
Greater numbers of improvement actions

Drewco Finds Relief with New Health Care Program

Keywords: Health Care Management

Two years ago, a custom machining shop in Franksville, Wisconsin was experiencing what companies of all sizes are now struggling with. Drewco’s healthcare costs were increasing at a rate of 19 to 28 percent annually. So, they sought relief. What they found was an innovative healthcare demand management program through Corporate Health Concepts (CHC), a WMEP Resource Network Partner.

Putting the brakes on inaction

Increases in healthcare costs can often single-handedly cause a company to lose so much money that it is no longer profitable. CHC helped Drewco analyze what CHC affectionately calls "The Train Wreck" to show the impact of healthcare costs on the company’s future bottom line. In this exercise, they analyzed what would happen financially, based on healthcare costs alone, if Drewco did nothing about its current healthcare situation.

Manufacturers Use NASA Technology to Compete

Keywords: NASA Technology

NASA’s cutting-edge technology does more than power rockets into outer space. Applying results from their research, they’re working with U.S. manufacturers to enhance processes and solve problems manufacturers have with new products. It might sound like rocket science, but working with NASA through WMEP is an easy process.

WMEP recently was chosen by Great Lakes Industrial Technology Center (GLITeC) to serve as GLITeC’s Wisconsin affiliate. GLITeC is one of six regional technology transfer centers. Battelle, the world’s largest not-for-profit R&D organization, operates GLITeC. In its role, WMEP helps Wisconsin manufacturers access and acquire technologies for commercial and industrial applications.

As an example of how effortlessly GLITeC helps manufacturers, Moen, Inc. turned to GLITeC when they identified a market need for polished brass kitchen faucets. At that time, polished brass wasn’t used in kitchens because it lacked durability and was expensive. Chrome was widely used instead. GLITeC hooked Moen up with NASA Glenn Research Center, which has expertise in protective coatings. The result was significant savings in research costs to develop Moen’s "Life-Shine" coating. NASA Glenn helped Moen avoid some dead ends by evaluating technologies and visualizing the transition from lab to commercial production. Moen launched Life-Shine in 1997.

New ISO Standard a Tool for Smart Growth

Keywords: ISO Standards

Many small manufacturers are embracing the new ISO standard, ISO 9001:2000, to gain a competitive edge in markets here and abroad.

“Businesses are realizing that ISO certification isn’t just something you hang on a wall,” says Michael Hablewitz, a WMEP manufacturing specialist who has helped guide dozens of manufacturers through the process. “The new standard can be a powerful catalyst to help manufacturers operate more efficiently, improve product quality and increase market share.”

Getting ISO registered can pay big dividends, according to a recent survey published by the American Society or Quality and the Automotive Industry Action Group. Manufacturers reported benefits of $300,000 to $10 million as a result of certification, in the form of sales increases, improved on-time delivery, reduced defects and fewer product returns.

Get the most from Your Value Stream Mapping

Keywords: Value Stream Mapping

You’ve done value stream mapping and made improvements to your manufacturing process. Productivity is up. You’re getting lean. So what’s next?

According to one of the pioneers of Lean Manufacturing, the answer is, “Do another value stream map.” Toyota says companies don’t get proficient at value stream mapping until they’ve done it at least seven times on the same process.

“As companies do more value stream maps they gain increased benefits,” says WMEP manufacturing specialist Brenda Kujawski. “They learn how to more effectively use Lean tools and find more opportunities for improvement.”

Value stream basics
Value stream mapping is a four-step process that uncovers waste and reveals how to streamline your manufacturing process. First, identify the value stream or process to map. Second, you make a current state map showing the current flow of materials and information needed to make a product. Next, you diagnose problems, suggest changes, and make a future state map representing the improved manufacturing process. Finally, you implement the changes.

To Succeed with Lean Efforts, Manufacturers Must Adopt Lean Accounting Procedures

Keywords: Lean Accounting

We all know that "two plus two equals four." But when was the last time you heard someone say, "three plus one equals four"? The total is the same – it’s just a different way of adding figures.

