Increasing use of technology, skilled workers bring the chance
RAVI KRISHNAN
Posted online: Monday, May 01, 2006 at 0119 hours IST
NEW DELHI, APRIL 30: The Indian auto component industry has witnessed a sharp increase not only in quality but also in productivity in the past few years. Revenues have risen by a compounded annual growth rate of 25%, outstripping the growth in employment which is at 5%. Consequently, productivity, as measured by revenue per employee, has increased from $22,500 in 2002-03 to $30,923 in 2005-06, according to data compiled by the Automotive Components Manufacturers Association (Acma). Lean manufacturing, Kaizen, total factor productivity - terms once confined to management textbooks - have suddenly become part of the discourse among the industry players, small and big players alike.
"This sharp increase in productivity is linked to increasing use of technology along with the best in class management techniques," says Amit Kalyani, executive director of Bharat Forge. Per employee turnover in Bharat Forge has risen from Rs 17 lakh in the fiscal 2002 to Rs 42.5 lakh in 2004-05.
"One of the key reasons for the increase in productivity is that manufacturing has moved from process-orientation to product-orientation," says Sona Koyo chairman and managing director Surinder Kapur. Other factors that have equally contributed to the rise in productivity include the gain in skills of workers and more balanced production lines (ie elimination of bottlenecks and so on).
However, India still lags behind the productivity of a country like Japan, where sales per worker is estimated at $50,000, nearly 70% more than that of India. "The increase in our productivity has not come from a huge increase in capital investment. Employees are still working the same number of hours. It's that we are using our capital assets better," explains Dr Kapur. While revenues for 139 auto ancillary companies, for which data is available with the research body CMIE, show a doubling of revenue in the period under review, gross fixed assets grew only by 73%.
By Agnes King
April 25, 2006
Dell Australia has slashed its time to supply PCs to business customers by nearly half and ripped $3 million from its costs as it positions itself as the top supplier.
The US-based PC maker has made 27 adjustments to its supply chain and production plants since February 2004. Some are small, such as arranging delivery when a PC arrives in the country and narrowing its delivery window to four hours.
Others are more complex, such as the online tool it developed that lets customers track their orders as they pass through the supply chain.
"We can counsel customers on what we have in stock and what we don't," says Dell managing director Joe Kremer.
He admits this level of exposure made some within the company jumpy but says the pay-off was significant.
"The number of customer care calls have nearly halved over a 12-month time frame," he says.
The project aims to lure more businesses - 80 per cent of Dell's customers - to buy online. It is a serious tilt at the top PC and server maker, Hewlett-Packard, whose CEO Mark Hurd last week said it was in the midst of a steady comeback (after a number of lacklustre years under Carly Fiorina).
Earlier this month, US shareholders credited Mr Hurd with the best result since the 1999 internet bubble burst. Profit margins in PCs almost doubled under his stewardship despite trimming margins in Australia to 0.8 per cent in the final quarter of last year to compete with Dell, says IDC research manager Michael Sager.
"While there was a decline for HP they did well in the consumer market and have added Synnex as a new distribution partner for its notebook range," Mr Sager says.
Dell sees sales to big organisations as its ticket to bumping HP from the top spot. Mr Kremer is confident Dell will make it if it "keeps doing what we're doing and be a little bit patient".
Owning its own factories gives Dell greater scope to make changes, says Mr Kremer.
With the cost of components dropping 2 to 4 per cent a month, the decision to buy ahead on parts is not something a third-party manufacturer is willing to take a punt on.
Total control allows Dell to prioritise orders for Australia, being the longest haul from the Malaysian production plants, rather than the traditional first in, first served model.
But although Dell's lean supply chain cuts costs, the company is also building sales in new markets. Last month it bought Miami-based PC manufacturer Alienware, which produces a machine popular with gamers; a concession that its consumer strategy failed.
Dell added $US6.7 billion ($A9.1 billion) in revenue worldwide last year, says corporate communications manager Nicole Gemmell.
The top six
OVERALLPC MARKET SHARE:
Company %
HP 16.5
Dell 15.7
Acer 11.6
Toshiba 7.1
Lenovo 5.9
Apple 4.1
Others 39.1
Source: IDC preliminary Q4 2006
Author: RP news wires
The Shingo Research Prize Award, focused on the lean enterprise, will be presented to the authors of three books, three applied publications, two published journal articles, and two non-published articles during the 17th Annual Shingo Prize Conference and Awards Ceremony to be held April 18-22 in Grand Rapids, Mich.
The Shingo Prize was established in 1988 to promote an awareness of lean manufacturing concepts and to recognize companies that achieve world-class status. The Shingo Business Prize has been dubbed by Business Week the “Nobel Prize of Manufacturing.” The Shingo Research Prize recognizes and promotes research and writing regarding new knowledge and understanding of manufacturing consistent with the philosophy and criteria of the Shingo Prize for Excellence in Manufacturing.
The Shingo Prize program is administered by the College of Business at Utah State University. Ross Robson is the program's executive director. Robson will be one of the featured speakers at "Lubed, Reliable and Lean," Noria Corporation's international conference and exhibition May 16-18 in Columbus, Ohio. For more information on this world-class conference, visit www.driveyourplant.com.
Among the Shingo research award winners, the first book, Kaikaku: The Power and Magic of Lean by Norman Bodek, provides an introspective look at the evolution and transformation of lean practices and books from Japan that catapulted Productivity Inc. and Productivity Press to a prominent status in the North American manufacturing community. Based on antidotal details of meeting some of the manufacturing geniuses of our time, Bodek captures in clear detail many of the principles and techniques of what we know of today as Lean Manufacturing. For first time as well as seasoned readers and practitioners of Lean Manufacturing, the book provides an insightful review of the foundation of both continuous improvement and radical change.
A second book, The Toyota Way by Jeffrey K. Liker, explains Toyota’s unique approach to lean and its 14 management principles and philosophy that drive Toyota’s quality and efficiency-obsessed culture. The book provides valuable insights that can be applied to any organization and any business process, whether in services or manufacturing. It is full of examples of the 14 fundamental principles at work in the Toyota culture, and how these principles create a culture of continuous learning and improvement. You’ll discover how the right combination of long-term philosophy, process, people, and problem solving can transform your organization into a lean, learning enterprise – the Toyota Way.
The third book, Who’s Counting? A Lean Accounting and Manufacturing Business Novel by Jerrold M. Solomon, is a business novel that explains how manufacturing and accounting must develop a partnership to successfully achieve world-class results. It exposes the financial surprises that will surface during a successful lean journey and provides a road map to bring accounting practices into the 21st Century. The book illustrates how all the usual objections of the accounting department can be overcome, including compliance with both Internal Revenue Service guidelines and Generally Accepted Accounting Practices. The book covers the difficult topic of lean accounting in an easy to read format that appeals to all of the functional areas involved in a lean transformation.
The first applied publication, Creating Level Pull by Art Smalley, shows readers how to advance a lean transformation from a focus on isolated improvements to improving the entire plant-wide production system by implementing a lean production control system. This workbook is unique because it is a step-by-step case study on how to implement a level, pull-based production control system, which is a new step toward “system kaizen” that is not yet well understood outside of Toyota. Using a realistic example facility, the author shows readers how to make the transition to a robust pull system and answers a series of 12 critical questions, including what items to hold in finished goods inventory and what items to make to order, how to buffer the system against instability, how to schedule batch processes, and how to level the production schedule.
The second applied publication, Making Materials Flow by Rick Harris, Chris Harris, and Earl Wilson, is a workbook that shows manufacturing professionals in operations, production control, and industrial engineering how to replace material-handling systems designed for mass production with systems that support lean production. The workbook uses plain language and illustrations to explain how to create, sustain, and improve a lean material-handling system for purchased parts. The authors break down the implementation process for readers by leading them through ten simple pragmatic questions that show how to apply the relevant concepts and methods in a step-by-step progression. The workbook also contains the formula, standards, and forms needed to implement the system.
The last applied publication, The Complete Lean Enterprise – Value Stream Mapping for Administrative and Office Processes by Beau Keyte, offers a step-by-step approach to applying lean initiatives to the administrative and office environment. It is a read for leaders looking to improve their production support activities within their order-to-cash value stream. The workbook is a valuable tool in applying value stream mapping to non-production areas, identifying office wastes, establishing performance metrics, speeding up administrative workflow, and improving office efficiency.
The first article, “Learning to Lead at Toyota” by Steven J. Spear, describes the experiences of a new hire to Toyota named Bob Dallis, an outstandingly successful manager at his previous employer, also an automaker. Unlike a traditional transition for someone of Dallis’s stature, he experiences a Karate Kid like training spending weeks in hands-on problem solving on the shop floor. As a result, Dallis discovers much about the managerial processes that Toyota uses to facilitate continuous improvement across a broad range of functions by a broad range of measures. Dallis comes to see his senior manager’s role in an entirely different light. He realizes that his job is to facilitate a cascade of problem-solving-related training and skill development that allows people at all levels to make meaningful contributions to bettering the work that they do.
A second article is “Managing Learning Curves in Factories by Creating and Transferring Knowledge” by Michael A. Lapre and Luk N. Van Wassenhove. Through an analysis of quality improvement projects conducted in one factory over a decade, this article identifies two dimensions of the learning process: 1) conceptual learning, which yields know-why, and 2) operational learning, which yields know-how. However, replication of this production line in other factories within the same firm fell short of expectations; neither creation nor transfer of such knowledge occurred. The evidence shows that a stable environment with continuity in resources, such as raw materials suppliers, enhances knowledge creation. Moreover, successful replication requires management buy-in and knowledge diversity.
