LIT: Lean Implementation Team

I have spent the last year and a half as a founding member of the Morey Lean Implementation Team, or LIT. The charter for this team was to gather a group of mid-level key performers from multiple disciplines, educate them in Lean and where the company is headed, and then utilizes them to help spread lean concepts throughout the company.

Over the last year, we have gone from starting on one focus, 5S, to branching out into multiple directions that we review in quarterly segments. We have focused to date on education, waste elimination, and standardization. We have finished creating a curriculum to launch to the whole company and have already logged a good amount of efficiency improvements and cost savings in 2010. Having people from multiple departments and disciplines allows us to utilize everyone’s talents. Some are good teachers, others are good at leading an improvement team, and others are good the “marketing” of lean.

Like most lean implementations, we’ve had successes and failures, accomplishments and setbacks. While the team is bought in to where we are going with lean, that doesn’t necessarily mean that everyone else is bought in. We can’t discount that there are people that are excited and want to know more, but at the same time, there are people that are afraid of the unknown and prefer to keep their heads in the sand. Our job is to show the value. Show it in data, show it in dollars, and show it in saved time. No one is going to be against making their lives easier.

We’ve learned that, in showing the value of lean, we need to take on a servant role and really help people through things, if not do it for them. This is not an implementation that lends itself to firing off tasks at subordinates and expecting them to figure it out. It involves a “go and see” mentality, a lot of “extra credit” work, and an amount of patience that normally is not reflected in today’s hectic environment.

We just had our meeting to discuss our goals for the next quarter and I’m very excited about the direction we’re going. We’re chasing standardized work, “leaning” of three major processes, a large dollar amount worth of savings, and education of one-third of our office staff through our complete Lean curriculum. Slowly but surely we are making progress to a wholly lean company. Sometimes not as fast as we’d like, but we’ll continue to serve on this team until we get there.

David Seifrid is currently Director of Strategic Accounts at The Morey Corporation.

Seeing the Waste — In Your Face (Part 2)

Last time I mentioned “Waiting” as the key non-value added waste in most office environments.   If waiting drives you crazy, try thinking about how many people your process has to go through.  It’s amazing, really.  Pick anything from your company – an order from a customer, a purchase order to a vendor, a drawing or design of a new product, a new specification for software, etc – and follow it through your company and see how many people touch that piece of information, along with how long it sits waiting.

Ask yourself, “What is the end goal here?” and “Why is this person touching it?”  You may be surprised at the results.

We have found that companies continually add layers of process, and by default, waiting time to processes as they have evolved over the years.  Usually, this was to band-aid some sort of error that had happened previously, rather than to follow a lean, continuous improvement philosophy of finding the root cause and fixing the problem.  What most companies find is that one time something went wrong – Let’s say, the wrong revision print went out to a vendor.  Instead of identifying how a wrong revision print went out (was it training?  Was it a system issue?), the response commonly seen is to take away the responsibility of getting the prints from whomever is sending prints to vendors and telling them they need to get the prints from someone “authorized” to know if the print is the current revision.  Layering #1 – You’ve just added 1 person and what has turned out to be a 24 hour addition to what had been a 5 minute process.

All seems fixed right?  But now, because you’ve added 24 hours to your process (your “authorized” person has their own queue’s to work through), you’ve now delayed information coming back from a vendor by 24 hours.  Now, you’re potentially affecting your need to place an order for material or potentially affecting feedback to an important customer who needs to get a sales price from you so that they can give you an order.

So now, we’ve constrained another part of our business because we’ve delayed a process.  How do we get around it?  Well, hire more people!  In the scenario above, let’s hire someone who has responsibility to verify and turn around drawing requests in one hour.  That will solve the issue – for awhile.  Then what happens when the problem occurs again?  Now, you realize that your authorized person did everything correctly and in actuality, you maybe have a system issue or a revision control issue.  How do you respond?  Another layer of control?  Or finally dig into the “why” of the situation, identify how many people are touching the situation, and identify opportunity for failure?

David Seifrid is currently the Director of Strategic Accounts at The Morey Corp.

What’s In It For Me? Top 5 Benefits of Lean

As we move on our lean journey, I find myself often putting myself in the customer’s shoes, asking, “If I were the customer, what’s in it for me?” Truly, our lean journey is to make us a better supplier to our customers. To eliminate what causes you pain. To completely change a culture that focuses too much on functional accomplishments and not enough on whether we actually have a customer who is satisfied with our cost, quality and delivery. Following are what I believe to be the top five benefits of Lean. This isn’t to say that we are there yet, but this will give you an idea of where we are headed.