The accounting system within most manufacturing companies isn’t much different. Accountants tend to use the same method of adding up the numbers as they have for years. In essence, as long as a system is turning out parts, the people who keep track of income and expenses interpret it as machining efficiency, which is easily quantifiable. Unfortunately, such accounting mentality is only encouraging and rewarding unnecessary overproduction.

According to lean experts, traditional methods of accounting and measurement can become a hindrance to any manufacturing business today, and can be particularly damaging to a company trying to implement a Lean Program.

Tools for Smart Growth

Keywords: ISO

Not all companies are required to become ISO 9001:2000 certified. So why are so many Wisconsin manufacturers making the effort to become ISO compliant or certified anyway? Simply stated, ISO compliance equals serious benefits for business owners. More and more companies are learning that ISO 9001:2000 is far more than an updated list of standards. Rather, it is a foundation effort that gives them a more focused and efficient business operation, with distinct market advantages.

Realizing the benefits

The benefits of becoming ISO certified go beyond improved quality. Manufacturers report benefits of $300,000 to $10 million as a result of certification in the form of sales increases, improved on-time delivery, reduced defects and fewer product returns. The 2000 standard is superior to previous standards because it’s a business system that addresses quality – not just a quality system.

Make Your Company More Valuable to Your OEM Customer

Keywords: Supply Chain

As internal productivity, downsizing, outsourcing and delayering initiatives have progressed, many large original equipment manufacturers (OEMs) have become increasingly dependent on purchased material and services. As companies become less vertically integrated, they must rely more on their suppliers for product development, quality, productivity and technology.

One objective today for OEMs is to establish “vertical integration” throughout their chain of suppliers – thus the creation and evolution of “supply chain optimization.” This strategy seeks common goals, linked business processes, consistent improvement strategies and tactics and relationships based on cooperation between OEMs and their suppliers.

OEM supplier networks typically are very broad and often very deep, with many products passing through several “tiers” of suppliers before reaching the OEM. Because the dependency on suppliers has become so important, most OEMs now are working to reduce the number of alternative suppliers for any given product or commodity. Maytag, for example, has whittled its ranks of direct-material suppliers from 2,700 five years ago to 1,200 – and aims to be down to around 300 in two more years.

Creating the Lean Enterprise: System-Wide Approach Provides

Keywords: Lean Manufacturing

Today’s competitive marketplace requires faster response, better service, added value, and lower prices. How can you address eroding profit margins, challenges to market share, and increasing costs? How can you create an operation that is not only successful today but is also sustainable despite these ongoing challenges?

The solution may lie in creating a strategic shift within your company. Many companies now have set their sights on becoming a “Lean Enterprise.” This bigger- picture, long-term approach to lean manufacturing provides sustainable, enterprise-wide improvement that far outweighs the benefits of more intermittent lean implementation efforts.

One Wisconsin firm that embarked on a lean enter-prise journey three years ago reported over $4 million in new sales and $6 million in retained sales this year alone. As a result of the company-wide approach to lean improvements, the firm met customer demands for a 6 percent price reduction and beat its competitors’ pricing, while maintaining a healthy profit margin.

Globalization - Another Perspective

Keywords: Globalization

Globalization - it's taken on a terrible set of perceptions in modern American thought. But this author argues that Americans view globalization with far too negative of an attitude.

Globalization: a sweet word gone bitter?

With the recent commotion around offshore outsourcing the word globalization has landed in a black book for many citizens of industrialized countries. This is particularly unfortunate, because the very trend of going global was initiated by these same industrialized countries at a time when they were in search for alternative markets for their massive productions of goods.

Here’s the perspective that many fail to acknowledge: offshore outsourcing is definitely nothing new. It’s just the same ligament on the body called globalization, but now seen from the other side. A recent Business Week article explained it outstandingly by stating that, in the past, the same corporations that are now outsourcing jobs were outsourcing products. Basically, these companies were then offshoring the "demand" for American goods and services to countries such as India, while they are now simply making the next, logical step, which is “continuing their strategy of profit maximization by outsourcing the supply of their products.”