The third article, “High Performance Product Development: A Systems Approach to a Lean Product Development Process” by James M. Morgan, compares and contrasts Toyota’s product development system to that of a North American competitor through an in-depth analysis of the automotive body development process in an attempt to understand how Toyota is able to consistently outperform their competitors in product development speed and quality. The article examines what, if any, is the link between Toyota’s product development process and the effectiveness of the Toyota Production System. This study identifies the underlying principles that form the core of the powerful systems approach to product development used by Toyota in which the fundamental system elements of process, people, and tools and technology are found to be mutually supportive and coherent in nature.
The last article is “The Effects of Just-in-Time/Lean Production on Worker Job Stress” by Robert Conti, Jannis Angelis, Cary Cooper, Brian Faragher, and Colin Gill, is the first known large-scale, multi-industry empirical study of the relationship of job stress to a range of lean practices, as well as to the degree of lean implementation. The results are based on 1,391 worker responses from 21 manufacturing sites in four UK-industry sectors. Eleven work practices are found to be significantly related to job stress, and an unexpected non-linear response of stress to lean production implementation is identified. The results and their implications are discussed in the article.
Further information regarding these works and the Shingo Prize can be found at www.shingoprize.org.
The finance function eludes any sort of standardized lean approach, but three ideas from the lean-manufacturing world are particularly helpful in eliminating waste and improving efficiency.
The McKinsey Quarterly, McKinsey & Co.
April 20, 2006
Waste never sleeps in the finance department — that bastion of efficiency and cost effectiveness. Consider the reams of finance reports that go unread and the unused forecasts, not to mention duplicate computations of similar data, the endless consolidation of existing reports, and mundane activities such as manually entering data or tailoring the layout of reports.
The impact is significant. In a recent exercise that benchmarked efficiency at consumer goods companies, the best finance function was nine times more productive than the worst (see exhibit). Production times also varied widely. Among the largest European companies, for example, it took an average of 100 days after the end of the financial year to publish the annual numbers: the fastest did so in a mere 55 days, while the slowest took nearly 200. This period typically indicates the amount of time a finance department needs to provide executives with reliable data for decision making.
In our experience with clients, many of these differences can be explained not by better IT systems or harder work but by the waste that consumes resources. In a manufacturing facility, a manager seeking to address such a problem might learn from the achievements of the lean-manufacturing system pioneered by Toyota Motor in the 1970s. Toyota's concept is based on the systematic elimination of all sources of waste at all levels of an organization. Industries as diverse as retailing, telecommunications, airlines, services, banking, and insurance have adopted parts of this approach in order to achieve improvements in quality and efficiency of 40 to 70 percent.
We have seen finance operations achieve similar results. At one European manufacturing company, for example, the number of reports that the finance department produced fell by a third — and the amount of data it routinely monitored for analysis dropped from nearly 17,000 data points to a much more manageable 400.
Borrowing from Lean
In our experience, the finance function eludes any sort of standardized lean approach. Companies routinely have different goals when they introduce the concept, and not every lean tool or principle is equally useful in every situation. We have, however, found three ideas from the lean-manufacturing world that are particularly helpful in eliminating waste and improving efficiency: focusing on external customers, exploiting chain reactions (in other words, resolving one problem reveals others), and drilling down to expose the root causes of problems. These concepts can help companies cut costs, improve efficiency, and begin to move the finance organization toward a mind-set of continuous improvement.
Focusing on external customers. Many finance departments can implement a more efficiency-minded approach by making the external customers of their companies the ultimate referee of which activities add value and which create waste. By contrast, the finance function typically relies on some internal entity to determine which reports are necessary — an approach that often unwittingly produces waste.
Consider, for example, the way one manufacturing company approached its customers to collect on late or delinquent accounts. The sales department claimed that customers were sensitive to reminders and that an overly aggressive approach would sour relations with them. As a result, the sales group allowed the accounting department to approach only a few, mostly smaller customers; for all others, it needed the sales department's explicit approval — which almost never came. The sales department's decisions about which customers could be approached were neither challenged nor regularly reviewed. This arrangement frustrated the accounting managers, and no one would accept responsibility for the number of days when sales outstanding rose above average.
The tension was broken by asking customers what they thought. It turned out that they understood perfectly well that the company wanted its money — and were often even grateful to the accounting department for unearthing process problems on their end that delayed payment. When customers were asked about their key criteria for selecting a manufacturing company, the handling of delinquent accounts was never mentioned. The sales department's long-standing concern about losing customers was entirely misplaced.
In the end, the two departments agreed that accounting should provide service for all customers and have the responsibility for the outstanding accounts of most of them. The sales department assumed responsibility for the very few key accounts remaining and agreed to conduct regular reviews of key accounts with the accountants to re-sort the lists.
Better communication between the departments also helped the manufacturing company to reduce the number of reports it produced. The company had observed that once an executive requested a report, it would proceed through production, without any critical assessment of its usefulness. Cutting back on the number of reports posed a challenge, since their sponsors regularly claimed that they were necessary. In response, finance analysts found it effective to talk with a report's sponsor about just how it would serve the needs of end users and to press for concrete examples of the last time such data were used. Some reports survived; others were curtailed. But often, the outcome was to discontinue reports altogether.
Exploiting chain reactions. The value of introducing a more efficiency-focused mind-set isn't always evident from just one step in the process — in fact, the payoff from a single step may be rather disappointing. The real power is cumulative, for a single initiative frequently exposes deeper problems that, once addressed, lead to a more comprehensive solution.
At another manufacturing company, for example, the accounting department followed one small initiative with others that ultimately generated cost savings of 60 percent. This department had entered the expenses for a foreign subsidiary's transportation services under the heading "other indirect costs" and then applied the daily exchange rate to translate these figures into euros. This approach created two problems. First, the parent company's consolidation program broke down transportation costs individually, but the subsidiary's costs were buried in a single generic line item, so detail was lost. Also, the consolidation software used an average monthly exchange rate to translate foreign currencies, so even if the data had been available, the numbers wouldn't have matched those at the subsidiary.
Resolving those specific problems for just a single subsidiary would have been an improvement. But this initiative also revealed that almost all line items were plagued by issues, which created substantial waste when controllers later tried to analyze the company's performance and to reconcile the numbers. The effort's real power became clear as the company implemented a combination of later initiatives — which included standardizing the chart of accounts, setting clear principles for the treatment of currencies, and establishing governance systems — to ensure that the changes would last. The company also readjusted its IT systems, which turned out to be the easiest step to implement.
Drilling down to root causes. No matter what problem an organization faces, the finance function's default answer is often to add a new system or data warehouse to deal with complexity and increase efficiency. While such moves may indeed help companies deal with difficult situations, they seldom tackle the real issues. The experience of one company in the services industry — let's call it ServiceCo — illustrates the circuitous route that problem solving takes.
Everyone involved in budgeting at ServiceCo complained about the endless loops in the process and the poor quality of the data in budget proposals. Indeed, the first bottom-up proposals didn't meet even fundamental quality checks, let alone the target budget goals. The process added so little value that some argued it was scarcely worth the effort.
Desperate for improvement, ServiceCo's CFO first requested a new budgeting tool to streamline the process and a data warehouse to hold all relevant information. He also tried to enforce deadlines, to provide additional templates as a way of creating more structure, and to shorten the time frame for developing certain elements of the budget. While these moves did compress the schedule, quality remained low. Since the responsibility for different parts of the budget was poorly defined, reports still had to be circulated among various departments to align overlapping analyses. Also, ServiceCo's approach to budgeting focused on the profit-and-loss statement of each function, business, and region, so the company got a fragmented view of the budget as each function translated the figures back into its own key performance indicator (KPI) using its own definitions.
To address these problems, ServiceCo's managers agreed on a single budgeting language, which also clearly defined who was responsible for which parts of the budget — an added benefit. But focusing the budget dialogue on the KPIs still didn't get to the root problem: middle management and the controller's office received little direction from top management and were implicitly left to clarify the company's strategic direction themselves. The result was a muddled strategy with no clear connection to the numbers in the budget. Instead of having each unit establish and define its own KPIs and only then aligning strategic plans, top management needed to link the KPIs to the company's strategic direction from the beginning.
Getting to the root cause of so many problems earlier could have saved the company a lot of grief. Once ServiceCo's board and middle management determined the right KPIs, the strategic direction and the budget assumptions were set in less than half a day, which enabled the controller's office and middle management to specify the assumptions behind the budget quickly. The management team did spend more time discussing the company's strategic direction, but that time was well spent. The result was a more streamlined process that reduced the much-despised loops in the process, established clear assumptions for the KPIs up front, and defined each function's business solution space more tightly. The budget was finalized quickly.
Getting Started
It takes time to introduce lean-manufacturing principles to a finance function — four to six months to make them stick in individual units and two to three years on an organizational level. A new mind-set and new capabilities are needed as well, and the effort won't be universally appreciated, at least in the beginning.