1. Delivery. The biggest pain for anyone, whether it’s in the manufacturing world, consumer world or any other world can be getting what you want, when you want it In the economic times we are in, companies can’t afford to have delays to their customers.

A lot of us came out of 2009 clutching to the orders we had like gold, hoping that any new orders would signal some sort of blip on the radar as to a possible market recovery. Post 2009, we started to see an upturn in orders from our customers only to be faced with the fact that most of the rest of the world did not plan for this or took the “wait and see” approach. After months of trying to keep lines running with limited builds, now we were faced with the opposite – we cannot build because the parts needed are delayed. Now my customer cannot make their sale, I cannot make my sale, and my vendor cannot make his sale. Ultimately, we’ll be lucky if no one cancels their order. What we are learning through lean is how to take customer demand and attach it to our production line – giving the customer what they need when they need it. We are taking the waste out of waiting and creating a quicker order delivery cycle by focusing on what the customer actually needs instead of items like “To get my throughput numbers, I need to build 500 of these, before I can run the next job (that the customer actually needs)”. Nothing is more pleasing to me than when I’m on the phone with a customer who admits they have just received an order they didn’t plan for and feeling the sense of relief when I can tell them that we can quickly alter our production schedule to accommodate their needs. Are there extra costs? Sometimes there are. Morey is creating a premium fast service to help in these times where we can respond within days. We know that at the end of the day our customers need to have delivery of product in the quantity they need at the time they need it.

2. Quality. Shortly behind delivery is quality. Quality is something that has always been there, however through Lean, we are becoming a more highly critical, self improving organization. Just a couple years ago, it was common to see the approach of “if there’s something wrong, just put it to the side and keep going”. We’ve learned through study of Toyota and the subsequent downfall of GM just how much money and time goes into fixing piles of “bad product” to make it good enough to ship. We’ve implemented an “andon system” similar to Toyota’s and gave the people on the floor the power to stop the line if they saw a problem. This was something they used to fear getting fired for, so it took a little work to get them to truly believe that it was something we wanted them to do. On one particular product, we didn’t get a unit finished for three days due to line shutdowns, orders were in danger of being late, and people were screaming at each other to forget the “lean stuff” and go back to the old way of manufacturing in order to keep shipments moving out the door. Rather than give in and go back to building the old way and putting problems off to the side, we kept the line shut down until the problems were fixed forever. Now this product is one of our highest quality products and due to far fewer problems, we have also experienced an increase in capacity and ultimately, savings.

3. Lead times. Similar to delivery, one of the most painful conversations in any customer service environment is the dreaded lead-time conversation. I hate giving the “standard lead-time is 14-16 weeks” talk almost as much as I hate hearing it from suppliers. What have we done with lead-times? Have we managed to put in a buffer safeguard at every level to insure the no one is late for anything? Only then to be able to pat ourselves on the back for meeting our “promised delivery date” while our customer walks away upset that they had to wait so long? Or do we counter this by purchasing large amounts of inventory to have on the shelf for when we need it? Lean helps us to clear out these layers of “fluff” to increase cycle times and speed up manufacturing. How can a customer know exactly how many units they will need 16 weeks from now? Of course it’s going to change! I don’t know now how much gas I’ll have to put in my car during the week of May 17! Lean poses the question of “how can we work with our customers and vendors to keep inventory low, but always be ready to support the needs of the customer with minimal lead time?”

In manufacturing, there will always be a build time, per se, but while working on efficiency and throughput improvements internally, it does nothing for the customer if we have to wait 16 weeks for a part to arrive before we can start building. In working with our vendors, we can create a material “store” scenario where, much like a supermarket, we can go to the store, get the parts we need, have the vendor refill the parts based on what we use and what we see coming, and then they turn around and do the same with their vendors. You don’t see a bread delivery driver at the store dropping off 1000 more loaves than the store needs on a given day and burying the store in something they may or may not sell. Instead, the driver is there on an ongoing basis, checking previous consumption, refilling the shelf, and working with the store on anticipated sales to determine how much to prepare in the coming days/weeks. Toyota used this concept 60+ years ago when they started manufacturing automobiles, because they could not afford to carry shelves of inventory or have a large amount of product sitting waiting for a buyer.

A lot more of our customers are moving to this type of concept in their demands from us. It is interesting to see world-class OEMs, after the struggles of the last year, coming to us and saying “We can no longer carry the inventory like we used to, we need to implement lean principles” and lo and behold, efforts we are working on internally are now tying into those of our customer base.

