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How to really implement lean, Part 1: Forget the Cliff's Notes

Recently I was asked to give a seminar at a company that I was told was heavily into lean. I was excited at the prospect because we wouldn't have to cover the basics of molding and could jump right into the stuff that makes profit.

I started off with a slide that asked "What are the four goals of lean?" thinking some bright spark would immediately show off in front of the class. What I got instead was the proverbial thousand-yard stare from the entire class. They'd heard the word, used it in every PowerPoint presentation, but sadly didn't have a clue about what it actually was. Nobody ever took the time to research it.

The problem here is the ever-present dichotomy between line-the folks who actually do the work-and staff, usually meaning management who think they know more about production than the line folks. It starts out with staff reading an article, or perhaps going to an executive conference given by some self-inflated consultant, where they are harangued for a day or two on the virtues of this new management philosophy.

If the consultant is good, he not only makes a pile of cash from the attendees but also has them locked in as paying clients for the long haul. When viewed with a critical eye, the seminar told of the benefits of a new program but was polite enough not to give the attendees a how-to lecture or book to put this new system in place (otherwise known as The Consultant's Full Employment Act).

When confronted with the 1000-page texts, myriads of computer programs (all of which must be vetted and are incompatible with your company's computer system), and techno-babble complete with buzzwords in a foreign language, staff opts out. They settle for the Cliff's Notes abbreviated version: Lean for Dummies or some such. In corporate-speak this is politely called the "executive summary" (the "don't bother management with the details because they won't understand them" version). While lean almost mandates management participation, our wonderful capitalist system usually chooses blissful ignorance and follows management-as-usual as the preferred technique.

Tolerating and perpetuating waste is a heavy responsibility that staff has a difficult time owning up to. Unfortunately, eliminating waste is a fundamental of lean. The "way we always did it" in many cases isn't the most profitable. This starts by redefining the corporate mission based on productivity (and this is my personal mission statement): "All blessings flow from the shipping dock. The only job is to put customer-acceptable, low-cost parts on the shipping dock on time or help someone who is doing that. There is no other job description in the company." If you accept this definition, staff work changes to providing tools, training, financing, and anything else that assists line personnel in fulfilling the mission.

Cost shifting

Lean is about cost savings but insists it be viewed as a "big picture." Any change you make should be a global improvement and not something done that enhances one department but degrades another. Example: "We went offshore because the parts were cheap. If there's a reject or a change in schedule, we airfreight the replacement parts because keeping the lines up is cheaper than a shut down." Since incoming freight and the cost of expediters are someone else's budget, it is less expensive (for this department) to have poorly performing vendors than paying a slightly higher price for reliable ones-"I look good, the others don't."

The offshore supplier visitation trip is another bastardization of lean. You get the mold produced offshore because it's less expensive. The engineer then travels to the supplier several times ($4000-plus per trip) to inspect tool construction when he could have done it with a computer video camera and a Skype teleconference from his desk. Since the travel budget is never assigned to the tool cost, someone else gets to eat the expense, the engineer racks up extra bonus miles, does some offshore shopping, and literally takes a vacation on the corporate tab.

Even worse is the management vendor evaluation trip, where managers do the vendor junket trips in the name of cost savings.

Kingdom building
Lean abhors false economy. Part of false economy is the ratio of staff to line personnel who actually make the products that bring in the money. In some organizations this overburdening of bureaucracy inflates executive bonuses while deflating productivity.

Lean listens. The folks on the floor can probably tell you more about profit improvement than the accountants can. While having the workers actually make cost-improvement decisions is almost a blasphemy in our capitalist thinking, it works. Staff adapts this idea by employee suggestion programs. Unfortunately, many good ideas are simply ignored.

Lean believes in pay for performance, not pay for the best PowerPoint presentation. Lean worked in Japan because there is a mentality of pride in workmanship, contributing to the company, and being rewarded for your efforts. It does not pay for seniority, you don't get an award for perfect attendance, nor should you be rewarded solely for being a "team player." Implementing lean in our culture requires a completely different way of thinking, which means you can't "adapt" lean into the old management system.