Integration tools can be borrowed: in particular, a value stream map can help managers document an entire accounting process end to end and thus illuminate various types of waste, much as it would in manufacturing. Every activity should be examined to see whether it truly contributes value — and to see how that value could be added in other ways. Checking the quality of data, for example, certainly adds value, but the real issue is generating relevant, high-quality data in the first place. The same kind of analysis can be applied to almost any process, including budgeting, the production of management reports, forecasting, and the preparation of tax statements. In our experience, such an analysis shows that controllers spend only a fraction of their time on activities that really add value.
The challenge in developing value stream maps, as one European company found, is striking a balance between including the degree of detail needed for high-level analysis and keeping the resulting process manual to a manageable length. Unlike a 6-page document of summaries or a 5,000-page tome, a complete desk-by-desk description of the process, with some high-level perspective, is useful. So too is a mind-set that challenges one assumption after another.
Ultimately, a leaner finance function will reduce costs, increase quality, and better align corporate responsibilities, both within the finance function and between finance and other departments. These steps can create a virtuous cycle of waste reduction.
From: Inc. Magazine, April 2006 Page: 49 By: Darren Dahl Photographs by: Jason Grow
Valentin Gapontsev hated depending on suppliers. So he did away with them.
Valentin Gapontsev was fed up with outsourcing. His company, IPG Photonics, based in Oxford, Massachusetts, had several long-term contracts with manufacturers in the U.S. and Austria to produce vital components for its lasers. When the Nasdaq crashed in 2000, taking the market for IPG's products with it, Gapontsev tried to renegotiate the terms of those contracts. One U.S.-based supplier refused to budge. Even worse, it filed a lawsuit and threatened to seize IPG's assets if the company didn't hand over $36 million by 2002.
That's when Gapontsev, a self-described control freak, made a vow: He would never outsource again. It wouldn't be easy, but he decided to do away with suppliers altogether. "More outsourcing would be absolutely the worst thing a company like ours could do," he says. "If we could control the price, quality, and quantity of our components, I knew we could control our own destiny."
Gapontsev's plan sounds radical. The overwhelming trend in business today is toward sending more, not less, production out of house. But many companies are finding it difficult to manage outsourcing, particularly when dealing with suppliers in far-flung countries like China and India, says Bill Swanton, a manufacturing analyst at AMR Research in Boston. After factoring in headaches such as long lead times and poor quality control, some businesses are deciding that it's just not worth it. The rise in counterfeiting is also making high-tech manufacturers wary of handing over intellectual property to foreign vendors. "A growing number of manufacturers have decided to keep their secret sauce here," Swanton says.
That's precisely what IPG has chosen to do. When Gapontsev--a laser glass researcher at the Russian Academy of Sciences for 25 years--founded IPG in Moscow in 1991, one of his main motivations was to gain control of his livelihood. "I wanted independence," he says. "Starting a business gave me freedom." From the outset, he was determined to build a hands-on company run by engineers, not by marketing experts or finance people.
In 1998, Gapontsev moved his headquarters to Oxford to capitalize on the technology boom, and sales began to take off. By 2000, IPG had become a primary supplier of lasers that pump information along fiber-optic cables to the world's major telecommunication providers, including Lucent Technologies and Italy's Marconi. Thanks to the buzz surrounding the telecom industry, IPG--with manufacturing facilities in the U.S., Germany, Italy, and Russia--raised $100 million from investors in 2000 and was preparing to go public. When telecoms started to tank, he knew he had to make a drastic change.
It wasn't easy. Like many U.S. manufacturers that are opting to stay local, IPG was forced to invest heavily in highly automated production facilities to cut costs. In 2001, Gapontsev plowed the remainder of a recent round of financing, more than $45 million, into an ambitious overhaul of IPG's U.S. and German locations. The Oxford campus, which was completed last year, now boasts 125,000 square feet of laboratories, offices, and automated production lines that use robotics to assemble parts. To staff the facility, Gapontsev tapped local community colleges and universities, including MIT. He also hired several independent distributors to set up sales offices in Korea, Japan, India, and the United Kingdom. IPG now employs 750 people at eight locations worldwide, compared with 202 in 2000.
Gapontsev's workload has increased accordingly. He still calls most of the shots at the company and spends two or three weeks each month traveling around the globe to check in on each location and to visit key customers. "I racked up 500,000 frequent-flier miles last year," says Gapontsev, who owns homes in the U.S., Germany, and Russia. IPG's chief financial officer, Tim Mammen, is on the road almost as much, coordinating lines of credit with local banks, overseeing finances at each location, and keeping an eye on currency fluctuations. To streamline its accounting process, IPG recently installed a new Web-based system that will link the financial information from each office.
For the first time, IPG is equipped to produce every critical part of its lasers, from diodes, which generate the laser's burst, to fiber cable, which transmits the laser beams. Thanks to the streamlined production process--not to mention lower shipping bills and the elimination of premiums charged by vendors--IPG now spends less money making its own components than it did buying parts from suppliers. Diodes, for example, are 90 percent cheaper to produce in-house. The savings let IPG charge less than its rivals, which has helped it corner 65 percent of the $123 million fiber laser market.
IPG's sales, which bottomed out at $22 million in 2002, jumped to $96 million last year. Having settled the lawsuit with its former supplier in 2003 for an undisclosed sum, the company has been profitable the past two years, Gapontsev says. With a vertical supply chain in place, he is focused on making inroads into new markets. IPG's lasers, which cost anywhere from a few dollars to a few million dollars, are now used to remove facial wrinkles, destroy munitions stockpiles in Iraq, and cut metal used in industrial projects. Gapontsev, 67, is enjoying the ride. Now that IPG is back on track, he has no plans to hand over the reins anytime soon. An IPO is still a possibility, he says, as long as he remains at the helm. "I didn't build this company to sell it and play golf," he says. "I built it to sustain it."
Only three years short of celebrating a century of dedicated service to the African mining and minerals-processing industry, Weir Minerals is showing no signs of slowing down on its fast-paced journey to distinction. “Our journey to excellence started back in 2002, in which we drew our focus away from the past production methods and concerned ourselves with what the market actually wants – higher product quality and higher service levels,” states sales and marketing director Ulrich Kienle. He notes that the past 18 months have been eventful in terms of revolutionising how the company manufactures its product. “We have taken great strides in implementing lean manufacturing principles. There have been signifi- cant gains, including shorter lead times for spares and projects, improved product quality and higher service levels, as well as a greater flexibility to produce what the customers want, when they need it,” says Kienle. These improved service levels are evident in the company’s initiative to deliver higher levels of customer service directly to the customer’s location, by reviewing its route to market approach. Following the opening of new branches in South Africa and certain strategic African countries, Weir has a more effective mix of direct representation through branches or subsidiaries, agents and distributors. “We are finding that agents are making huge investments in themselves in their commitment to superior service,” says marketing communications and PR representative Penny Darroll. “Using best-practice approaches honed by Weir Minerals, we give real cradle-to-grave support on our products. This includes anything from applications engineering on projects, to site audits, fault finding, system improvement, field and commissioning service, spares support, performance and agreements and maintenance contracts, equipment service and rebuilds,” says Kienle. In an ongoing quest to do what the customer needs most, Weir Minerals Africa has concerned itself with packaging lasting solutions to the customer. Taking the demanding constraints placed on today’s processing plants in the areas of reliability, availability, costs and shortage of skills, Weir has shifted from being a seller of pumps and spares to being a provider of slurry equipment solutions. These solutions comprise pumps, hydrocyclones, mill-lining systems and slurry valves. “We can now focus on helping our customers reduce their life-cycle cost or total ownership cost (TOC),” says Kienle. This is particularly relevant at a time in which higher starting efficiencies and maintaining them for longer are industry buzz words, given the rising power costs in South Africa. The company has also invested into product development and materials research. “Many new pump lines have since been released, including the ERP, MU and XU and more exciting ones are to follow,” elaborates Kienle. Weir has also renewed its investment in new state-of-the art CNC m/c tools, extruders for rubber plant and jigs and tools to support one-piece flow. The company’s successes are mounting with growing unit pump sales and the “newer” product lines of cyclone cluster sales and mill-lining systems, both of which have topped targets set for the past two years running. “We take this as confirmation that our migration from product supplier to solution provider is well on the way,” notes Kienle. Increased sales are complemented by an increase in staff. “Some ten new sales and tendering engineers and metallurgists have complemented and strengthened our team in the past 12 months, allowing us to deliver our mission. Our aim is to look at the process of the application as opposed to the individual building blocks and they help us in this,” he says. The company’s approach must be resonating with customers, if their response to Weir Minerals is anything to go by. “It is very gratifying that cus- tomers, too, are now responding to Weir with many recent accolades for service excellence, projects concluded on time as well as best ser-vice levels and documented TOC reductions,” states Kienle. Weir Minerals can also list black economic empowerment (BEE) as one of the company’s notable achievements, following its inclusion in South Africa’s top 300 most empowered companies with an Empowerdex BEE “B” rating. This long-term practice of workplace empowerment is further enhanced with the company’s having established a new BEE company, Weir Minerals Service (Africa), with a 26% black equity partner. Alongside these developments, the company has undergone extensive rebranding. The company has commenced trading as Weir Minerals Africa and is assuming a much higher profile in the industry as a total solution provider. Following the Weir group’s acquisition of Warman International in 1996, all horizontal, vertical and submersible pumps are now branded Envirotech for Africa and Warman for the rest of the world. “We hope that, as a result of the branding, the company will enjoy more exposure. There are lots of new activities on the horizon, including participation in Electra Mining 2006,” adds Darroll. The effects of the Warman International purchase have been felt in the company’s product range.