4. Cost-competitiveness. Of course one of the biggest benefits of lean is financial savings. By focusing on having the material needed to build what the customer wants and continually turning inventory, you are able to decrease the costs the company carries. When this happens, it is much easier to be cost competitive with other world-class manufacturers. What we have started to see is that by showing our ability to eliminate waste, and thereby lower expenses through lean, our customers start to notice that we can provide competitive pricing when stacking up against any other world-class manufacturer. Now, once price is taken out of the picture, it is easier for our customers to stack up the logistical advantages of working with a company in the United States.

5. Customer Driven Mentality. Rounding out the top five benefits of lean is what I feel the most important benefit of lean. The requires a cultural shift to a complete customer focused mentality where all members of an entire organization not only know how their role affects the customer, but thinks first of the customer and what effects we have on them. Most of us are used to companies where people know their job, and that’s about it. They don’t know how their success/failure affects the customer and sometimes, don’t even know how their success/failure affects their own company!

I’ve learned a lot from Toyota over the last year and recommend the book, The Toyota Way by Jeffrey Liker. The customer-driven mentality has caused Toyota over the years to do things that from a business perspective would have most companies screaming “Are you out of your minds!” but in the end, cemented their relationships with their customers. Even as I write this, Toyota is shutting down sales and manufacture of eight models until they understand a quality issue relative to gas pedals sticking. How many companies would risk and take the hit from a financial side in order to cement their reputation with their customer base?

This is the mentality that we are working to adopt at The Morey Corp. – Always, Always, find a way to make every customer happy.

David Seifrid is director of strategic accounts at The Morey Corporation.

Lean Into It

Our first foray into Lean was to organize through implementation of 5S (Sort, Simplify, Shine, Standardize, and Sustain). While it was initially tricky to get everyone used to the idea that a 5S’d area is a happy area, people started seeing immediate benefits both in production and our offices. When a workspace on the production line has all the tools needed in a sorted and standardized location on that line, people quickly noticed how much smoother the line moved when people aren’t searching for tools. We were no longer spending time looking for tools or parts. Efficiency started increasing and quality improved as a by-product.

Then, the next logical step was to start “leaning” out certain production lines and shutting down the line at the hint of any problem. While shutting down the line would have been taboo in the past, we adopted a “fix it fast and forever” mentality. Gone were the days of “It’s a known problem that we fix at such and such operation.” Our focus shifted to quality, quality, and quality. If the line is shut down for a problem, it can’t start back up until the problem is fixed – however painful. In that first few weeks of the lean lines we piloted, so many issues were fixed that had been issues for years (some even unknown for years), that we saw immediate improvements in quality numbers for assemblies built on the lean lines. The actual benefit then realized was, although shutting down the line to fix problems causes immediate tension, we not only save on doing rework on parts that would have been put to the side until later, but the overall savings of eliminating quality rejects that cost both us and our customers money (as anyone who follows the costs associated with rejecting a part on a production line and returning it to a vendor knows) is ever-increasing.  This will continue to benefit our customers as their products remain cost-competitive and reach world-class quality.

Moving forward, I’m even more excited to move all products to the lean mentality as it seems we’ve just gotten a taste of what is possible with this journey. We’re seeing it every day: Focus on quality: If your output is not good, shut the line down. Focus on waste – What is value added for my customer? Focus on savings – What improvements can I make that add efficiency and increase quality?

What we are seeing here is that although it’s a lot of work, we are seeing it as a fun challenge. Diligent problem-solving and relentless improvement have become part of our culture! What can I improve?  How much can I help the company with quality and costs? A simple improvement here can yield a savings for the company that lowers our next quote to the customer, and ultimately, wins us business that may have gone to a competitor.

We allow any employee to stop the line because we have faith in our employees’ ability to identify and solve problems. The look on an employee’s face when you praise them for shutting the line down and fixing a problem is priceless. All this poses a very bright future for The Morey Corporation.

David Seifrid is manager of Planning and Customer Support at The Morey Corporation.

Walks, Singles and Doubles

Over the past months, we’ve experienced a strange lesson learned and a word of caution to pass on.

We spent a lot of time working towards a high performance culture of continuous improvement. As part of this, we launched improvements using the “A3” format. In a nutshell, the A3 format states any improvement project should be done on an A3/11X17 pc of paper divided into 4 quadrants – business case, current state, future state, and actions needed to reach the future state.  If it’s too big for an A3 size paper, it’s too big to tackle as one improvement project.

