Keep It Lean

Keep It Lean

by Sean Roth | Real Estate Editor

Donald Borden, Jr. is a Lean convert. Borden oozes enthusiasm for the Lean methodology of production, pointing to organized work areas and large wood boards filled with reports charting every assembly process at Crane Environmental.

But ultimately, the physical trappings of the Lean process at Crane don't provide the wow factor. The numbers do. The Venice manufacturing facility's performance improvements the past 18 months, since Borden took over as president, would catch any CEO's attention.

Quality figures for the facility's water-purification products have improved from 69% to 97.7%. The lead-time it took to create a single product declined from 19.9 days in January 2005 to 12.3 days last month. Then there's the big number - $1 million. That's how much the factory was able to save on inventory costs.

Crane's improvements are not unique. Other Gulf Coast companies, including aviation-equipment maker Eaton Aerospace and insulated-drink ware manufacturer Tervis Tumbler, have accomplished similar efficiencies using the Lean system or a modified form of the efficiency-focused model.

Although several companies in the area have been using elements of Lean for years and even decades, a new batch of converts has emerged after the 2005 creation of a Lean Consortium by the Sarasota County Economic Development Corp.'s Specialty Manufacturing Cluster and the Sarasota Manatee Manufacturers Association.

Although elements of the Lean system are as old as automation, most of the Lean and just-in-time concepts stem from the work of industrial entrepreneurs in Japan following the end of World War II. It's based on the work of management leaders such as Henry Ford, Kaoru Ishikawa, Edwards Deming, and Joseph Juran. The company most inexorably linked with Lean production rules is Toyota Motor Corp., whose production line was developed by Taiichi Ohno in the early 1950s. Lean proponents point to Toyota's use and refinements to the Lean process as the reason for its success, particularly in comparison to its U.S. competitors.

Lean generally focuses on standardizing processes, sometimes down to the second and then working continually to improve the process. The concept, firmly connected to just-in-time production and delivery, also suggests methods companies can use to limit the amount of inventory used.

Craning to get ahead

Borden says Lean methodology has been part of the Crane operating system model since the late 1980s. But the former president hadn't applied the principles as stringently as Borden felt necessary.

At Crane, for example, the main production and operations are divided into separate cells. Every cell member is responsible for charting his projects based on the estimated time of completion, actual time and the problems that prevented him from completing the project on time. Cell members are also expected to point out any solutions to those problems. If there are problems that require immediate attention, management comes to them.

"My main job is to travel around and listen," Borden says. "The goal is to empower our employees, because they know the solutions better than I do."

Employees and management created the process procedure sheets set up at each stage of the company to train employees and standardize the process. Regular staff meetings, called Kaizen, are held, where employees are asked how they could accomplish a specific goal, such as increasing production.

Production is measured based on the number of people who touch a product and the actual physical flow of the material through the factory. Pathways employees should use to transport materials are marked with yellow paint. Employees are cross-trained in several areas so during any downtime in the production cycle those employees can work in another cell.

Crane Environmental also uses specialized carts for assembly that actually inhibit employees from making certain excess products.

"We know that we never have orders for more than eight of these [specific water purification devices] a day," Borden says. "Before our employees used to work ahead and create excess inventory that we would have to warehouse."

To further control inventory, Crane Environmental uses small removable blue buckets to separate out the individual assembly pieces (nuts, bolts, etc...) in each cell area. Once a bucket is empty, the cell removes it and another bucket of assembly pieces is located behind it. The empty bucket is then placed a few feet away for another staff member to retrieve.

"That gives us a visual clue (known in Lean terminology as a Kanban) that it's time to reorder," Borden says. "When we started there was six months of inventory here; we are down to probably a month. We want to get that down to a week."

Borden says to get the most out of using Lean, it needs to be used in every area of the company, not just manufacturing production. Sales and management chart their event-to-event performance, problems and hold Kaizens.

"There is no hiding problems," Borden says. "We are just a lot more educated to make a major impact. It allows us to set targets that are reasonable. This really just allows us to better use our existing intellectual capital."

Ergonomics and automation

Preston Mathis, plant manager for Eaton Aerospace's 336-person Sarasota manufacturing site, is having a similar experience.

Lean has been part of the Eaton Business System since around the late 1990s, but when Mathis became plant manager 18 months ago, he saw there was room to improve.

Mathis reemphasized Value Stream Mapping, which charts the entire operational and production process. He also reorganized the company according to Lean's 5S's, a process that seeks to reduce waste through re-arranging the work area.

Eaton Aerospace employs a team of industrial engineers whose job is focused on improving efficiency in every level of the company. They work in conjunction with employees and a computer-design production program.

"If they're trying to measure a benchmark audit, they can usually just do it through casual observation with a stop watch," Mathis says. "We pay particular attention to it from an ergonomics standpoint."

From those discussions, the company creates 8-by-10 scripts documenting the process, which typically include large pictures.

Tervis Tumbler, an Osprey-based drink ware manufacturer, is looking to improve its process too, especially after a period of heavy growth the past two years, which included moving to a new building. Although Andrew Grzybowski, vice president of operations, calls Lean more of a buzzword for existing efficiency rules, he says the principles it highlights do help.

"You basically have to look at what's happening both up and downstream," Grzybowski says. "

You've got to look at the total production flow. You're looking to squeeze as much as you can without hurting people and making sure your people stay happy. You have to eliminate touches. From an inventory standpoint you want to be making it to order. Lean is a fine name to call it, but it boils down to just being more efficient."

Grzybowski says in certain cases automation can make a big difference. Tervis Tumblers has purchased automated conveyers, and the company expects to recover that investment through waste savings and capacity improvements in about a year.

Like many other business improvement theories, such as Six Sigma or employee coaching, the Lean concept has spawned some consultants to help companies use the system correctly. John Clement, formerly of Lakewood Ranch-based Gemesis, has started his own Lean consulting business: Lean and Beyond in Bradenton.

"Where Lean is really different is that you have to think strategically rather than tactically," Clement says. "This is a long-term commitment. Some companies think they are always going to have a little bit of inefficiency; they get complacent. This really requires a cultural change. Companies need to stay committed."

IMPROVED PRODUCTIVITY

Here is a glimpse into how Lean helped two Gulf Coast-area companies:

Crane Environmental, Venice

January 2005 January 2006 January 2006

Actual Plan Actual

Inventory turns 1.6x 5.40x 5x

On-time delivery 96% 97.50% 95%

Lead time 12.5 days 12.3 days 19.9 days

Quality 69% 78% 97.70%

Eaton Aerospace, Sarasota

2004 2005

On-time delivery 63% 84%

Defective Parts Per Million 2,500 1,500

THE LANGUAGE OF LEAN

Lean methodology has some unique terms. Here are a few of the more important ones:

• Value Stream: The entirety of production necessary to create a product.

• One-piece Flow: An idea referring to the move of a product from one workstation to the next without allowing inventory to build up between steps.

• Takt Time: The rate at which a customer uses a product.

• Kanbans: A visual signal, typically a re-order card or container, that triggers an inventory order.

• The 5S's: Rules for organizing the workplace.

• Kaizen: Challenges for improvement.

• Inventory Turns: The number of times the value of inventory is turned over in a year.