“The acquisition of Warman has brought with it a huge product range,” says pumps product manager Don Higginson. The company now boasts a global range of pumps which can be supplied in adherance to the client’s specifi- cations. The ERP pump, developed by Weir Minerals Africa, has been proved and tested in the market and its successes are mounting with more sizes being added. “At present, there are 30 sites spread across 15 mining groups all over Africa and into the former Soviet Union and Australasia,” says Higginson. This is a sterling example of how improved hydraulic design, coupled with advanced material science and smarter manufacturing processes and attention to detail with regards to serviceability, can produce a product that delivers unparalleled TOC performance, beating competitor offerings by factors of twofold and more. It is also a completely locally developed product. “This is a demonstration of the engineering competence present in South Africa,” says Kienle. One of the manufacturing methods contributing to the pump’s success is the replicast method. Boasting 100% repeatability, this die-cast method, using polystyrene effectively, reproduces the speci- fications given and is used extensively throughout the group. “Replicast gives you a quality of definition that is unprecedented,” Kienle emphasises. Weir Minerals Africa has also upgraded its range of mill circuit pumps. Higginson explains, “These are the most critical of all pumps in process plants. As a result of a global programme we can now offer one of the most advanced mill circuit solutions in the world. This includes hydrocyclone, vortexless cyclones, cyclone and mill liners, making us a solution provider for the mill circuit as a whole.” These products are user friendly and improve the efficiency of the entire circuit.
Unlike conventional circuits, the large and abrasive materials involved make the mill circuit more unpredictable than its counterparts. The product development team has responded to this extreme-wear environment by using superior materials.
“We are the world leaders in wear-resistant materials. We are most advanced and a number of our materials and methods are patented,” says Higginson. The product development team also makes use of advanced computational fluid dynamics to identify high wear areas and thus enable them to extend the life of each component. “We have also redeveloped mechanical ends that are easier to change,” says Higginson. Being extremely robust, smaller in size and interchangeable across a wide variety of models, there is substantial development in this area. He adds, “We are also improving the motor mounting on pumps to reduce the amount of downtime and keep the product at an optimal point.” “Everything we do is based on the premise that making the product last as long as possible ensures that customers can meet service intervals. We are not the cheapest but what we offer is superior design skills that result in a product that guarantees process and by output measure you have lowest operating cost,” says Kienle. “As we approach our centenary, our investment in product and infrastructure is all coming together,” he concludes.
Methods to improve work flow and cut errors are said to save money and increase patient satisfaction.
ERIN JORDAN
REGISTER IOWA CITY BUREAU
April 21, 2006
Iowa City, Ia. — Patients at University Hospitals are spending less time in waiting rooms, thanks to efficiency practices tested in the automobile industry.
"I used to wait for a long, long time," said Antonia Ainslie, 61, who has breast cancer.
Ainslie and her husband, Kirk, have shaved at least an hour off the time they spend at University Hospitals for Antonia Ainslie's biweekly chemotherapy treatments. The change came about after an efficiency review that reduced nurses' per-patient walking by 90 percent, cut patients' waiting time and bettered overall satisfaction, said Ami Gaarde, assistant nurse manager for the suite. "You're actually spending more time with patients," she said.
Techniques for improving work flow and reducing errors have been used for years by companies such as Toyota and Motorola. They are now gaining momentum in the health care industry because they save money and increase patient satisfaction, said Sabi Singh, University Hospitals' director of operational improvement.
"I don't see a better need for this kind of process than in health care right now," said Singh, who came to the U of I last year from Michigan, where his company produced components for Ford, Chrysler, General Motors and Toyota.
University Hospitals is among at least a dozen Iowa hospitals using or considering using Lean Manufacturing, a zero-waste process developed by Toyota, the Iowa Business Council reported. The hospital decided to hire Singh, at an annual salary of $100,000, after researching how Lean techniques were working for other council members, said Ann Madden Rice, chief operating officer at University Hospitals.
"We took a risk that Lean would work in the health care environment," Madden Rice said.
The risk seems to be paying off. Patient satisfaction has risen by nearly 10 percent in the hospital's Emergency Department after a November efficiency review.
"In the ER, the goal was to improve the wait time," Singh said.
Singh and department leaders started by mapping out each step in an ER visit. They eliminated steps that didn't benefit the patient and standardized procedures so there are fewer opportunities for errors. Among its changes, the team limited the number of times a patient recounts his or her medical history, Singh said. Trauma rooms that would have been left open in the past are now being used for less-serious cases.
"We try to work through the entire process and see what the patient would want," said Eric Dickson, director of emergency medicine. "We really want to stand out as a department that has great services."
The goal of a recent review of the hospital's Digestive Diseases Department was to improve the three-month waiting period before colonoscopies and endoscopies, Singh said. It's too early to notice results, he said, but staff members have tightened scheduling and hired assistants to call patients in advance to make sure they are prepared for the procedures.
University Hospitals hopes the reviews will save money, but not, necessarily, in reduced staffing, Madden Rice said. "As improvements are made, staff time can be redirected to better quality and patient satisfaction, both of which reduce costs over time," she said.
By Laura Keeter Daily Times Staff Writer
Wilson Merck held a celebration Friday for its new business strategy called lean manufacturing.
Employees got a visit from Sue Capps-Morris, the vice president of U.S., Puerto Rico, Latin America and Canada operations. Capps-Morris spoke briefly to employees during a celebration luncheon and congratulated them on the good job they've done to this point.
The Wilson site is Merck's first U.S. site to reorganize around this new strategy. The site in Puerto Rico was the first site overall, and more sites will follow, said Agnes Speight, public affairs manager in Wilson.
This new strategy will eventually be used throughout the company.
The Wilson site applied the new concepts about three weeks ago. Benefits have come already — quicker response times, lower inventories and shorter cycle times. The benefits result in lower costs and more efficient operations, according to a company press release.
"The future of Merck and the future of the Wilson site depend on the changes Merck is making now," said Pat Ryan, plant manager. "We're arming Merck for 21st century competition in an industry that will never be the same as it was in the 1980s, and we're ready at Wilson to play our part. We're used to being the site that leads the way. We don't intend to let that change."
Lean manufacturing was introduced at Toyota more than 50 years ago, and is a proven strategy that's been adopted by many industries, according to the press release.
Merck's lean manufacturing strategy — called the Merck Production System— features some key aspects. The system is lean (elimination of waste), agile (quick response to customer needs) and customer-driven (production based on what the customer actually requires).
Lean manufacturing targets seven areas of waste such as defects, overproduction, motion and inventory. The system isn't used to reduce head count. In many cases, head count may not be affected at all, Ryan said.
The Wilson site began preparing for the April 3 kickoff in the first quarter of 2005. Staff mapped every step of every process. They spent hours determining ways to remove waste throughout the operation.
At Wilson Merck, manufacturing processes have been streamlined, so unnecessary steps were removed. Production is no longer based on sales forecasts but on customer demand.
A prominent feature of a lean facility is the use of visual aids that inform employees about the status of production, improvement opportunities and performance results. The end result is a more flexible, agile and responsive manufacturing process. Now manufacturing delivers what is needed, when it is needed, in a cost-effective manner.
The resulting new organizational structure takes the Wilson facility to a business process focus. Before, Merck operated from a functional (departmental) focus. Now employees work in either an "integrated process team" or a "center of excellence" instead of in individual departments.
Merck is making these changes in response to a pharmaceutical industry that has "changed tremendously" from 10 years ago, the release said. For example, the development of blockbuster drugs without competition for even a short time is now the exception rather than the rule.
"To continue to do business under the old model in the new competitive environment that exists today and expect to be successful is totally unrealistic," Ryan said.
"Merck wants to be the No. 1 supplier of drugs and vaccines in the world again. We at Wilson want to be the company's first choice of manufacturing sites."
Business Correspondent
FIVE East London-based automotive component manufacturers reported efficiency and production improvements of up to 100% coupled with substantial cost savings after completing the government’s Tirisano programme.
The Tirisano programme was designed to assist the automotive supply chain become more globally competitive and was first piloted in Gauteng in 2004 before coming to the Eastern Cape last year.
The five participating Eastern Cape companies are First National Battery, Firstpro Engineering, Fabkomp, Dinky Manufacturing, and New Deal Trading. The companies represent 371 employees, of whom 248 have undergone training in the tools of lean manufacturing, including workplace organisation and the reduction of wastes
Automotive Industry Development Centre supplier development manager Fayaz Sacoor said companies had shown improvements of up to 70% in production output, a 35% reduction in finished-goods stock holding, and up to 67% improvement in overall people productivity.
AIDC chief executive Dr Paulo Fernandes said the improvements would bolster the industry and economy of the Border/Kei region.
“What we see is five East London- based companies that have moved to a new level of operational performance since Tirisano was launched a year ago, and that means greater returns, additional job security, and a stronger supply base for manufacturers like DaimlerChrysler.
“Manufacturing companies in the Eastern Cape must relentlessly pursue world-class production standards to survive and grow as we are competing less with manufacturers in South Africa as those located internationally,” Fernandes said.
Sacoor said due to the measurable impact of the programme within participating organisations it would be extended to as many companies as possible.
He confirmed that the AIDC had initiated two new Tirisano cluster programmes and that the current programme would be extended from six months to 13 months.