When we started out, we focused on getting people to buy in to the concept of creating A3’s for any improvement, no matter how big or small the benefit. This proved to be a great launch because we got a lot of people to start improvements and focus on any improvement.  We were flooded with ideas.

Where we stumbled a little was that we started seeing so many improvements being launched that we were sucking up resources very quickly.  In response, we made a “vetting” process to make sure that the right improvements were being worked on first.  By “right”, I mean the ones with the biggest benefit to The Morey Corp. We thought this would be a good way to prioritize improvements so that we were not scattered all over the company trying to do too many improvements at once. The unexpected by-product of this was that the perspective of the employees changed to one of “you won’t get resources for any improvement you launch unless it means a big gain for the company”.  By default, the well of improvement ideas ran dry very quickly. Why spend time trying to promote and implement an improvement, if you don’t think you will get resources for it?

I don’t feel we were trying to push an agenda of “only big dollar improvements will be accepted,” but that is what happened.

Now, we are working to go back to where we were a year ago to re-promote the concept that we don’t want home runs. Walks, singles and doubles win ball games the vast majority of the time. We want small, incremental changes that decrease costs and eliminate waste and are setting up systems to accommodate these “quick wins.” These will always add up to more savings by the end of the year than one or two monster changes. It could be that five to seven small changes that fall under the same umbrella end up building to a huge savings at the end of the year.  If you were to try and not do five to seven small individual changes and instead one big change that covers them all, the chances are far less likely that you’d be finished and complete by the end of the year.

David Seifrid is manager of planning and customer support at The Morey Corp.

Value Streams

Earlier this year, we decided to divide up our company into “value streams.” A quick explanation of a value stream is to say “business unit.” Essentially, a separate line or section of the business that operates independently of other portions of the business, from the perspective of the products that run down that line.

Effectively, we are taking the standard vertical corporation structure and breaking down the walls to create a horizontal structure.  So, rather than having a Planning/Scheduling department, a Purchasing department, a Production department, etc., all working to their own metrics, we have a value stream responsible for the entire order to cash cycle of the products assigned to that value stream.  So, we have a value stream which consists of a full production line with team leaders and supervisors, a planner responsible for the planning of products on that value stream, a buyer responsible for making sure all parts are on order, a customer service rep responsible for making sure all orders are scheduled to ship accurately, and an overall Value Stream Manager responsible for the financial success of the value stream.

The benefit of this structure is the team members assigned to the value stream are learning to be responsible for the products on their value stream.  We now have a team of all different disciplines living, eating, and breathing the products on their value stream. Rather than focusing only on getting their specific job done, they now have a dual responsibility to make sure that their value stream is successful. This has started to foster a team mentality within The Morey Corp. where any issue in the value stream, from an order through the shipment, is responded to immediately by any member of the value stream team (often by many members of the value stream).  Really, what this is doing is bringing employees closer to what makes the company money and ties them closer to customer.

Sure, this change hasn’t occurred without its hiccups, but one of the benefits from this is that people like myself have such a far greater understanding of the operations side than we ever did before. Consequently, our production supervisors and manufacturing managers are now even closer to the effects on our overall business. It’s much more difficult to stomach a delay in production when you know the domino effect that this can cause in a lean environment.

It’s extremely interesting to see people who have never been involved with shipping product now understanding the entire order to cash cycle and how their problems or delays affect the entire flow of the value stream. It used to be, like traditional companies, that a lot of people did not know how their specific job helped the company make money. Through value streams, we have been able to tie people directly to shipping units to our customers.

David Seifrid is currently the Manager of Planning and Customer Support at The Morey Corp.

Office Andons (‘We’ve Always Done It This Way …’)

Previously, I talked about the role of the andon as a function of “Quality at the source.” We use andons on our manufacturing lines to alert the company to any problems, essentially raising a signal and stopping the production lines.

Stopping of production lines is a quick way to raise a lot of attention when you have shipping dollars waiting every day for product coming off that line and any delay has an effect on shippable dollars and inventory expenses, not to mention throughput dollars.

But what happens when there’s a problem in an office environment? Wait. Literally. Maybe place a call to someone and wait for a response. Maybe an email. Maybe stop by someone’s desk and see if they’re around. In the meantime, we wait.

It seems so easy for people to accept andons in a manufacturing environment and to understand that when a line stops, a lot of tension is created. In the office, as we have discovered, it’s not always so easy. We tend to view waiting for a problem to be solved as just something we’ve always done.

