News Notes

July/August 2001

Busting Waste Out Of Your Business

by: Jeff Vincent, CITEC Field Engineer

One of CITEC's primary objectives is to help Northern New York's manufacturers eliminate waste in their operations. By eliminating waste, your company will become more profitable because your costs will be lower and you will have additional capacity to sell more products.

The first step is to identify all of the wasteful processes, both obvious and hidden, in your company. This is best accomplished by a fresh set of eyes; not by company employees who have become acclimated to their surroundings; but, rather by an outside expert who knows what to look for. The next step is for that expert to begin working with your employees to eliminate or significantly reduce the waste, and keep it out of your operation.

CITEC has identified eight waste factors that may hinder the efficiency and profitability of your company. These factors can be difficult to spot and control. Thus, consistent and persistent effort is required to keep them out of your operation.

Eight Waste Factors:

#1 - Inventory Waste

Inventory is a measure of total manufacturing effectiveness. Too much or the wrong kind of inventory costs money! But the inventory didn't get there by itself. It was created by the system. Basically, inventory is a symptom -- it hides underlying issues within a company.

Inventory includes raw material, work-in-process (WIP), obsolete goods, and finished goods. There are many contributing factors to excess inventory. When inventory is reduced, these underlying issues are exposed and should be addressed to ensure long term success.

#2 - Defects

Defects have been Enemy #1 since the late '70s. The concept of "do it right the first time" is the goal in any process or task because defects increase the cost of production. So, when you decrease the incidence of defects, you will lower your production costs and increase your profits. An additional benefit of reducing defects is increased employee morale.

#3 - Processing Waste

Defined as "any effort that adds no value to the product or service from the customer's viewpoint." There are many tasks, operations, and processes that occur on a daily basis in your company. Many are vital for survival. However, based on the definition above, how many of these tasks, operations, or processes make a difference to your customer? While it is very difficult to answer this question, it is one that can add significantly to the efficiency and profitability of your company.

#4 - Transportation Waste

This is a killer waste. There is no value in moving material, raw components, partially completed product, or finished goods around the plant. Growth, new equipment, and/or additional capacity present opportunities for more business but can present an opportunity to introduce increased transportation or motion waste. Poor facility layout is a large contributor to transportation waste.

#5 - Overproduction Waste

Overproduction and inventory wastes are closely related. Overproduction increases WIP, thus overall inventory is increased. Remember, inventory is a symptom -- a measure of total manufacturing effectiveness. Many factors contribute to overproduction. By reducing overproduction, your company can lower inventory, improve quality, have less rework and experience improved productivity.

#6 - Motion Waste

Motion waste is "any movement of people or machine that does not add value to the product or service." Walking, putting something on a shelf, then going back to retrieve it later is an example of motion waste. Processing waste, transportation waste, and motion waste are interrelated -- looking at one requires looking at the other two. Motion waste is very subtle and its reduction/elimination must be approached by a systematic methodology.

#7 - Waiting Waste

No manager, supervisor, or lead person likes to see an operator standing around or just sitting there...waiting. There are usually very valid reasons why the operator is waiting to perform their task. This is one of the many reasons for increased inventory -- to reduce the waiting time. However, just like inventory, waiting is a symptom. The root cause of the problem is being masked or hidden.

#8 - People Waste

Equipment, machinery, and processes are vital components to an organization because they can provide the means to produce product "bigger, faster, better." However, it is the human factor that makes it all happen.

"The waste of not using people's (mental, creative, physical, skill) abilities" is the definition of People Waste. Your employees have a wealth of knowledge and ideas that need to be applied to all of these waste factors. Give them the power/authority to find and address the root causes of these waste factors in cooperation with their coworkers. After all... "Two heads are better than one!"

JV

To learn more about the eight factors of waste, visit our
Waste Busters section.