Lean is as simple or as complex as you'd like it to be. But boiled down to its essence, it's all about profit, when viewed from the bottom line, or it's all about not making your customer pay for your mistakes, when viewed internally. It's not about Japanese buzzwords, snazzy looking charts and graphs, or anything else. But kingdoms of bureaucracy have been built and are sustained upon the constant quest for quality, kaizen teams, or counting how many 6-Sigma Black Belts you have on the payroll. Many of these company kingdoms don't justify themselves as contributors to improved profits, yet they'll preach gloom and doom if their positions are eliminated. So much for office politics.

Improving quality
Management easily understands the concept of "improve quality." To them it means tighten the specifications. This has spawned the silliness of process capability (CpK), Total Quality Management, Statistical Process Control, part per million defectives, and so on. While these philosophies are excellent in highly variable processes, injection molding has fixed tooling, fixed materials, and, once verified, robust machines and processes.

This philosophy originated to see if the machine producing the part had a tighter operating tolerance than the part's requirement. Somehow it became convoluted in the plastics industry. With a consistent process, you'll get a consistent dimension. Imposing a CpK over an already-close tolerance of the part will invariably result in acceptable parts that have an unacceptable CpK. What do the designers (line) do? They simply ignore it: The parts are within print tolerance but are statistically noncompliant.

Lean v. SMED
When confronted with the simple mathematics of keeping inventory low, even a manager can see that long, expensive setups amortized into small runs raise the cost. Their solution is SMED-Single Minute Exchange of Dies. They wave their magic wands and declare SMED is what needs to be done. Since they never read the history of this, they are blissfully ignorant that SMED came from the stamping industry.

Stamping uses vertical presses. You close the press, unclamp the old stamping die, open the press, push it out of the way, put in the new stamping die, clamp it in, and voilá; you're ready to slap in a new chunk of sheet metal to bang out a different part. If your part is hot forged, we simply ignore that there might be a custom induction heater necessary to heat the parts.

Staff views SMED as the time it takes to change a die. The line folks are happy to report on quick-change systems and the speed of tooling changes. They, too, only read the Cliff's Notes. SMED is actually defined as the time from stopping the previous production run to production of acceptable parts in the new production run. In injection molding, SMED comes in conflict with physics and practicality.

With a new material, the machine must be cleaned out. There is a time element for purging the old material and getting the new material to the proper heat settings. Material must be dry; staff, at considerable expense, solves this problem with portable hoppers, dryers, and mini hoppers for the machines. However, it presents logistical problems of having enough of this portable equipment to satisfy all the machine needs for various materials.

I have had some hilariously frustrating conversations with folks who will spend an hour pushing virgin material through an injection unit to clean out a barrel, when they could have used purging compound and cleaned the barrel in 10 minutes, consuming three times the machine's injection capacity. The overall cost of a material changeover is cheaper using purging compound than making puddles of molten material on the floor. But management only sees the high price of purging compound and not the money it saves.

Another lean breaker: While an excellent time saver, the line people have major safety issues with hanging a mold whose hot runner system already has been brought up to heat. Not too many techs look forward to handling a large mold hot enough to burn flesh. The solution is to hang the mold cold, then turn on the heaters taking credit for the fast change but ignoring the startup time. The mold was hung in SMED time, but production started about 45 minutes later.

Lean is not the flavor-of-the-month management philosophy. It is based on sound, reliable, time-proven principles. The client I mentioned at the beginning of the article was fiercely proud of its "lean-ness." They smashed the square peg of lean into the round hole of their management style. Folks on the top were proud of producing a product with a 90% yield in molded products (read: 10% rejects, not including in-house scrap!). Folks on the bottom of the food chain were very proud of the high-quality (high-priced) product (regardless of the rejects) and their ability to hang a mold (on a daily basis) in 45 minutes, and run for an hour. Only a few could understand their competition was producing 99.9x% yields and it was only a matter of time until the axe would fall.

This is the first of three articles on lean. Installment #2 will discuss the concept of lean and quality. Installment #3 will discuss lean and JIT. Consultant Bill Tobin [email protected] is a regular contributor to IMM. You can sign up for his e-newsletter at www.wjtassociates.com.

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