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Recent Blog Posts

Is Lean Manufacturing in the Job Shop Undergoing a Transformation?

As a small job shop owner, I’ve always looked at lean manufacturing as a collection of management and manufacturing tools unified by an overarching philosophy. However, what Toyota may have developed for a large, integrated manufacturing company does not always translate well into a job shop environment. I’ve felt that in a job shop, you need to pick the appropriate lean tools or your lean implementation will fail, as the shop floor quickly decides on the relevancy of any program introduced to change the manufacturing environment. If the tools make sense, they will be embraced. Doing this, we’ve successfully employed a number of lean tools over the past ten years. You can pick from the lean buffet if you know what you want to do and how you will measure the results. 

In the past few weeks, I’ve read one article on the changing economy’s negative impact on lean, another on the need for small companies to focus on agility instead of lean , and then an argument against both these opinions. I am a firm believer that lean manufacturing needs to adapt to the circumstances, not the other way around. Lean principles and philosophy can be applied in many different environments, but the use of lean must evolve from first principles to fit that environment. The same concept should also be applied to six sigma and theory of constraints, both of which we also employ at Graphicast. In our operation, we use theory of  constraints as our overarching management philosophy, with lean and six sigma methods employed to reduce waste and process variation. We use throughput accounting methods as our mangerial accounting platform to measure the financial impact of our changes.

I’m pleased to see people openly discussing the difficulties of employing “big company” methods in the job shop, and the need to adapt these methods to the small shop to gain the greatest benefit. We need more voices in this discussion,

Graphicast Again Named Among the 10 Best Small Companies to Work for in New Hampshire

Graphicast was again named among the 10 Best Small Companies to work for in New Hampshire by Business NH Magazine. For the fifth year in a row, Graphicast’s culture and employee benefits made it one of the prime employers in the state. “Even in these tough economic times and with the sluggish recovery, I think we’ve maintained a consistency that resonates with our employees. Our employees are loyal and recognize the efforts we’ve made to keep things as normal as possible.’”

Kiva Systems’ Robots are Invading Warehouses

Kiva Systems, one of our favorite customers. was the subject of a recent article in Business Week magazine. Kiva manufactures robotic systems for warehouses. Based on traffic control software developed by Kiva, dozens of robots can simultaneously operate in a warehouse, picking items, and bringing them to stations where orders are consolidated for shipping. The system is also self organizing; it keeps track of frequently picked items and moves them closer to the consolidating areas to reduce transit time. These systems reduce worker fatigue and give the operators the ability to handle more volume, an especially important factor during the holiday shipping season. Congratulations to our friends at Kiva for this most recent recognition.

Manufacturing Capacity Utilization is on a Steady 40 Year Decline. Will This Recovery Buck the Trend?

In looking at manufacturing capacity utilization trends over the past forty years, a sobering realization emerges. As expected, capacity drops during a recession. But for each recession, the ensuing recovery brings manufacturing to a capacity level lower or no greater than the peak preceding the recession. This trend continues, recession after recession. From a high of 89% back in January of 1967, capacity utilization is now at about 75%. In the last ten years, the highest it’s been is about 82%, in November of 2007. At the bottom of the current recession, capacity was about 68%, the lowest in the past forty years.

A very high capacity utilization rate can fuel inflation and lead to late orders and lack of agility; it is not necessarily a good thing.  Surprisingly, a low utilization rate can be beneficial. Companies can be more responsive and agile to demand because they have the excess capacity available. However, this works only if you recognize the opportunity and have the means to put the capacity to use – cash for growth and skilled labor to run the capacity. For many small manufacturers, both are currently in short supply.

It will be interesting to see if US manufacturing can use the current low utilization rate to increase market share and improve agility. If it can, it will be bucking the trend of the last forty years. Such a reversal of the past would indicate that manufacturers are wisely looking at their market opportunities  and manufacturing abilities, not just blindly playing a numbers game of cost reduction and capacity abandonment.

From the Field – Manufacturing is Ready to Roll

Graphicast participated in two trade shows last week, one in Marlborough, MA and the other outside of Toronto. That this was the first time we attended two shows at the same time is, in itself, an indication of the activity level in manufacturing. The view from the show floor was an even better indicator of the market. Both shows were very crowded, even over the lunch period, and the interest level was very high. This was not a week for just getting out of the office. Our reading is that manufacturing in New England and southern Ontario is coming back quickly, and with lots of energy. There is definitely interest in on-shoring production that had been sent overseas, and lots of new products ready to hit the market. We are following up on leads this week and will have all our sales people out of the office making calls; another sign of interest and a reboundin market. 

We’re also seeing this rebounding  in shipments. Our September shipments were the highest in two years. The only downside is the volatility of the activity. The trend is up year to year, but on a month to month basis we seem to be in the three forward, one backward mode.

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