Mastering One Of Lean Manufacturing's Basics -- 5S

By: Charles Skinner, a 5S consultant for Productivity Inc.
in Portland, Oregon

As manufacturing activity slows, plant managers shift their attention to increasing efficiency in their factories through lean manufacturing methods. Knowing exactly where to begin a lean journey is the first task facing plant managers and improvement teams. The answer is simple -- the 5S program. The 5S's are: sort, set in order, shine, standardize and sustain.

5S is critical to the implementation of all other improvement efforts. 5S significantly helps in implementing other lean tools such as quick changeover, total productive maintenance and mistake proofing, and it helps to sustain improvements.

The goal and process of sorting is organization -- forcing people to remove all items not needed for production. But people often don't want to let go of parts, machines or data that might be needed in the future... "just in case." By "red tagging" items, workers are able to set aside and evaluate items and information in terms of its usefulness and the frequency it is used. Those items and information are then either returned, stored elsewhere, sold, given away or thrown away.

Red tagging is best done in one target area at a time and within one or two days. When red tagging is completed, problems and annoyances in the workflow are reduced, communication between workers is improved, product quality is increased and productivity is enhanced.

"Set in order" organizes a work area for the maximum possible efficiency. Organization and orderliness work best when they are implemented together. "Set in order" means arranging needed items so they are easy to use and labeling them so anyone can find them and put them away. The ideal is economy of time and motion. When orderliness is implemented, there is no wasted human energy or excess inventory.

"Shine" -- as the word implies -- means to thoroughly clean everything in the work area. Planning a cleanliness campaign is a five-step process including: cleanliness targets, assignments, methods, tools, and follow-up inspections.

The goals are to turn the workplace into a clean, bright place where people enjoy working, review the first two Ss and find the source of dirt or litter and eliminate it. At all times, everything must be kept swept and clean. "Shine" should become so deeply ingrained as a daily work habit that tools are also kept in top condition and are ready for use at any time.

Once the first three Ss are in place, "standardize" details a plan to maintain the continual improvement activities. Standardized cleanup integrates sort, set in order, and shine into a unified whole, and "sustain" (the fifth S) involves workers in planning how to keep it that way. Having clearly designated tasks completed on a regular basis is the key.

Empowering shop floor workers to take control of their daily activities and their work environment is the unifying principle of 5S. By taking an active role in designing and maintaining their workplace, workers take more pride in their work leading to greater satisfaction and higher productivity.

Companies can understand details of a complex process, and use 5S to implement the future state map. 5S is the foundation for successful lean implementation and can be used to begin, support and sustain the lean journey.

CS

WANTED: Lean Training For All Tiers Of Industry

Manufacturing News
June 15, 2001 - Vol. 8, No. 11

According to Joseph Day, president/CEO of Freudenberg NOK and chairman of the Original Equipment Suppliers Association, thousands of small- and medium-sized manufacturers serving as suppliers to the auto industry in the United States need to implement the principles of lean manufacturing.

His comments, made at the annual meeting of the Shingo Prize (awarded to companies that best exemplify implementation of lean manufacturing principles), indicated that the North American auto industry would suffer greatly if its suppliers don't start embracing lean practices.

The big automotive OEMs and their Tier 1 suppliers are spending millions of dollars adopting lean, but they are not addressing the millions, "perhaps billions of dollars in waste caused by the sub-tier supply community," says Day.

For the North American automobile industry to prosper "we have to share lean practices throughout the supply chain," says Day. "We have to create real-world, practical lean training programs that small companies can afford and we have to create some bold new economic models that will provide the proper incentives. If we don't, we won't even have a prayer of competing."

For a lean program to be a success, Day told the Shingo Prize conference held last month in Detroit, a company must be persistent, passionate and relentless in its execution "of all facets" of the Toyota Production System.

Freudenberg NOK, with annual sales of $4 billion, has achieved stunning success with its own lean program called "GROWTH" -- get rid of waste through team harmony. The company has reduced its defect rate from more than 2,000 ppm to less than 50; it has reduced work-in-process inventory by 80%; increased labor productivity by 25% per year; and has expanded its revenue per 1,000 square feet of factory space by 350%.

MN

Find out more about Lean Manufacturing