At Morey, we implemented andons in the office to immediately call attention to situations in a department that would stop a person from doing their work. In Customer Service, it may be an issue that doesn’t allow an order to ship, or even be entered. In the Planning department, it may be a delay on the line that is requiring an adjustment to the build schedule, or a component shortage that has shut down a line and is impacting a build/ship schedule. In our Materials group, it may be a delay in getting a part on order that will eventually impact a build, and by default, a future shipment.

We follow the andon process the same that it would be followed on the floor by having a help chain and an escalation pattern. We have used this to identify gaps in our systems that seemingly have always been there. This definitely has been a challenge for us as we are uncovering age-old issues that have always been overcome. The biggest challenge has been to convince people to NOT overcome them, but to raise the andon so we can identify it and fix it forever.

If you try this at your company, be prepared for a potential landslide of opportunities. Remember, this is a good thing. But just exposing them is the first part. Now, let’s fix them forever. The gains will surprise you.

David Seifrid is manager of planning and customer support at The Morey Corporation.

Seeing the Waste – In Your Face

One of the coolest things of this Lean journey is the ability to better discern waste in everyday processes.  Everyone wants to eliminate waste in manufacturing.  It’s the easiest place to do it.  That’s where everything is visible and tangible.  We’ve got guys working like crazy to get 30 seconds out of a test operation to increase the throughput of units on the floor, but you know what?   Everywhere you go, the manufacturing floor will be the most efficient running operation compared to every other operation and process in that entire company.

Once I started thinking about this concept, I started to realize that while waste may be visible on the production floor (a product not moving, a stopped line, WIP), it’s just as prevalent in the office environment if you know what to look for.  If you follow a customer order for a product as it comes in the door to the time it leaves, just a fraction of that order’s life is actually spent on the production floor.  Now, think about all the time that order, in some form or another, spends sitting somewhere, waiting.

“Waiting” is the key non-value added waste in an office environment.  We see it in our every day lives – Waiting in line for the printer/fax, waiting for the drawings, waiting for approval, waiting for material.  How many office operations do you see where someone waits for a stack of orders/tickets/emails/requests to pile up before attending to them?  In essence, we have to build systems and lead-times around our waiting. What to do?  What we are doing in our office environment is to assess all the processes with the people actually performing the work.  Identify the waste in processes in every department – What is the time impact daily, weekly, or monthly?  Continue to ask the question “Why?”  Guaranteed, you will probably get to a phrase similar to “That’s how we’ve always done it” Typically, companies overload themselves so much with manual processes and waiting, that when business picks up, you have to hire new people just to continue to move all the extra waiting “waste” that piles up.

Look for the low hanging fruit.  Like baseball, focus on the singles and walks and not on the home runs.  We realized a quick savings when we looked at our shipping process and realized that a manually controlled shipping check requiring three departments input was slowing down shipping on a daily basis.  When we dug deeper, we identified that three departments were accommodating what was already a capability in our corporate computer system.  Once implemented, we freed up enough office time in three departments to equal about $25,000 in one year.  This was merely one quick waste elimination of a process that we had been doing for at least 10 years, but it immediately wetted the appetite for more!

David Seifrid is manager of planning and customer Support at The Morey Corp.

Factory Simulation

We’ve just started to have training exercises with members of our different departments to simulate a lean facility versus a traditional manufacturing facility.  The results have not only been eye-opening, but have really helped people understand the benefit of moving to lean.

Essentially, we have pulled people together in a mini simulation where they have to build towers out of plastic blocks.  The first mode they go through is to set up a receiving line where they follow the current batch build process.  They are given “builds”, kits of material to build sub-assemblies similar to traditional manufacturers and then, when the “subs” are completed, they can build them into the towers.  All this is given through the standard manufacturing process of gathering parts from a stockroom and bringing them to a mock production area.  At the end of 30 minutes, we identify how much money they have made by looking at the amount of towers built and “shipped” vs. the remaining in process material, vs. the amount of “labor” that they put into it, and finally the cost of bad quality.  The results are always discouraging.

We then allow them to make whatever changes they want.  This usually leads to the traditional manufacturing approach of throwing more people at whatever operation(s) seemed to be lacking.  This usually results in hilarious consequences because rather than quieting, the chaos continues to rise.

Finally we re-set their line in a lean, one piece flow operation, and allow them to work off material stores.  I don’t want to spoil it, but there are noticeable differences in this method that extend beyond the money.  You don’t realize how draining it is on people when they can’t work because they are waiting and how this waiting leads to other problems, including human interaction issues.

David Seifrid