lean manufacturing contd.

Is the 'Lean Production' Process Right
for You? cont'd.

"Sounds simple and the end result often is simple. But, the re-thinking that is required to get companies from where they are to where they need to be is often formidable, though rarely if ever insurmountable. Ultimately, focus of organizational resources and attention goes to 'the value stream,' not to perpetuating the organization's status quo. In addition to removing waste to shorten the value stream (the focus of many lean initiatives a few years ago), companies are now fundamentally reconfiguring their businesses processes so that the underlying sources of waste are eliminated and the waste itself never comes back."

To Learn about Lean, Take a Hike

After ten years with Nissan (1980-1990) and prior work with Ford, Dan Ploger started his own consulting business in lean production, Associated Facility and Manufacturing Engineers, Inc.(AFME). So he's been at the process for some time, developing his own methods and working generally with $50-150-million companies, some in turn-around. We asked how the process begins.

"Well, you trace every step of the product, all the way from the iron ore, if you will. Every time something happens to that—whether it's moved or smelted or rolled, whether it sits in queues or inventory—you trace it all the way to the customer and identify each of those steps. Then you deter-mine which steps are value-added (doing something to the product that the customer is willing to pay for).
A customer is not willing to pay for huge inventory or moving the product from one machine to another, but he is willing to pay for melting that plastic and making it into a usable form or painting it to match his car.

"You also identify the non-value-added steps, attaching costs to each of these, which helps you prioritize how you want to tackle the problem. We believe you can put dollar figures on everything. If you can't measure it directly (sometimes you can measure it down to a thousandth of a penny), you can make a pretty darn good guess. Even things like employee turnover have a cost—training, how much scrap a new worker will produce, etc.—and these numbers can be very surprising. Measurement is the only way to keep score. It's like playing a basketball game, but you don't get any points. You just vote afterwards on who was the better team." Ploger is describing "value stream mapping," which is at the heart of the lean process.

According to Jim Womack, president of the Lean Enterprise Institute and the man who gave us the name for lean production, there are two important steps a business should take before beginning the actual mapping. First, pick a product family from the consumer end of the value stream and take a walk through the plant "backwards" to the raw material stages of the product. Ask a series of very specific questions about the value stream of this product and how it performs from the customer's point of view. Then, construct a product family matrix to see how many downstream (i.e., closer to the customer) production steps your products share. This helps you create product families from a production, as opposed to a marketing, viewpoint.

Good summaries of the thinking behind lean, its origins and applications are also on the websites of the Lean Enterprise Research Centre (LERC) and the Manufacturing Management & Technology Institute (MMTI). You need to learn as much as possible about it before jumping in. If you're in a commodity-type business, says Ploger, you're at a disadvantage since others can always make the same part you're making. But if you're a small custom outfit, then lean offers the great advantages of service and flexibility—the best ways to serve your customers and lower your costs.

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