Friday, August 16, 2013

Partners in Crime: Lean Manufacturing and Innovation

Talking with manufacturers around Michigan, when many individuals hear the word “Lean,” they automatically think “to cut.” Especially during a recovering economy, Lean manufacturing topics are commonly discussed. It’s to the point where the perception of Lean is that you get rid of everything left and right….just reduce your expenses and improve your profit margins….that’s all that Lean is, right? People typically don’t think of the word “growth” when they hear “Lean.” We want to change that perception.
Is there some truth to Lean’s perception? Sure. As manufacturers, it is certainly beneficial to “cut” unnecessary expenses. However, Lean doesn’t just mean to “give everything the axe.” Lean is about reducing the right things, processes and expenses that don’t add value to your customers. It’s about becoming more efficient and effective so that you can become more productive and profitable.
Conversely, when people hear the word “innovation,” they tend to associate it with “growth.” The perception is that innovation means coming up with new ideas and new products to enter new markets. Again, is there truth to this perception? You betcha! Innovation is the key to new product developments.
Imagine putting the power of efficiency (Lean) behind the creativity (innovation) of new products. . These two concepts actually work hand-in-hand for forward thinking manufacturers. Simply put, innovation isn’t just about growth (although, that is the ultimate goal)… innovation is about finding new approaches to solve problems. As defined by Wikipedia, “this is accomplished through more effective products, processes, services, technologies, or ideas.”
We use innovation to become more Lean, and lean to become more innovative. Trying new ways to develop more efficient processes is very innovative. For example, if you have trouble meeting demand or are seeing a rise in production costs, adopting lean principles would be innovative. You would be trying something new, to solve your problem. Saved resources could then be invested into more strategic initiatives… new product developments, R&D and other business initiatives that help drive growth.
The Urban dictionary defines Partner in Crime as “your significant other; someone you can depend on to help you get $&!* done.” Moving forward, think of Lean and innovation as partners and consider the positive impact it can have on your business. For a list of our Lean business solutions, click here or contact us at 888-414-6682 or via email at
 Image Source: LSS Academy.

Friday, August 9, 2013

5 Ways to Unlock the 'Hidden Factory' and Improve Capacity Without Huge Expenditures

Several recent articles surfaced surrounding Michigan manufacturing. American Axle needs 200 new workers, 100 more than originally anticipated . . . . .A Holland manufacturer set for $9 Million expansion, is adding jobs . . . Chrysler Group plans $52 Million dollar expansion . . . and so it grows. The only dissenting voice appears to be from Ford, which in the same email alert, says new plants unlikely. It’s not that Ford’s not growing, they are. The article indicates that instead of new plants, they are raising assembly speeds, adding shifts, and in some cases, buying new equipment and hiring more workers.

This works great if you’re part of a large corporation, such as American Axle, Chrysler or Ford, with the proverbial ‘money to burn’. Sometimes tax abatements and long-term commitments to the community can muster support and pave the way for expansion and capital expenditures, especially if you have a large order from a new customer in hand. It’s just not that easy if you’re a small to medium sized enterprise, particularly if you’re lucky enough to have a steady workload.

What if there were actions you could take to increase your capacity with a nominal investment?

MMTC has identified five areas that typically offer opportunities to increase capacity. Some will be familiar, all will be relevant to manufacturing. Hopefully, this will generate ideas and help focus activities when looking for throughput improvements, especially when you have limited investment dollars.

1. Quality. We all think of defective parts as a bad thing – it is waste in the plant or, if shipped, a failure in the field. But what we sometimes miss, and something that should provide an additional incentive to investigate and solve quality issues, is the fact that a bad part consumes available capacity.
So you get hit twice: You have the traditional expense associated with a defective part: rework, scrap, warranty claim, etc., and you have the added loss of your available capacity because at least some of it was consumed making a bad part. And that is capacity you can reclaim by reducing defects.
2. Equipment Utilization. Here we mean more than just keeping the equipment up and running. It’s good to have equipment available, but it’s just as important to make good parts (see our Quality comments in point 1) and to produce them at the expected rate or cycle time.
To see if improving machine performance is a significant opportunity for you, pick one of your pieces of equipment and answer these two questions:
  • How many good parts did I make during the day?
  • If we had been up and running perfect parts all day, how many parts could I have made during the day?
If that ratio is 75% or less, you can benefit from looking at your Equipment Utilization.
3. Product Flow. This is more than reviewing how material moves from work cell to work cell. We are also referring to the way the total product flow is managed, i.e., how do you run the product line?