Those taking part in the new programmes are Autoliv AZA, Baisch Engineering, KPL Die Casting, Nicoil, Z F Boge Elastmetall SA, Acoustex, Autopress, Cape Traders, Faurecia Interior Systems, and Natstan Wire.
The first two clusters involved Gauteng suppliers to the Ford Motor Company, and the third Eastern Cape with suppliers to DaimlerChrysler SA.
The AIDC, mandated by the government to assist the industry in becoming more globally competitive, is supported by the ECDC and the CSIR in the Eastern Cape.
It is funded largely by the department of trade and industry.
TI Automotive Unit Wins Shingo Prize For Excellence
MEXICO CITY, April 10 /PRNewswire/ -- TI Automotive, a global supplier of fluid storage, transfer and delivery systems, has won the prestigious Shingo Prize for Excellence in Manufacturing. A 2006 Shingo award went to the company's production facilities in Mexico City, Mexico. The 180,000-square-foot plant supplies brake and fuel-line "bundles" for a number of leading auto manufacturers, including DaimlerChrysler, Ford, General Motors and Volkswagen. It also produces fuel modules for service and automotive aftermarket applications.
Referred to as the "Nobel Prize of Manufacturing" by Business Week magazine, the Shingo Prize is given annually to manufacturers in the United States, Canada and Mexico that deliver world-class performance through lean principles and techniques in core manufacturing and business processes. It is named for Dr. Shigeo Shingo, credited with the development of the Toyota Production System.
Previous TI Automotive facilities which have won the Shingo Prize include its Cartersville, Ga., plant in 2004 and the company's Caro, Mich., and New Haven, Mich., plants in 2003. In addition, TI Automotive's Greeneville, Tenn., facility was a finalist in 2004.
Hector Mijares, plant manager of TI Automotive's Mexico City plant, received the award from Ross Robson, director of the Shingo Prize during recent ceremonies at the Northern Kentucky Convention Center, at Covington, Ky.
"Our rigorous commitment to quality, lean manufacturing and continuous improvement has produced impressive world-class parts-per-million trends, on- time delivery performance and inventory reduction rates," says Mijares. "This facility often has been cited a number of times for quality performance and we're especially honored to have been recognized with a Shingo Prize."
TI Automotive's Mexico City plant has nearly 500 employees and has achieved ISO/TS 16949 certification, as well as ISO 14001 environmental certification. The facility also has received Ford Q1 recognition for quality performance.
The facility is dedicated to community and environmental issues and operates under TI Automotive's company-wide Common Sense Manufacturing system.
"To achieve our lean-manufacturing goals, we rely on our employees," Mijares says. "They are key to our continued success. Their commitment, dedication and creative ideas have improved our business significantly. The Mexico City plant is now one of TI Automotive's best performers in North America."
Administered by the College of Business at Utah State University in Logan, Utah, the Shingo Prize program evaluates companies on key activities and results over at least three years in five areas: leadership culture and infrastructure; manufacturing strategies and system integration; non- manufacturing support functions; quality, cost and delivery; and customer satisfaction and profitability. All winners have made teamwork and continuous improvement an integral part of their culture.
Mijares notes that current models using parts produced at the Mexico City plant include DaimlerChrysler's PT Cruiser and Dodge Ram; Ford's Fiesta Ikon
and F-Series pickups; GM's Chevrolet Chevy, Cadillac DTS and Buick Lucerne, and the Volkswagen New Beetle, Jetta and Bora.
TI Automotive is the world's leading supplier of fluid storage, transfer and delivery systems including brake, fuel and air conditioning applications. Its global headquarters is located in Oxford, England, while its North American operations are based in Warren, Mich. With annual sales of approximately $2.3 billion, the company employs over 20,000 people at more than 130 facilities in 29 countries on six continents.
April 17, 2006
"With the growing demand for wind power worldwide, it is critical for GE to get the highest possible levels of production out of our existing wind turbine manufacturing facilities."
-- Rainer Broering, Managing Director of GE Energy's wind business in Germany
GE workers in Germany put the finishing touches on a GE 1.5 MW turbine. A new production line will boost capacity.
Photo: GE Energy
Salzbergen, Germany [RenewableEnergyAccess.com] While specific proposed wind power developments face their fair share of challenges including local and political opposition, one of the greatest challenges to wind power as a whole is a tight and increasingly expensive supply chain for key components like turbines.
In the same way a raw material shortage has cramped the solar photovoltaic industry, the wind power industry has been squeezed by a turbine shortage -- a situation the manufacturers will tell you is the result of vacillating policy support in the U.S.
Whatever the causes, the largest manufacturer of turbines in the world, GE Energy, announced advances this week in its production chain that could help squeeze out a few more turbines to help meet robust worldwide demand.
In Germany, GE Energy's wind business has opened a new 80-ton, wind turbine "moving line" in its Salzbergen manufacturing facility that will help to meet increased global demand for wind turbines.
This moving line is a 42-meter rail system on which the turbines are continuously moved during production. It has been designed for the manufacture of both GE 1.5 and multi-megawatt wind turbines and, according to the company, offers a 30% increase in capacity along with quality and safety improvements.
GE says the efficiency of the line will enable GE to increase its capacity by 30 percent while reducing its inventory by 40% at the Salzbergen plant. A key feature of the new moving line is its capability to detect abnormalities should they occur in wind turbine assembly and halt the manufacturing process until the issues are resolved. It can move at various speeds to accommodate different output levels.
"With the growing demand for wind power worldwide, it is critical for GE to get the highest possible levels of production out of our existing wind turbine manufacturing facilities," said Rainer Broering, Managing Director of GE Energy's wind business in Germany. "The Salzbergen team began addressing this requirement three years ago, applying 'lean-manufacturing' principles to the hub production area of the plant, transforming it into a model line. Motivated by the results of the model line, the team tackled the next challenge, the machine head line, a more diverse and complex product. The result is our new moving line."
With wind turbine design, manufacturing and assembly facilities in Germany, Spain and the United States, GE Energy is among the world's major providers of wind energy products and support services ranging from commercial wind turbines and grid integration products to project development assistance and operation and maintenance.
Coffee-brewing equipment maker implements QAD software for advanced manufacturing
Quebec — April 17, 2006 — VKI Technologies, a manufacturer of coffee-making equipment and related products, is taking steps to drive more cost out of its supply chain and manufacturing operations and establish a foundation for building its business in new markets, the company has announced.
Quebec-based VKI is deploying QAD MFG/PRO eB2 technology from California-based enterprise software provider QAD Inc. to support the company's "lean" manufacturing initiatives and related advanced production techniques.
VKI Technologies produces coffee-brewing equipment for the North American market and licenses its technology to equipment manufacturers in Europe and Japan. According to Robert Primeau, director of business strategies and customer support, VKI is focused on eliminating parallel systems and expanding use of QAD software to ensure a consistent standard for enterprise operations — from finance to the factory floor and supply chain and, in the future, customer self-service.
VKI's manufacturing facilities encompass several operational processes and just-in-time (JIT) techniques such as mix model assembly lines, point-of-use storage, cellular manufacturing in its sheet metal department and Kanban card-controlled production, all of which have increased the company's manufacturing flexibility and reduced its response time for specific customer orders.
"VKI Technologies is committed to leading-edge manufacturing methods, and QAD MFG/PRO provides a solid foundation for our lean manufacturing and 'continuous improvement' initiatives," said Primeau. "QAD software has provided VKI Technologies with the [enterprise resource planning (ERP)] and manufacturing data we need to make strategic decisions for 15 years, and we anticipate the technology will continue to be integral to our success as our business advances."
A Platform for the Future
Timely information from its QAD system has enabled VKI Technologies to implement business scorecards that comprise nearly 30 key performance indicators (KPIs) — including financial, technical and customer support information — on a daily basis. This insight enables executives to adjust manufacturing processes to address issues and improve product quality. To that end, QAD technology will help the manufacturer with product lot and model tracking, which are important to warranty and customer service, and even to the development of successful new products.
VKI has a global clientele, serving customers of its parent company, Canada-based coffee roaster Van Houtte Cafe, and working directly with companies primarily located in North America. As VKI seeks to expand its direct business in Europe, Primeau anticipates QAD MFG/PRO software will help control internal procedures.
Looking ahead, VKI will use data in its QAD system to facilitate customer self-service via the Internet. The manufacturer also will evaluate QAD Supply Visualization to automate its Kanban system and specific events, such as signaling stock minimums and providing up-to-date Kanban status to suppliers. Primeau said manual and signal-based systems, in combination with automation, will help VKI meet on-time delivery targets and production planning needs.
"Companies such as VKI Technologies are taking advantage of the flexibility of their QAD investments in order to support the advanced manufacturing techniques that will give them a competitive edge now and into the future," said Pamela Lopker, chairman and president at QAD.
Automaker says cost, not geography will decide where new factory will be located
Bryce G. Hoffman / The Detroit News
NEW YORK -- Now that Ford Motor Co. has announced its promised second round of plant closings, attention has turned to the company's plan to build a new, low-cost manufacturing facility somewhere in North America.
Just where the new factory will be has been the subject of much speculation since the plan was announced as part of the company's broader restructuring strategy in January. Initially, most bets were on Mexico.
Mark Fields, president of Ford's Americas group, told The Detroit News that the location of the new plants will be decided by money, not politics. "The criterion is low cost," Fields said. "The criterion is not geography."
