Partnering with your competition – A Lean thought

Lean ideas come from various people. Most of the times those people are not known for their lean manufacturing capabilities. I found one such idea from an online video when some manufacturers demonstrated their processes. So I thought of sharing that with you.

You have competition because there are other people doing the same or similar business in the market. Isn’t it? When you have competition this means your competitor needs almost identical raw materials and machinery and processes to carryout manufacturing. So you and your competition both have a set of common requirements. How you fulfill them. I am sure you will be talking to the suppliers and to your customers separately. This makes perfect business sense. But how about partnering with your competition in fulfilling your requirements? Sounds shocking? It will be, in a traditional business context. But in lean manufacturing suppliers and customers are always treated as partners. I am simply asking the question why shouldn’t we apply the same to the competition as well. We of cause will have to think little deep from a business sense in this. But there are endless possibilities, both you and your competitors can benefit as a result your customers will benefit. Let’s look at an example.

If you are in the business of assembling bicycles, you will need gear wheels. Your competitor also will need them. You might be buying them form a supplier who is located in China and your competitors will also buying from him. When you place your orders separately, supplier will take order by order, finish them and ship to you individually. Each one of you have lower bargaining power with the supplier, and you also will loose money on freight. Doesn’t it make sense to combine both orders and send a single order to your supplier (I understand there are some legal aspects you have to cover before you do this). Supplier will get more clarity regarding the order and from the suppliers point of view you will not be competing for his capacity. Sound great isn’t it?

Think about it. If you do you will discover endless possibilities to eliminate waste from this world.

Implementing Lean manufacturing in our Organization – Part 3

This is the Part 3 of this series. If you have not read the Part 1 and Part 2 please read by clicking the links

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5) Bottleneck Management
To ensure the bottleneck process (define as any part of the enterprise that limits the throughput of the whole process) is not being affected by other variables, Bottleneck management process is crucial – this is done by ensuring continuous supply of materials, availability of skilled people, reliable machine and methods to ensure high machine uptime.

6) Small strategic buffers or Chokotei (see Figure 7) are placed at bottleneck processes, to maintain a steady flow throughout the process. These buffers cater for short but frequent interruptions such as machine jam, model changeover, material replenishment, protect bottleneck process etc. With this strategic buffer put in place, our system uptime increases.

Buffers between work stationsSmall buffer to ensure downstream process continue production when upstream process changes model.
Buffers to help smooth operation
7) Standardized work
Along with all the above initiatives, there is a need to develop Standardized work for all the processes including model changeover, part replenishment, equipment maintenance etc. Performing to standard work allows clear and visible operation. Any deviation from standard work would immediately surface abnormality. This will create an opportunity for improvements. Problems need to be resolved immediately using the 5 Whys or DMAIC techniques. The PDCA approach is adopted to ensure problem does not recur after countermeasure is taken.

8) Frequent Changeover through SMED
The daily planned schedule is to run every part, every day in small lot sizes. To do this, there must be available time leftover within a day after meeting customer demand. Figure 7 shows how to compute number of changeover allowable. The shorter the changeover time, the more changeovers can be done.

Lean SMED calculation
Small lot size run is made possible by frequent model changeover. The SMED technique (see Figure 8 & 9) is used to reduce set up time so that the manufacturing system is flexible and can quickly response to any sudden customer change. SMED (single minute exchange of die) together with quick changeover features incorporate into machine, tool and fixtures help to achieve our changeover target to less than one minute

5S-Quickly find tools
Change over time reduction with lean manufacturing and SMED
9) Financial Impact and Results
Through a concerted team effort and with the implementation of the lean concepts, the organization has been able to exceed the original goal set. The daily volume increases by 50% from 18,000 to 27,000 within a month. There was a tremendous annual cost saving of US$600K and further cost avoidance cost saving (overtime) of at least US$200K.
Lean manufacturing results

Implementing Lean manufacturing in our Organization – Part 2

2) Level Production or Heijunka
Prior to kaizen, production schedule was based on big lot size or batch of a particular model. This is because of the long changeover time; hence loss time is incurred whenever there is a model change.

After kaizen, production schedule issued to manufacturing is leveled (see Figure 2) Daily and fixed for a period of 4 weeks to optimize the 3M resources, namely Man, machine and materials. Daily scheduled plan will run every part every day, in small lot size. Any volume fluctuation from customer is managed by Finished Good Buffer which is adjusted regularly.

Lean manufacturing - Heijunka
Daily monitoring of schedule attainment to prevent overproduction and at the same time ensure all losses are catch up within the same day. By incorporating real time visual management . Control (see Figure 3), we are able to quickly surface and resolve any abnormality.

Lean manufacturing - Visual management
4) Increase output to Meet Customer Takt time
To reach the desired output, we need to develop the waterfall chart (see Figure5), which indicates all the processes not meeting the customer takt time. Once identified, there is a need to improve process cycle time starting with all those processes not meeting customer takt time, in this case about 10 out of the 23 processes
Cycle time reductionThe team started exploring all opportunities to improve machine cycle time through Motion kaizen concept (see Figure 6.1 to 6.3) This refers to the elimination of muda motions through proper part presentation, shorten travel distance, optimize speed, elimination of duplicate test/processing/inspection etc. For machine processes, separate value and non value added motions, eliminate non value added movements. This can only be achieved by going to the Gemba and acquiring the ability of “Eye for Waste”.

Lean motion Kaizen

Optimization of work

Reduction of non value added activities

Read Part 3 of this series