Lean Thinking in Lean Times

There is no question that the manufacturing sector has been hit hard by the current economic downturn, but an air of measured optimism permeates the mood in 2010. As manufacturers reflect this optimism, is this the right time to consider changes in the way their factories and distribution centers (DCs) operate and invest in capital improvements?

Jim Tompkins, CEO of supply chain consulting firm Tompkins Associates, would answer unequivocally, yes. Tompkins says, “In my 35 years of business, I have never dealt with as many challenges as I have in the last 18 months. Challenges equate to excitement and change. I truly believe that now is a time when we can make historic changes to the global supply chain.” He adds, “However, in order to make changes in the global supply chain, leadership must engage their own management team, IT experts, plant engineers and maintenance people to modify their internal supply chain.”

Tompkins likens industry movers and shakers to the leaders in the Tour de France. The classic bike race meanders approximately 2,200 miles through France and neighboring countries. Cycling for about 21 days, riders encounter challenging weather, mud, Alps and flat tires. The best climbers usually win. And, so it is with industry chieftains. They must navigate the difficult times and, metaphorically speaking, climb the mountains.

With an eye to the bottom line, many manufacturers think first of cutting costs by slashing shifts, reducing inventory and delaying buys. Larry Tyler, co-founder and principal of K-Tec, a manufacturer of lean material flow systems, encourages management to place material handling at the top of the list. Typically, the movement of material throughout the plant or DC is the last lean frontier to get attention and, more importantly, allocated investment dollars.

Tyler says, “It is essential to evaluate current material flow, design a lean flow plan and invest in the factory infrastructure changes to accommodate present and future volume.”

When we talk about lean material flow, we are talking about eliminating waste and freeing up resources by analyzing how materials move on the factory floor. Efficiently moving parts and inventory within plants and DCs offers an opportunity for cost reduction by speeding up production, freeing employees to move on to other work, saving energy and eliminating material waste.

R.W. Beckett Goes Lean
In reality, few companies approach lean conversion in a systematic way. They usually identify a bottleneck, put together a kaizen event and put out a fire. However, R.W. Beckett, an Ohiobased manufacturer of oil burners for residential and commercial heating applications, implemented a well planned lean approach to manufacturing that included material handling to improve efficiency and profitability.

Beckett managers found the company was not making optimal use of the space in its 165,000-square foot plant. The factory floor was cluttered with wire containers filled with parts. Storage had become a challenge. Logistically, there were problems getting parts from the receiving area to the assembly line. Managers felt production could be streamlined and increased.

To remedy the situation, the company shifted from a traditional, straight assembly line to a cellular model, with approximately five workers all facing the center of the cell. Unfortunately, there were problems with this setup because whenever parts were delivered, workers had to turn around to unload them. The company’s lean managers quickly realized this could cause ergonomic problems as a result of all the reaching, turning and bending involved. Also, there were too many handoffs, causing worker downtime.

With these problems in mind, Beckett reconfigured the factory floor to accommodate a series of U-shaped work cells, setting up material “supermarkets” in the cells’ receiving areas, thereby changing the way materials were delivered to the floor. As part of the new arrangement, Beckett integrated a number of delivery carts that ultimately proved integral to the company’s improved workflow system.

Carts pulled in a train by a tugger now skirt the perimeter of the work cells. An operator loads each cart in the parts supermarket, tugs three or more carts loaded with bins organized by cell number, drops the bins in designated chutes on a mobile cart and moves to the next cell. Shelves are clearly marked with the cell number. Carts allow for easy changeovers.