Behind the scenes, other Ford officials say the company prefers to build the new factory in the United States, but only if it can be fully competitive with those operated by Asian rivals such as Toyota and Hyundai. That will require major flexibility on the part of the United Auto Workers. Otherwise, Ford will not hesitate to put the plant in Mexico or Canada.
"The union is really interested in cooperating on this," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, adding that he expects the new plant to be the jewel in Ford's manufacturing crown. "This is all very doable."
In recent years, both General Motors Corp. and DaimlerChrysler AG's Chrysler Group have had some success building efficient and cost-effective manufacturing facilities in the United States.
GM's highly automated Grand River Assembly Plant in Lansing has become a model for the domestic automotive industry.
Most factories organized by the UAW divide the labor of automotive assembly into dozens of job classifications, and workers are rarely allowed to do anything not covered in their job description.
There are fewer job classifications at Grand River, and workers there are organized into teams. Each team member -- including the team leader -- knows how to perform each task that the team is responsible for. That means workers can be rotated and fill in for each other as needed. This approach allows for more flexibility on the factory floor and allows the plant to meet production targets with fewer workers. Union officials say it also translates into better quality and fewer ergonomic injuries.
GM's Lansing plant also embodies the flexible manufacturing ideal. It produces the Cadillac CTS, SRX and STS on the same line.
Chrysler's Belvidere Assembly Plant is another example of flexible manufacturing coupled with a modern operating agreement. With more automation and fewer workers, the plant produces the new Dodge Caliber and will be responsible for assembling the Jeep Compass and Patriot later this year. Much of the subassembly work at Belvidere is outsourced to suppliers, making for a more cost-effective operation.
However, Cole said the best model for modern manufacturing -- and a modern manufacturing agreement -- is the Global Engine Manufacturing Alliance World Engine Plant, which opened last year in Dundee. The plant is a part of a global joint venture between DaimlerChrysler, Hyundai Motor Co. Ltd. and Mitsubishi Motors Corp.
There are only two job classifications at the plant, which requires extensive cross-training for all workers. To make sure they are up to the challenge, all applicants are required to have at least some college education. Much of the nonmanufacturing work at the Dundee factory is outsourced, meaning the company does not have to give UAW wages and benefits to the people who mow the lawn and clean the bathrooms.
UAW officials say these success stories demonstrate the union's willingness to embrace more flexible work arrangements. "If (Ford) could get a contract like (Dundee), that would be absolutely critical," Cole said. "A modern, 21st-century plant with a 20th-century labor agreement just doesn't make sense."
Given that Ford plans to close more than a dozen plants in North America over the next six years, some may wonder why the company needs another factory. But Cole said it makes sense for Ford to start from scratch. Ford's existing factories were built before the company got the religion of lean manufacturing, and previous attempts to apply this science have involved shoe-horning new assembly lines into outdated buildings.
"If you don't lay out your new building efficiently, you are just trading one plant for another and you are not really saving anything," said Rebecca McCarter, a benchmarking expert for the Michigan Manufacturing Technology Center in Plymouth. "(And) if they are looking at a green manufacturing plants, it's way easier to start fresh than do it with an existing plant."
Moreover, building a new factory allows Ford to set up a bidding war between the states. Asian manufacturers like Toyota Motor Corp. and Hyundai have received hundreds of millions of dollars in tax incentives for their American plants, and Ford could expect similar incentives.
"I don't think there's any way this plant will be done outside of the UAW," Cole said, though he said the competing Canadian Auto Workers union also will make a big play for the plant. "It would be a real slap in the face to the union."
Besides, he expects the new plant will be a valuable bargaining chip for Ford when its contract with the UAW expires next year.
A new JIT/LEAN manufacturing book by Hiroyuki Hirano and Makoto Furuya, edited by Norman Bodek. The book provides a comprehensive step-by-step approach to the tools of Lean Manufacturing and demonstrates that Lean must be lead by a commitment to change and a positive approach to innovation.
Vancouver, WA (PRWEB) April 4, 2006 -- A new JIT/LEAN manufacturing book by Hiroyuki Hirano and Makoto Furuya, edited by Norman Bodek. The book provides a comprehensive step-by-step approach to the tools of Lean Manufacturing and demonstrates that Lean must be lead by a commitment to change and a positive approach to innovation.
Fifteen years ago Mr. Hirano’s JIT Implementation Manual was sold in the US for $2,000. Can a business manual be worth $2,000? If you read the book and applied JIT principles in your company you could have saved millions of dollars. Mr. Hirano’s and Mr. Furuya’s new book will surely dazzle you and the price of the book is only $47.52.
JIT IS FLOW is a treasure chest on how to implement JIT/Lean. This book is a wonderful addition to Jeffrey Liker’s The Toyota Way, and books by James P. Womack and others. Mr. Ohno and Dr. Shingo would surely have approved.
Included:
* “5S” Concept for Management – 1 S Simple is best, 2 S Small is Beautiful, 3 S Slim is elegant, 4 S Short is flexible and 5 S Smooth is excellent.
* Inventory is the Best Measure of Management – Why Inventory Accumulates – Inventory, a Necessary Evil?
* Production and People - The Honesty of Factory - The Truth about Top Management - The Truth about Employee Morale - The Truth about Organization - The Truth about Machines and Equipment - The Truth about Efficiency -People Love Making Things - People Have a Love for Place - People Have a Love for People - People Have a Love for Product
In addition: Converting to JIT Production, Elimination of Waste, Production is Music, Five Faults of Large Facilities and Equipment, Standard Operations, The Six Rules of Kanban, the 10 Commandments of Kaikaku, The Five Progressive Levels of Factory quality, Three Basic Causes of Zero Defects, Four Steps to Autonomation, The Five Basics for Innovative Setup/Changeover Reduction, Measures for Effective Maintenance.
I would be happy to send you the Table of Contents please email me at e-mail protected from spam bots
Foreword by Robert “Doc” Hall
“JIT truly is flow—and flow is best medicine in a disruptive ultra-competitive world. This book covers all the bases in telling how. And don’t miss the insightful 24-page interview at the end. I think the trailing interview with Erik Hager is great.” Richard J. Schonberger, author or Japanese Manufacturing Techniques: Nine Hidden Lessons in Simplicity
“Going through this book has been a rewarding experience. Hirano's "5 Pillars of the Visual Workplace" and "JIT Implementation manual" were classics. They contained detailed descriptions of the techniques and clear instructions that could be immediately implemented on the shop floor. However they were also very prescriptive and not so easy to adapt to other sectors. This book brings out the depth of the thought process behind Hirano's work. The know-why and the know-how that is contained in this book will be extremely useful to every business in today's scenario. It is an amazing book. This is another feather in your cap. Best wishes for the success of this book - and may there be many more.” T. V. Suresh, President, Tao Consulting, Chenai, India
“JIT IS FLOW is the best lean manufacturing book for study groups that I have ever encountered.” Doug Nelson, CFPIM, CIRM, CSSBB, President, APICS, Portland Chapter
“JIT IS FLOW” gets back to the 'basics' of lean. The book goes right to the heart of 'why' we focus on waste (long-term competitiveness & profitability), as opposed to making waste reduction a short-term, cost-savings-based exercise. By understanding the principles behind the tools, we can begin the journey toward REAL change, & REAL success. I plan to recommend this book to every management team I work with. Bill Kluck, President, NWLEAN, Inc
This is a great book. It provides a comprehensive step-by-step approach to the tools of Lean Manufacturing and demonstrates that Lean must be lead by a commitment to change and a positive approach to innovation. I encourage every manager that is motivated to get results to read this book! Collin McLoughlin, President, Enna Inc.
“JIT is FLOW" is a great HOW To manual for any organization looking for the competitive advantage. This should be a required Text for all business schools! Hirano is an Icon and is still ahead of his time. David McGiverin, Process Engineer, DCI International
“Their explanations are both simple and profound, the mark of deep experience. Readers new to the system will easily grasp the basic ideas, while those that have worked with it a long time will spot insights that had not occurred to them before. Like Alice in Wonderland, readers are apt to learn from it according to the experience they bring to the reading – and perhaps see something new each time they re-thumb it. That makes JIT IS FLOW a book to keep on the shelf. The foreword was written by Robert “Doc” Hall, editor of AME’s Target magazine.
Other books from PCS Press: The Idea Generator – Quick and Easy Kaizen, Kaikaku – The Power and Magic of Lean (A Shingo prize winner), All You Gotta Do Is Ask, and Rebirth of American Industry. The press can obtain copies of books by contacting Norman Bodek at 360-737-1883 or e-mail protected from spam bots; others can purchase copies from www.pcspress.com
A portal-type, twin-belt grinding machine, capable of working on fabrications up to 3m in length, has replaced manual weld dressing operations and nearly halved dressing time on some jobs.
Leicester, UK-based Carlton Laser Services has built its business on the firm foundation of investment in the most suitable technology, systems and the development of their people to meet the demands of its customer base. Those customers tend to operate in what Mohan Jassi, Carlton's production director, describes as niche markets, namely medical, food, electrical and specialist vehicles. The result is a business that specialises in producing laser cut components and complete fabrication solutions in the low to medium volume range, delivering to 'just in time' and Kanban scheduling systems.
Working in these areas demands a great deal of flexibility on the part of Carlton Laser Services and its 70 employees.
However, having heavy investment in automation, including an FMS laser/punching cell and highly efficient robot-loaded press brake highlighted another potential bottleneck and quality issue, namely manual weld dressing and finishing of completed fabrications.
