This is a touchy subject for me to embark on. If you have been following my articles you know that I am not a proponent of automation as the first course of action when implementing a continuous improvement strategy. I am not opposed to automation or the use of technology to improve productivity. However, I believe the evolution to automation or increased use of technology should be preceded by a strategy that maximizes existing resources first.
There are a couple of good books that address the logical progression toward automation and technology. One is titled, “Toyota Production System – Beyond Large Scale Production” by Taiichi Ohno, and the other is “The Machine that Changed the World” by Jim Womak, et al. Both books tell about the emergence of the auto industry in Japan after the manufacturing infrastructure had been decimated during World War II.
Efficiency vs. productivity
Japanese manufacturing was virtually non-existent at that time, while manufacturing in the United States had developed to unprecedented efficiencies. But, efficiency and productivity are not the same thing. Efficiency is simply a measure of how well a process performed against an established standard. Productivity is a measure of how much value was created in the time that was available. A process can be efficient while not being productive.
For instance, if the standard for a process is 10 parts per hour, and the actual output was 15 parts per hour, one could logically conclude that the process achieved 150 percent efficiency. However, if the internal customer’s process wasn’t capable of consuming 15 parts per hour or external customer demand didn’t require 15 parts per hour, then the efficient process was actually overproducing and thus not making the most productive use of the time available.
Doing more with less
While US manufacturers spent time learning how to produce a lot of things efficiently the Japanese focused on being as productive as possible with what little resources they had. The crisis of World War II forced Taiichi Ohno and other innovative and creative managers to get outside the box of conventional thinking and redefine what was really important to becoming an industry leader. As has been demonstrated over the decades since, the Japanese automotive industry has led the world in quality, throughput, cost, and productivity. Have they embraced automation and technology along the way? Of course they have, but only when it fit their strategic business model.
The flattening global marketplace has created a different type of crisis for domestic manufacturers of all industry types. As you are well aware, the furniture industry is the latest to feel the pinch from the Pacific Rim and many are finally beginning to embrace lean thinking. For the most part cabinet manufacturers haven’t felt the heat of overseas competition, but the lackluster economy is causing a double crisis for them. Manufacturers are finding a smaller market to share plus a customer base that is becoming more quality and price sensitive.
Demand for my consulting/facilitation services has ramped up considerably since early 2012. In previous articles I told you about the transformation that is taking place at Brad’s company where throughput has increased 4 times while manufacturing space has decreased by 50 percent. Those results have been achieved without increasing staff or adding new technology. I need to qualify though that Brad had two pieces of automation already in place at the beginning of the transformation – a beam saw and a point-to-point router. He purchased them assuming they would drive the throughput improvements he was seeking. His staff is now learning how to maximize those resources.
Two other ongoing transformations are netting results similar to Brad’s. In one case, inventory has been reduced by 50 percent while throughput has increased at the pacing process by 40 percent. At the other company, throughput is increasing to twice the initial level and will likely increase three times before leveling off. Again, the increases have been accomplished utilizing existing resources. I will begin facilitating the lean transformation at another cabinet and millwork company soon to help them improve productivity and grow the business. This latter story will be showcased in this new series on automation and technology.
I have decided to focus on this company because the approach the CEO (I’ll call him Joe until he grants me permission to use is real name) employs in the use of automation and technology sets a great example for others to follow. His philosophy is that no automation will be put in place until it can be seamlessly linked to the engineering support function. Like Brad’s company, this company uses a beam saw and CNC router. That’s where the similarity ends.
Brad relies on the equipment operator to program jobs at the machine, while Joe insists that all of the engineering work be done before the job enters production. This difference means that Brad still isn’t maximizing his equipment resources so more improvements might be on the way at Brad’s shop. Joe recognizes that even though he is better utilizing the equipment by doing the engineering from the front office, there is still room for throughput improvement by employing lean thinking.
Innovation with iPads
Joe is using iPad technology in an innovative and creative way that I have never seen before, and hope to be able to share with you in future articles. Almost everyone at Joe’s company has an iPad and the devices are used to access everything there is to know about every customer order including shop drawings, purchase order status, field site information, job specific questions and issues, and much more. As an order progresses through the plant the status is updated and everyone with an iPad knows where the job is and the anticipated completion date. What a dynamic tool.
Joe is blending automation, technology, and lean thinking in a way that should truly maximize his company’s resources and position them so far ahead of the competition that growth within their market segment should be limitless. I look forward to sharing this recipe for success with you. Can you guess where Joe’s lean journey is going to begin? That’s right, we will begin by establishing a good foundation through Workplace Organization.
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