Lean Manufacturing

Your Hidden Factory;
Finding that much needed hidden capacity

A NASCAR pit crew can change all four tires, fill the gas tank, and adjust the air foil in less than ten seconds, so why does it take you hours to changeover your production lines and equipment? In auto racing, a few seconds means the difference between winning the race and not even coming into the money.

Today, manufacturing is no different. If we can’t meet customer requirements, then our competition will. You either win or you lose--there is no in between. We, as customers, don’t wait the way we did in the 1950’s. When the television set dies, we want to replace it right now. We go to our favorite store first, but if they don’t have what we want or can’t have it delivered to our home within the next 30 minutes, we go next door to the competition.

What’s the first thing we do to try and protect ourselves from this situation happening to us? That’s right, hold or build more inventory, but we have inventory—it’s that the darn customer always wants something we don’t have. If only we had a better forecast. No forecasting will be able to tell us when the customer’s television will stop functioning or when the customer is planning on replacing it. After all, do you know when you are doing to replace your television, and have you given your favorite television dealer that information so he can be prepared for you?

One way for us to get around building the wrong inventory is by having a lot of production capacity sitting around waiting for the customer to demand an item. With all this extra capacity sitting there, we can quickly produce what the customer wants.

But if we look hard enough, we will see that we have sufficient capacity--we just are not using it efficiently. Those 2-hour and 4-hour setups or changeovers are eating up valuable capacity. As a young Industrial Engineer, my job was to perform time studies and improve production. In the four years as a stop-watch carrying Industrial Engineer, I never once studied, looked at, or challenged the setup or changeover times we used to have in the system.

Until the middle 1970’s, the American automotive industry would shut down production of the current year’s models for at east three weeks while they changed over to the models for the new year. Just think about that: They lost an entire month’s production capacity while they changed over their production lines. Toyota Motors taught us the lesson of Single Minute Exchange of Die (SMED). While we continue to struggle with this concept, Toyota is working on reducing changeover time to less than one minute.

Changeover is totally a non-value added exercise. Not only do we lose production capacity, we pay for hundreds and thousands of hours of non-productive, non-value added labor.

One company I know of had a simple operation that required an average of two employees working for twenty-seven minutes (54 labor minutes) to changeover from one product size to another. After one day of training and several hours of brainstorming, the employees re-designed the changeover process, spent a couple hundred dollars on new tooling, and dropped the changeover to one person working for about 45 seconds.

A company producing and packaging artist paints had a four person crew manually controlled packaging operation. Because artist paints come in so many colors and types of paints, the quantity of any one paint going through this packaging operation was between five and ten gallons. Total production time per five gallons of paint averaged less than 30 minutes, while changeover ran from 35 to 45 minutes.

Within three days, the team had this changeover reduced to less than ten minutes. This amounted to a 75% increase in production from this line. The success recorded on this line led to a full examination of all changeover operations throughout the company. The other two manually-controlled liquid paint lines were next, followed by the more complex, automated fill line.

A ball bearing manufacturer spent two and one half hours changing over their ten centerless grinders. A little bit of organization and a simple (customer built) computer program reduced the changeover time to 20 minutes.

A stamping and forming company in Connecticut reduced changeover time on a stamp and form power press from over two hours to less than ten minutes. They looked not only at the labor savings from reducing the time reduction, they also concentrated on the additional capacity which was made available and the additional production made possible without increasing their total labor expense.

Changeover time reduction is among the least costly, least time-consuming, production improvements a company can undertake, and yet, it is one of the least to be considered. Too often we look only at the labor dollars saved and not the more important additional production capacity, additional sales, and additional revenue--all without increase total labor cost.