'As part of our project of 'working smarter' we are constantly looking at ways of taking cost and time out of manufacture of components and we had identified solutions in terms of lasering and folding, etc, but one of the bottlenecks we had was the grinding section.
The challenge was to reduce cycle times while at the same time deliver consistent quality,' said Jassi.
The solution was to replace manual weld dressing operations with some form of automation, namely a Kuhlmeyer PZM 2.2 portal-type, twin-belt grinding machine from Ellesco.
The machine, which is capable of working on fabrications up to 3 m in length, is equipped with two continuous grinding belts offering roughing and finishing options in the same setup.
The belts run parallel to each other, travelling around a triangular pulley system, providing an open working environment for operating and loading the machine.
Once loaded onto the machine components can be easily positioned on the motorised axes to achieve the ideal working position, greatly reducing operator fatigue, and presenting any of the five available component faces to the belts for grinding.
The operator then applies pressure using shaped hand tools or the machine's 'pendulous' pressure pad to remove excess material.
'We see the future of manufacturing as one where you have to invest to survive,' said Jassi.
'You have to have the right equipment to remain competitive, particularly in the markets that we operate in.
We have studied what our competitors are doing overseas, and this helped us to recognise that we have to constantly look at ways of reducing costs and improving product quality.
To do this we have to recognise problems, identify solutions and work smarter.
The installation of the Kuhlmeyer machine is a result of all of these.' While the overall justification of the Kuhlmeyer machine was based on it operating across a range of components, one particular fabrication was at the core of that process.
'This particular customer was driving us to reduce costs,' said Jassi.
'The nature of our business is that we work in strategic partnerships with our customers and in doing so we were able to discuss their requirements as part of our ongoing relationship.
We then worked with Ellesco to engineer the ideal solution.' The result is a reduction in weld dressing time on this component from 6h to 3.5h, with the added benefit of consistent quality no matter which of the three shifts is producing the work.
Many of these benefits were evident within 4-6 weeks of the machine being installed.
Carlton Laser Services' operators, who used to carry out these functions manually, have taken ownership of the machine and process and are helping to advance Carlton Laser Services lean manufacturing programme.
Now that the Kuhlmeyer machine is established what was once a bottleneck and a source of concern regarding consistent quality has become an area that is delivering genuine benefits to Carlton Laser Services and its customers.
4/6/2006 8:40:00 AM EST
BIOWIRE
Aspect Medical Systems, Inc. (NASDAQ: ASPM) today will be receiving the 2006 Shingo Prize for Excellence in Manufacturing. The brain monitoring company manufactures BIS(R) technology, the market leading patient monitoring system for measuring the effects of anesthetics and sedatives on the brain. Aspect is one of ten companies to receive this honor and was selected based on diverse award criteria including measures of customer satisfaction, profitability, quality, cost and delivery, lean core operations, and leadership and empowerment of employees. Aspect will accept the Shingo Prize tonight at a ceremony in Covington, Kentucky.
"The Shingo Prize is a prestigious national honor that recognizes our efforts to build and sustain best-in-class manufacturing and operations at Aspect," said John Coolidge, vice president of Operations at Aspect. "We are proud of this achievement as it reflects a shared commitment to lean manufacturing, continuous improvement and operational excellence throughout the entire organization."
The Shingo Prize for Excellence in Manufacturing, called the "Nobel Prize for manufacturing" by Business Week magazine, was established in 1988 to promote awareness of lean manufacturing concepts and to recognize companies in the United States, Canada, and Mexico that achieve world-class manufacturing status. The Shingo Prize philosophy is that world-class business performance may be achieved through focused improvements in core manufacturing and business processes. The Shingo Prize is directed by a Board of Governors comprised of leading representatives of businesses, professional organizations, and academic institutions.
"Aspect Medical Systems has demonstrated a clear commitment to the implementation of lean manufacturing processes and was selected as a Shingo Prize recipient as a result of its consistent track record in raising and achieving the highest standards in manufacturing excellence," said Ross Robson, Shingo Prize Executive Director. "This commitment is an invaluable quality that we believe helps companies realize performance excellence in product quality, cost, delivery and general business results."
In addition to receiving the Shingo Prize for Excellence in Manufacturing, Aspect is also the sole recipient of the 2006 HR Medallion award which recognizes outstanding human resource practices that support lean manufacturing. "The HR Medallion award is an honor that we believe reflects Aspect's relationship culture and a strong value system built on teamwork, creativity and innovation," said Margie Ahearn, vice president of Human Resources at Aspect. "This human resource philosophy empowers all employees to drive for improvements in quality, performance and efficiency and ultimately enables us to implement the lean concept throughout our entire organization to achieve a competitive advantage in the market."
About BIS Monitoring
Using a sensor placed on the patient's forehead, BIS monitoring translates information from the electroencephalogram (EEG) into a single number that represents each patient's level of consciousness. This number - the BIS value - ranges from 100 (indicating an awake patient) to zero (indicating the absence of brain activity). Using the BIS value to guide administration of anesthetic medication, in conjunction with other vital signs, allows clinicians to make better-informed decisions to achieve optimal anesthesia.
About Aspect Medical Systems, Inc.
Aspect Medical Systems, Inc. (NASDAQ: ASPM) is a global market leader in brain monitoring technology. The Company's BIS technology has been used to assess more than 14.1 million patients and has been the subject of approximately 2,300 published articles and abstracts. BIS technology is installed in approximately 69 percent of America's top-ranked hospitals, as listed in the July 2005 U.S. News and World Report ranking of America's Best Hospitals, and in approximately 45 percent of all domestic operating rooms. In the last twelve months BIS technology was used in approximately 14 percent of all U.S. surgical procedures requiring general anesthesia or deep sedation. BIS technology is available in more than 160 countries. Aspect Medical Systems has OEM agreements with seven leading manufacturers of patient monitoring systems. The company is also investigating how other methods of analyzing brain waves may aid in the diagnosis and management of neurological diseases, including depression and Alzheimer's disease. For more information, visit Aspect's web site at http://www.aspectmedical.com.
Safe Harbor Statement
Certain statements in this release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and may involve risks and uncertainties. The Company may, in some cases, use words such as "believes," "expects," "anticipates," "plans,""estimates" and similar expressions to identify these forward-looking statements. There are important factors that could cause the Company's actual results to vary from its forward-looking statements, including without limitation those factors set forth under the heading " Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 , as filed with the Securities and Exchange Commission. In addition, any forward-looking statements represent the Company's views only as of the date of this press release and should not be relied upon as representing the Company's views as of any subsequent date. While the Company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, even if its expectations change. Therefore, you should not rely on these forward-looking statements as representing the Company's views as of any date subsequent to the date of this press release.
Japanese Techniques Are Fueling Growth At Small Eastford Aerospace Manufacturer
April 2, 2006
By PAUL MARKS, Courant Staff Writer EASTFORD -- Not long after he and his partner bought the aerospace manufacturing firm Whitcraft LLC, Jeffrey Paul discovered what a traffic jam is like in this rural town of about 1,600.
He was following a co-worker's car early one morning up County Road, which winds for about a mile from Eastford's only red light at the town's center to Whitcraft's blue-fronted headquarters.
Suddenly, both drivers braked to a stop.
There stood a cow in the middle of the road, Paul recalled. After a farmer shooed it aside, the Whitcraft president and his employee could move ahead to start their day. The plant has about 240 employees, who make parts for jet engines that power the military's F-22 Raptor and F-35 Joint Strike Fighter, and Airbus' super-jumbo A380 jetliner.
It is a curious blend of Windham County outback and 21st-century high technology, said Paul, who during mild weather likes to pedal a bicycle to work from his home in nearby Woodstock.
"I'll tell you, we are spoiled out here," he saidwith a smile. "It is a very neat setting."
The company, which sells to such aerospace giants as General Electric, Rolls-Royce, Pratt & Whitney and Sikorsky Aircraft, is growing rapidly.
Its bucolic setting, 37 miles east of Hartford, belies an up-to-date transformation undertaken by Paul and his partner and best friend, Colin Cooper, who is the company's CEO. The two engineers are aggressively applying "lean manufacturing" techniques at a plant where sheet metal has been turned into aircraft parts since 1960.
The "lean" philosophy, developed after World War II by Toyota Motor Co., has revolutionized manufacturing around the world. It has been adopted by major U.S. manufacturers - including United Technologies Corp. - during the past 15 years or so. "Going lean" involves a relentless effort to cut waste while striving for continuous improvement. Key objectives are speeding delivery and drastically reducing inventory - dropping any action that does not add value for a customer.
Soon after buying Whitcraft in 1998, the two began drawing on experience gained while working at Pratt & Whitney and Sikorsky Aircraft and concepts of manufacturing efficiency learned through an M.B.A. program at Columbia University.
At Whitcraft, the need for an overhaul of the production line was immediately apparent.
"When we walked through the factory when we bought it, there were piles of inventory everywhere," Paul said. "It was the previous owner's desire to save raw materials, but it wound up quadrupling the search time to find things. We saw a company that was producing more parts than were needed by the customer, and they had a lot of money tied up in inventory."
The new owners set out to end that costly practice.
Lean methods call for producing only what the customer needs, and no more. Instead of building a backlog of inventory, lean companies adhere to a "just-in-time" ethic by which orders are finished and shipped immediately.
It is a shift not just in operations, they say, but also in the company's culture.
