Getting Lean: Companies employ efficient techniques

But not Edmonds Dental Prosthetics Inc., which won the award in 2005.

“After winning that award, we said, ‘Where do we go from here?’” said Edmonds Dental President Bob Edmonds. “It’s about continuous improvement, and we’ve got to live up to the reputation that got that award for us.”

The opportunity for company improvement presented itself when company executives saw a presentation espousing the advantages of lean manufacturing.

“Lean is a systematic means of identifying waste – activities that don’t add anything a customer would be willing to be pay for,” said Harold Zinn, vice president of Missouri Enterprise, a private, St. Louis-based not-for-profit that teaches lean manufacturing as one of several techniques to help small- and medium-size companies. “For example, if you have to move a part four times before you assemble it, would the customer really be interested in paying to have that part moved four times? This gives a systematic way of eliminating that extra waste.”

Edmonds Dental has been using the services of Missouri Enterprise for nearly five months for just that purpose. Edmonds said that once Zinn’s organization had helped his company put together a value stream map, the first step in the process (see box at left), it became clear where inefficiencies could be corrected.

Even though the company is in the infancy of its lean transformation, Edmonds said some of the first corrections, such as breaking large orders into smaller parts to create a continuous flow of work rather than a stop-and-go environment, are already bringing dividends.

“To put a definite dollar amount or time savings on it (this early) is hard,” he said. “But with the small changes that we’ve made, we can already tell a difference in the way work is flowing through the company. At a minimum, we’ll be able to cut our production time in half.”

Edmonds said his company has so far invested $40,000 on the process, though more will be spent in the coming months.

Lean is different

Missouri Enterprise’s Zinn, however, is quick to point out that efficiency does not equal a smaller work force.

“In truth, companies who go through a lean transformation often find that their work force increases because they become a better company,” Zinn said. “Their customers like what they do better, or they can bid on different projects because they have freed up floor space. It’s a misconception to think that this is just to lay people off.”

The key difference between the lean process and other methods of efficiency training is the customer-centered approach, rather than focusing on what the company wants to do.

“If you look at it from the perspective of the customer – who’s paying the bills – they may say ‘We don’t care if you do that. That doesn’t make your product or service any better for us,’” Zinn said. “It’s all about identifying (and eliminating) activities that don’t add things a customer would be willing to be pay for.”

Shift into high gear

Carlisle Power Transmissions got involved in lean manufacturing at the behest of one of its largest customers – John Deere – in November 1995.

Gary Tombridge, Carlisle’s quality manager, said John Deere wanted its largest domestic suppliers to become faster, more efficient and more flexible. So Carlisle called Missouri Enterprise.

“We’re required to put together a program with John Deere that addresses their products and processes, but we get the added benefit of applying that across the spectrum of everything we produce here,” Tombridge said. “John Deere gets a faster, more efficient supplier that can get products to them on shorter notice, and we can apply those tools to other parts of our company.”

Efficiency is the name of the game – especially in manufacturing, where the impact of global competition grows on an almost daily basis.

Rita Needham, executive director of Springfield-based Southwest Area Manufacturers Association, said American manufacturers already face a disadvantage. She cited a December 2003 study by the National Association of Manufacturers, which compared U.S. manufacturers with their nine major foreign competitors and found that American companies face a 22 percent cost differential in making their products.

“Anything (American) manufacturers can do to help their bottom line, and become more cost-efficient, can make a huge difference for them,” Needham said, noting that the plastics and telecommunications industries, as well as companies that rely heavily on metal work, are most affected by foreign competition. “The edge we have in America is in our productivity. The lean manufacturing process helps manufacturers learn to do things more productively.”

The Lean Process

No matter which company is involved or what it manufactures, the lean process begins with a value-stream map.

The process involves mapping the flow of information, including product demand and placed orders, moving one direction, while the product flow is examined in the other direction.

The map looks at efficiency at each step along the way – stored inventory, the dependability of machines performing each task, unnecessary down time – and shows places where that efficiency can be improved.

While the program takes months or even years, depending on the size of the company involved, the results are almost immediate.

Gary Tombridge, quality manager for Carlisle Power Transmission, said “nonvalue-added time” has been reduced by 6 percent in a matter of a few months.

“We reduced work-in-progress inventory in one area by 50 percent, and in another area by 40 percent,” Tombridge added. “That’s significant because there’s tons of money tied up in work-in-progress inventory.”

The process never really ends, though; Tombridge said the goal is to reach “critical mass,” so that the process “takes on a life of its own and doesn’t have to be pushed.”

It’s Not Just for Manufacturers

In fiscal 2005, Missouri Enterprise clients saw a 33-to-1 return on investment on actual Missouri Enterprise projects reported to a third-party research firm.

The not-for-profit organization, however, wants people to recognize that the techniques that manufacturers have used since the days of Henry Ford are being applied to all aspects of business – one reason Missouri Enterprise Vice President Harold Zinn said the process is increasingly referred to as lean enterprise.

“Lean has implications in the front office,” Zinn said. “Lean office does similar things – seeing how many times a piece of paper is touched and how many times it adds value for the customers. It can be put into distribution. It looks at, if you have to move an item between three different trucks, is that added value.”[[In-content Ad]]