We will soon begin facilitating the transformation process to the Lean Business Model at a millwork shop led by a visionary CEO, one who recognizes the long-term dynamics of engaging his staff in lean thinking.
 
I invite you all to join us on this new journey of discovery. The assessment has been completed, but there are some valuable lessons that you can learn by going through that process with me as I explain what we discovered.
 
Before we get started I want you to get up out of your chair, get pencil and paper, bring this article along, and let's head for gemba. For this article we will begin on the production floor. But remember, gemba is where the work gets done, and there are as many opportunities for improvement in the administrative functions as in manufacturing, maybe even more. This is going to be the most informative and revealing hour you have ever spent in your business. Let's go.
 

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Inventory issues

The first thing we look for in an assessment is the level of raw material, work-in-process, finished goods, and obsolete inventory. There are a number of reasons to begin with these observations. The most important reason is that inventory represents money that has been taken out of the cash flow with an unlikely timely return. In other words, cash flow is constricted by inventory that usually winds up being carried for a longer time than necessary. Inventory also requires storage space, which is always in short supply, and it causes processes to have to be further separated from each other to accommodate it.
 
Take a look at your sheet-stock inventory. Can you see the different types and thicknesses of materials that are stacked on top of each other? Do you see bunks of material staged in front of other bunks of material? What do you suppose the warehouse person has to do to get at the materials on the bottom of the stack or the bunk of material against the wall?
 
He is going to have to waste time moving loads around to get what he needs. In the process he will either stack the unnecessary materials in front of something else or he will move it back where it was, which is probably not where it should be. All of the unnecessary movement of loads takes time, costs money, but doesn't add any value to the product that is going to be produced. What to do about this situation will come later. You are not in the solution stage while in gemba, you are simply gaining an appreciation of the interferences, obstacles, and barriers that are preventing the company from achieving the objectives you desire.

Work in progress

Next let's take a look at work-in-process. Take up a position near the saw, the CNC, or the edgebander. It really doesn't matter where you are positioned, you will see the same results of the current process. In this case there are gravity conveyors between each of the above processes for staging work. The idea of the conveyor was to make it easier to move loads from one place to the next. You might be using shop trucks, A-frame carts, or maybe shop-built carts for special usage. In any case I am betting that all of the conveyors are full, and carts are parked in any open location on the floor. I would also bet that if you query the staff for improvements suggestion you might see needing more carts as one of the recommendations.
 
Take a good look around. Is the product moving in a smooth, orderly fashion? Are jobs moving in the order you perceived when they were originally released to production? Are some jobs being reprioritized and expedited? Are there partially completed units sitting somewhere waiting for further disposition or waiting for vendor parts to catch up with them?

Consuming money and time

If yours is not a lean shop, I would bet you a free consultation that you are seeing exactly what I am describing. Don't get me wrong, I am not knocking your operation. Obviously you are doing a lot of things right, but there is always room for improvement. I have yet to see a non-lean shop that is essentially a warehouse with a little manufacturing going on in various disconnected locations.
 
Every cart, truck, or conveyor section that contains in-process materials represents money and time that has been consumed without realizing a return. Excess inventory is one of the reasons your lead time is so long. It is also the primary reason you are borrowing money to support the material needs of the manufacturing beast, and thus you are not making any money for yourself.
 
Take a good look at the saw operation for instance.  Is there work staged between the saw and the edgebander or the CNC machine? How much work is already staged? Is it moving to the next process smoothly? No? Then why is the saw operator still cutting materials? Don't you think his time might be better spent at one of the downstream processes that seem to be overwhelmed with work that isn't flowing smoothly? Remember, this is not problem solving time, but the wheels of your mind should still be grinding out options for improvement.

Assembly waste

There are a series of pictures here that represent an assembly process. As you can see, there are parts scattered around the assembly area in every open space available. The parts were cut on the saw, run through the CNC, and transported to another part of the building in large batches that far exceed the builder's current need for work. The materials are going to sit for several days and will undoubtedly wind up in somebody's way.
 
The parts are sub-assembled at a bench against an outside wall and then the sub-assemblies are moved - by two people - to a location in the middle of the building. After they sit in this temporary location for a while they are moved to the final assembly location, which happens to be right next to the sub-assembly bench.
 
After final assembly the units are again moved by two people to a different location in the middle of the building. After a few of the assemblies have been staged they are moved by two people to the loading dock. Can you see all of the waste that is taking place because excess inventory has been allowed to accumulate in your production area?
 
This article is going to end for now, but don't leave gemba quite yet. Spend some quality time observing and absorbing what really happens in your shop. This is the only way that you will fully appreciate and understand the value you will receive through a lean transformation.
 
Inventory is money. Labor is money. The more inventory you have in various stages of completion the more money you are not able to use for other purposes. Inventory also consumes space, it requires management and tracking by some means, and it is always susceptible to damage, and even worse, the longer it sits in process, the more susceptible it is to being cancelled or changed by the customer.
 
We will continue this journey in the next article because it is important that you understand how to quantify the improvement opportunities you are observing.
 
All of this material will be covered in greater detail at Wood Pro Expo 2015 in Baltimore. Please plan to join us there.

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