Gary was a talented, creative welder with an idea that made perfect sense to him but was not supported by conventional measures. Gary was determined to implement his idea, and pressed for a closer evaluation by his supervisor when the idea was not immediately accepted. This was Gary’s idea:
A particular welded assembly was produced in two stages: a lot of several hundred assemblies were press-fit together in a subassembly department located in another wing and then moved to Gary’s queue for welding. The process made no sense to Gary. It was a push system that spent more time queuing and moving work than actually doing it. “Why not give me the assembly fixture and the parts, and I’ll both assemble and weld the parts as needed?”, Gary asked.
The initial response was from cost accounting: “We don’t want to do assembly in welding. The labor rate is too high.”
Gary persisted: “What about the total cost: the cost of moving and storing jobs, of producing too many at once or alternately of having none on hand when needed because they are stuck in a sub-assembly queue?” Gary also noted the loss of operational availability – his time, the welding equipment’s time, and the subassembler’s time — either over-producing or waiting. “We have better things to do with our time,” Gary said, “and anyway, if you move that fixture to my department, I’ll bet I can improve that process also.”
This time Gary prevailed. Someone was listening, and the whole process was sufficiently contained that the listeners could see for themselves. Unfortunately, Gary’s story is the exception. Here’s the rule:
I met a plant manager, let’s call him Bob, at last week’s Shingo Conference in Cincinnati. Bob told this story:
“We are a highly automated facility. Our product is completed in our plant in the US save for one small final step that requires just a few seconds per piece of manual labor. To save money, they send the product half way around the world by the boat load where the product is completed and then sent back to us for packaging and sale in the states.”
I asked Bob who “they” are.
“Corporate,” he replied. “I tried to talk them out of moving the final operation, but they only saw the cost per piece difference. I pointed out the other considerable costs of quality, inventory and transport as well as the huge delay created in the value stream, but to no avail. Someone in corporate is being rewarded for a fictitious cost reduction while we’re losing control of the manufacturing process.”
“To make matters worse,” Bob continued, “reducing plant labor caused our paper overhead rate to go up. It’s a vicious circle. Corporate is only looking at computer reports, the shopfloor is invisible to them. I think we are all going crazy.”
On October 5-6, 2011, the Northeast Shingo Conference will refute this kind of craziness. With speakers including John Shook, Mike Rother and Alan Robinson, we’ll be rallying forces to demonstrate that products and services can be “Made Lean in America.” Re-shoring leader, Harry Moser, will be on hand together with management and shopfloor leaders from over three dozen enterprises that are “making it Lean in America” – exporting products and services, not jobs.
I hope you’ll be able to join us in October in Springfield, Massachusetts. In the meantime, do you have a Gary (good) or Bob (bad) story to share with us?
Your article is a great example of an important type of visual management: costs. Many costs were invisible in our plant in 2003. We managed to those we could see, direct labor and P.O. purchase price typically. As we implemented lean, we began to see many of those other costs. When confronted with this new reality, we realized the need for change. We layed out our plant in cellular manufacturing and watched our lead time on make to order parts drop from fifteen days to five or less. We drove some waste out of administrative processes, too, such as order entry and material resupply. The result is currently even same day production and shipping of orders, which used to cause sales, engineering, supply chain and plant management to run around the building conducting a series of negotiations begging (sometimes threatening) to get orders out, now look like standard orders. Profits are better in the new environment. Customers are more satisfied. Employees are more engaged.
We will be attending the October 5-6 Conference to share our experiences with others and to learn from other, too.
What can be done to open the eyes for these corporate folks? I once completed a value stream map on a service process. We wanted to improve from one day to four hours. The team came up with some great ideas. The corporate member of the team took all the information we gathered and soon moved the process to another country. The service for the first few months went to 3-4 weeks and finally settled down to a week on average. Customers were not happy. Our customer service department logged many complaints for this “improvement” and the corporate person got a pat on the back. I told my immediate manager I no longer wanted to be involved with projects that were destined for another country. A few months later I was told I had philosophical differences, soon after that I was let go. I am glad I have philosophical differences. Becoming competitive with lean is hard work, I think some corporate leaders rather take the quick and easy or should I say the smoke and mirrors cost savings instead of doing some hard work.