To drive continuous improvement, lean relies on the expertise of front-line workers, those most apt to spot waste and inefficiency.
For Whitcraft, that has meant a steady move away from the classic "batch-and-queue" manufacturing process in which a company lays in a stock of raw materials - in this case, steel and specialized alloys - and passes it through a series of operations, winding up with many thousands of finished products.
Whitcraft has converted about half of its Eastford workplace into manufacturing "cells" staffed by two to 10 workers. In those areas, pieces are fabricated one by one, from start to finish, by workers who collaborate as a team.
Paul and Cooper have added 60 employees during the past year and a half, a 25 percent increase. They are considering an expansion of the 65,000-square-foot plant next year. They have also made key acquisitions in response to an aerospace market that has rebounded after the three-year, post-9/11 slump.
Two years ago, Whitcraft bought a similar company, Connecticut Tool and Manufacturing Inc. in Plainville, where the workforce since has grown from 50 to about 60. In January, Whitcraft purchased another longtime aircraft parts-maker, the 55-year-old Alden O. Sherman Co. of Norwalk, which employs about 50.
Whitcraft, a privately owned company, would not disclose what it paid for the acquisitions.
Sherman, which sells sheet-metal parts and assemblies to Honeywell, General Electric and the federal government, brings Whitcraft another force of skilled technicians, machinists and engineers, Cooper said.
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That acquisition "made sense for us because it provides Whitcraft with a broader array of manufacturing services to offer our customers," Cooper said. He said that Sherman also has contracts to sell "higher-level assemblies, rather than just the individual components that make up the assemblies" installed on jet engines - a profitable niche that the Eastford plant was not serving.
Implementing "lean" techniques came naturally to Whitcraft's owners.
In the late 1980s, both studied under the late W. Edwards Deming, an early U.S. proponent of management through continuous improvement. Beyond the theory, though, Paul said most valuable was his experience as a manager at Sikorsky's Bridgeport overhaul and repair center for helicopter blades, where he helped lead workers in numerous "kaizen" sessions - Japanese for continuous improvement.
The results convinced him that such techniques could bring dramatic gains to any business. And there was plenty of opportunity at Whitcraft.
Over the years, the new owners found, Whitcraft had inexplicably evolved a production line that deposited finished parts in a room near the front of its rambling, one-story plant. So crates being shipped had to be moved backward to the truck bays.
"One of the first kaizen events that we did was to move the shipping room 175 feet, to the center of gravity of the plant" near the final inspection area and truck bays, Paul said. "We figure we save about 22 miles of people walking every year."
Similarly, they found that the operator of a flatbed laser, which cuts holes in sheet metal plates, walked about 400 miles a year to fetch raw materials, deposit scrap, get finished parts inspected and perform other functions. The man spent roughly two hours of his workday just moving from place to place, Paul said.
That meant the laser - a $470,000 piece of equipment that automatically records "beam-on" time - was in use only about 10 percent of the workday.
"It's not rocket science, but until you examine these processes in detail with these operators, you don't get these kind of revelations," Paul said. "We were shocked."
By reorganizing the workstation, the owners now have the laser operator standing still most of the day and the laser doing more cutting. Paul said the man recently joined a health club to make sure he gets enough exercise.
With Whitcraft making approximately 2,500 types of parts for its customers, the old production system would prove ruinous in today's hyper-competitive aerospace industry, the new owners said. Lean manufacturing, as its name implies, is intended to slim the production process and increase productivity.
It can meet a key requirement of a demanding marketplace, where customers year by year insist on lower prices for aerospace parts.
Frank Johnson, president of the Manufacturing Alliance of Connecticut, said today it is common for major aerospace companies to demand price cuts of 3 percent to 5 percent annually. That is one factor that makes lean production methods a matter of survival, not just of profitability, he said.
"It's imperative for those companies that can implement lean manufacturing to do it," Johnson said. "The only way companies in Connecticut can compete, with the high cost of doing business here, is through productivity gains. The objective is to put more pieces out the door than you did last year, and do it with the same number of employees."
Because "set-up" time when a machine takes on a new task halts the entire production line, Whitcraft has found ways to ease the transition.
Making all dies used on a punch press the same height eliminated the need to recalibrate and then test the machine before resuming work, Paul said. A transition that once took 45 minutes to an hour now requires about three minutes, he said. Workers are trained to think in those terms.
"We want that crew to think like the guys who change tires for Indy cars," Paul said. "They have to change dies and get back in the race."
Of the 6,000 or so manufacturers in Connecticut, roughly a third have embarked on the transformation to lean manufacturing to one extent or another, said M.L. "Bob" Emiliani, a professor of manufacturing and construction management at Central Connecticut State University who specializes in the topic.
Connecticut has been a leader in this area, he said. In fact, the state allocated $2 million last year to train small and medium-size aerospace and defense contractors in lean manufacturing techniques. But Emiliani said, "It turns out there are not a lot of companies anywhere that are getting it right."
The system Toyota pioneered calls for a continuous cycle of process improvement with perfection - zero waste of time and materials - as its goal, he said. But equally important, Emiliani said, is "the respect-for-people principle."
Simply put, that means that workers who have just helped their company figure out how to do the work of five people using only four people should not be faced with job losses. Otherwise, Emiliani said, employees will react by thwarting improvements.
"The problem is too many companies focus just on the tools" for improving efficiency, he said. "But the intent of lean is to grow your business and improve profits and make better lives for your workers."
Whitcraft's owners say the proof of their attitude toward employees is their success in drawing workers from a radius of roughly a 45 minutes' drive from Eastford and investing in their capabilities.
The company has arranged for Quinebaug Valley Community College, based 17 miles away in the Danielson section of Killingly, to offer courses in blueprint reading and "shop math," a practical blend of algebra, geometry and trigonometry, in the plant's conference room.
Jill O'Hagan, who coordinates training for area businesses at Quinebaug, said Whitcraft's commitment is shown by its paying for workers' training. She said the company is wise to offer the 48-hour college courses - and a 2,000-hour sheet metal apprenticeship - because education builds employee loyalty.
"Whitcraft is very career-minded. They want to train people, and they want them to stay," O'Hagan said. "For a company in the middle of nowhere to have as sophisticated a training program as they do is really quite remarkable."
Whitcraft continues to hire for its operations in Eastford and Plainville as it expands facilities.
Last year's revenue of $38 million is expected to reach $52 million this year, the owners said. Profit figures are not made public. However, Paul pointed out that Whitford continues "investing in the business" and spent more than $2.5 million on new machinery, computers and software this year.
In Janurary, Pratt & Whitney recognized Whitcraft with its annual Supplier Gold award. The designation, held by only six companies, is given to vendors that respond effectively to Pratt's encouragement to use lean manufacturing methods.
Beth Schwarz, vice president of supply chain management at Pratt, said Whitcraft has a record of providing the highest-quality parts, delivered reliably on time.
"They embrace these lean practices, and they deliver really good business metrics," Schwarz said. To win the Gold designation, "they must have zero `escapes' - parts that have to be sent back. On-time delivery must be above 95 percent consistently, and that's almost perfect."
Stretching 6 feet across the wall of the Whitcraft boardroom is a chart tracking the flow of materials and information through the Eastford plant. Cooper and Paul said the chart is amended regularly. They said Whitcraft holds regular brainstorming sessions with small groups of workers to better manage five aspects of the business: environmental health and safety, on-time delivery, quality assurance, working capital and profitability.
Waste-cutting solutions can be as simple as moving a case of tools to within reach of a machine operator or as extensive as knocking down the walls of a manager's office, something that was done when it was found that the office intruded on efficient production.
Don Chrzan, Whitcraft's head of management information systems, said that in 1998 the plant had only three personal computers in use, all in the engineering department. Now, six servers on a fiber-optic network connect 120 computers throughout the plant. On any given day, Chrzan said, the system tracks roughly 32,000 part numbers and 2,500 work orders being processed.
"My job is more customer-focused now, [serving] the people on the job floor and people in other companies, too," Chrzan said. The automated system improves decision-making by giving managers instant access to price quotes, purchase orders, work orders and general ledger accounting.
"Our overarching philosophy is that if you give skilled technicians better information, they're going to make good decisions," Paul said. "People here are not shy about opening up and telling you what needs to be done. On Monday, we heard that the tube area needs more space because they have a large order coming in.
"This process has driven dozens and dozens of change events, and this company is unrecognizable, at least on the inside, from what it was."
April 2, 2006
"Lean" manufacturing is a radical departure from the traditional manufacturing process. Companies that "go lean" must learn a new lexicon, including some Japanese terms.
Cell: An arrangement of machines and workbenches for consecutive processing steps adjacent to one another, often in a U-shape, so that parts can be made singly or in small batches.
Continuous flow: Moving one item at a time or small batches through a series of processing steps with little or no pause between steps.
Jidoka: Giving workers and machines the ability to detect problems immediately so that work stops until the cause is found and remedied.
Just-in-time production: Making and delivering just what it needed, when it is needed and in the precise amount needed.
Kaizen: Continuous improvement of the manufacturing process to create more value with less waste.
Muda: Waste; any activity that consumes resources without creating value for the customer.
Right-sized tools: Machines and other process equipment that require little set-up time and are easy to move, suitable for work in cells.
Takt time: Available production time, divided by the number of parts demanded by a customer; used to precisely match production to demand.
Value-stream mapping: Diagramming every step in the flow of materials and information through a plant that is needed to get a product from order to delivery.