Page 56 - How To Implement Lean Manufacturing

Lean Manufacturing and the Toyota Pr oduction System 37

pharmaceuticals to name a few. My background was in petroleum refining and we
were able to make almost total applicability of the earlier mentioned principles, with
one major exception: destroying the batch. We were able to see and work at waste
reduction, we were able to produce to takt, create flow, and use pull systems. There was
one large problem with refining: The unit you deal with is the batch. And the batch is
sometimes, out of necessity, large. Other times, it was possible to reduce the batch
dramatically with resultant improvements in lead time. As you might expect, this batch
reduction could translate into improvement in those two wonderful business weapons:
flexibility and responsiveness. In most cases, reduction of batch size could be easily
done. However, because the history of the petroleum business is to make batches, that
paradigm was very hard to change. The momentum was very much against batch size
reduction. Another factor in these businesses that must be understood is the continuous
process industries, such as refining and chemicals, where the capital investment per
employee is much larger. For example, in refining, it is not uncommon to have $4,000,000
of capital investment per employee. By contrast, many of my current clients who are
typically tier 1 automobile suppliers, have $3000 to $50,000 of capital investment per
employee. This high capital investment will cause those businesses to view their wastes
somewhat differently.

Lean Applicability, Unstable Demands
The next largest negative effect that makes the operational techniques of Lean less
applicable is unstable customer demand. When you compare the three-year contractual
demand that most tier 1 automobile suppliers are blessed with to the come-and-go
demand that many job shops face, it is easy to visualize that this is a huge obstacle to
implementation of Lean principles. For example, there is no takt to calculate, so
synchronizing with the customer is difficult, and since the life of a job is often very
short, continuous improvement requires a completely different philosophy. However, it
is still possible to create a pseudo-takt to use in synchronized supply with the customer
and synchronized production flow. Often flow can still be balanced and, most impor-
tantly, the flow velocity can be accelerated by reducing the batch size. In the typical job
shop, lot size reduction is a powerful tool (see the Story of Excalibur Manufacturing in
Chap. 5 and the Story of the Bravo line in Chap. 15, for specific examples). To keep lead
times reasonable, quick changeover (or in Leanspeak, Single Minute Exchange of Dies,
[SMED]) technology must be very strong in this type of business. In most job shop
applications, to create a “flow” for each job is not too difficult, and all the basic principles
of Lean apply.
The complexity is borne in the concept that lots of products, or jobs, exist. These
jobs have different routings with variant cycle times and complex interactions of
people and machinery. Yet examples of businesses that have made huge improvements
by applying the principles of Lean abound. Two principles that seem to repeat time
and again are the use of SMED technologies to reduce setup times, and the use of small
batch sizes to reduce lead times. The efforts in job shops to reduce lead times pay triple
dividends.
• First, with short first piece lead times, rework is reduced dramatically. This is an
extremely powerful quality weapon that should not be overlooked by these
businesses.