I first met Shigeo Shingo at Utah State University’s 14th Annual Productivity Conference in the spring of 1989 where he was receiving an honorary doctoral degree and at the same time lending his name to the Shingo Prize for Operational Excellence. Speaking through a translator, Dr. Shingo began with a short greeting to the audience of about five hundred attendees, mostly educators, and then launched into an explanation of his SMED (Single Minute Exchange of Dies) system. “Every changeover,” he declared, “can be reduced by 59/60ths.” Using thirty-five millimeter slides (remember those?) he proceeded to describe recent examples of SMED – some even at US manufacturers – to demonstrate how relatively simple improvements had generated huge reductions in set-up time, from hours to less than 10 minutes. Shingo then explained why set-up reduction was critical to TPS – the principle behind the tool:
“Provide the customer’s (internal and external customer) exact requirement immediately with perfect quality.”
Shingo went on with quick review of EOQ, economical order quantity, a conventional formula to calculate the “optimal order quantity” for produced inventories by balancing the fixed costs per lot produced against carrying costs. Typical application of this model had treated changeover time as a fixed cost without opportunity for significant improvement. Shingo’s genius was to demonstrate that radical improvement to changeover was not only possible, but it was easy. His ideal was to reduce EOQ to 1 piece. But Shingo’s book, SMED, had been published only three years before his 1989 presentation; neither the tool nor the principle behind the tool was well understood in the US at the time. The case studies in Dr. Shingo’s presentation were those of early adopters. Particularly for the many academicians present at the conference, Shingo’s ideas represented new thinking. Shingo now took aim at them with this admonishment:
“Today there are twenty thousand doctoral dissertations on economic order quantity, but not one on SMED! Why? Because SMED is too simple and does not make good fodder for doctoral theses.”
The audience responded with nervous laughter, guilty as charged.
I laughed nervously too, having installed a deluxe MRP system several years earlier. Economic Order Quantity was just one “order modifier” from my long MRP menu: AQL, safety stock, lot-size, pan-size, N-days supply, order point, yield, fixed lead-time and variable lead-time to name a few. Together, these various modifiers were intended to fine-tune resource availability. In actuality they mostly obscured actual need and compensated for waste through pyramiding inventories. In 1989 my company was still dabbling with set-up reduction, happy with a 50% set-up time reduction, mainly from better preparation, but not yet clear how to achieve the single minute goal. We were not able to provide the customer’s exact order immediately. As I listened to Dr. Shingo, I recall at first making “we’re different” excuses to myself. It was embarrassing to confront my closed-mindedness. Mr. Shingo once wrote, “The face we see least often is our own.” This was one of those moments; Shigeo Shingo forced me to confront my own status quo thinking. I decided to suck up the excuses and find a way to make 59/60ths work at my plant.
The subtitle to Shingo’s book on SMED, “A Revolution in Manufacturing” does not overstate the significance of Shigeo Shingo’s contribution. In fact, quick changeover practices are now present in administrative and clinical processes far from the manufacturing floor. For organizations that have employed SMED, the outcomes have been revolutionary. Regrettably however, in 2011 many organizations continue to struggle with the “we’re different” challenge, failing to gain the benefits of the technique and the principle behind it. If your organization is stuck in this rut, I strongly recommend that you do what I did in 1989: Attend the Shingo Conference. It’s coming up in March. Go get inspired!
Pingback: Optimize This « Old Lean Dude
Pingback: Shingo’s Network « Old Lean Dude
Pingback: Cracked | Old Lean Dude