Oftentimes, you can realize improved performance by analyzing the specific process elements, changing layout, and adjusting tasks, to better promote material flow. And secondly, optimized flow is achievable by managing production lines with specific attention to bottlenecks.

4. Scheduling and Execution of Work Orders. This is another area where a two-pronged look is beneficial. There are three things you need from a Scheduling and Execution system:
  • A schedule that reflects realistic throughput expectations
  • A disciplined floor that executes to the work order
  • The effective use of tools to optimize flow within the framework of meeting delivery commitments
One of the goals of a good scheduling and execution process is predictable throughput. If you can get to that point while not losing sight of optimizing the flow, you can realize significant increases in capacity, and by that we mean making the right stuff at the right time.
5. Support of Production. We typically see two supporting elements as providing opportunities for capacity improvement.
First is a close examination of suppliers, their performance and capacity flexibility. It doesn’t do much good to bump your capacity up when your key suppliers can’t keep pace.
Second is the Production Preparation Process for new or upgraded products. This would include both the product design (for manufacture and assembly) and the process design (the best arrangement of resources, tools, etc.).
By looking at the activities in the five areas covered, you may discover opportunities for improving capacity and discover what is called ‘the hidden factory’, i.e., additional, hidden capacity that you can realize without a significant investment.

To delve further into these issues, MMTC is offering a no-cost 90 minute workshop, as part of our Eye-Opener Summer Series. We support Michigan manufacturers and want your operations (and legacy) to continue and grow in Michigan. August’s offerings will be held at partner locations in Lansing and Troy.
For more information and to register, please visit our event registration website and look for Eye-Opener under Special Events.

Friday, August 2, 2013

Proud to Manufacture in Michigan: Manufacturing Matters

A couple of years ago, MMTC created the Proud to Manufacture in Michigan campaign. The objective was simple: we wanted to promote the importance of manufacturing in our state and highlight the contributions of our local manufacturers. Michigan’s manufacturers were encouraged to display the official Proud to Manufacture in Michigan poster and we launched the first-ever Proud to Manufacture in Michigan Conference and Celebration.

Shortly after, MMTC launched the official Proud to Manufacture in Michigan program. The program includes an online directory of participating Michigan manufacturers. Social media platforms on LinkedIn, Facebook and Twitter were created for local businesses to network and discuss important issues. Member manufacturers (who joined at no cost) were also provided with a logo, certificate, subscription to the program’s monthly newsletter and access to special offers and tools, including this manufacturing blog.

So what’s with all the hoopla about Michigan manufacturing?

Manufacturing is more than about Michigan pride; the industry is vital to our state (and nation). Take some of these statistics from an infographic released by NIST MEP:

  • For every $1 of goods produced, manufacturing generates an additional $1.43 for the economy
  • Each manufacturing job creates at least 2.91 more jobs in other sectors
  • In just 5 states alone, manufacturing adds over half a trillion dollars to our economy
  • Manufacturers are responsible for almost two-thirds of all private sector R&D

As you can see, manufacturing growth benefits our entire economy. And now is the perfect time to discuss the importance of manufacturing… momentum is building in our sector!

Just yesterday, the Institute for Supply Management released positive news. The Purchasing Manager’s Index (PMI), which gauges growth in the industry, rose to 55.4. Numbers above 50 signal growth and this was the highest level in nearly two years! A recent article by CNBC noted that Michigan is the U.S. leader in manufacturing job creation. From December 2009 until March of 2013, Michigan led the nation by creating an estimated 88,100 jobs for our economy.

proud to manufacture in michiganAs momentum continues to build, we are proud to host the second annual Proud to Manufacture in Michigan Conference! The conference brings together owners of Michigan’s small to medium-sized manufacturers from across the state to discuss the critical business issues of the day. The event will feature excellent keynote speeches and panel breakout sessions where manufacturers will share their successes in key areas. New in 2013, this year’s conference works to promote manufacturing to tomorrow's workforce. Area students have been invited to attend the second day of the conference. There will be 50 workforce-aged students participating in a special "Speed Dating" exercise with attending manufacturers, providing the opportunity to discuss the advantages and realities of an exciting career in manufacturing. Click here for more information!
Remember, success in the manufacturing field means success for our economy. Spread the word: Proud to Manufacture in Michigan matters!