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Posts Tagged Lean Manufacturing

Global Success – a tale of innovation and rebirth in Indian manufacturing

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

I had the great pleasure of spending most of the last two weeks in India. My wife and I were invited to attend the wedding of the son of a former work colleague. Besides the chance to spend time with an old friend and to absorb the fantastic cultural experience of an Indian wedding, we also toured many of the famous sites throughout the country. An added treat was a plant tour of my friend’s company, Pradeep Metals, Ltd. Started with his father over 30 years ago, the company has evolved from humble beginnings to become a world class supplier of nuclear grade steel forgings. This journey involved a dramatic change in markets served, additions of many quality standards, an ongoing lean manufacturing effort, constant reinvestment in new equipment and methods, investment in his employees, and a commitment to social responsibility. You could tell this story in any industrialized country and instantly identify the type of company this is – a modern, progressive manufacturing company committed to customer service and employee empowerment.  This level of sophistication is not unique in Indian manufacturing. This level of energy is also not unique.

Throughout India, in addition to the many palaces, forts, and monuments such as the Taj Mahal, you can feel an incredible energy. You see the little stores packed on top of each other in the crowded cities and in the smallest towns. A whole nation of entrepreneurs at work, with few breaks or downtime.  The roads are packed with trucks, cars, scooters, camel carts, bicycles, pedestrians, and the occasional cow or monkey. You’ll see a hand operated water pump next to a bank of solar cells. Universities advertise their degree programs on billboards along the highways. While you can’t escape the broad contrasts of luxury hotels located next to people living in the streets, there is a surging economy gradually making life better for many in this country of over 1 billion people. There are challenges of bureaucracy and corruption working against growth, but not enough to stop it. With a well educated work force, a familiarity with western business practices, and the rule of law prevailing, this seems like a country well positioned to be a focal point for expanding global businesses. I saw a huge difference in the country since my last visit of twenty years ago. I left feeling that even greater changes are at work and India is poised to be a major player in the global economy.

Go Big or Go Home!

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

Go Big or Go Home. This was the title of an article by machine tool builder Mori Seiki about one of their customer’s decisions to buy some large pieces of equipment to give them a competitive advantage. The concept relates to much more than machine tool size.

In manufacturing, continuous improvement is a mantra of the Lean Manufacturing crowd. Small, steady steps in improving your day to day activities can lead to increased productivity, elimination of waste, and improved profitability. However, making a decision to employ these concepts in your company is not a small step. It is a big decision. It is a major cultural  transformation and a multi-year, if not a permanent commitment to a new operating philosophy. Going Lean is going big. The same could be said about committing to an ISO 9001 quality system. Or employing Theory of Constraints. Or adopting Quick Response Manufacturing.

Going big also relates to capital investments, new facilities, acquisitions, developing new products, or entering new markets. Although business people are  characterized as conservative by nature, making big decisions often requires bold risk taking and an audaciousness not present in the ranks of most corporate managers. Business dynasties aren’t created by just crunching numbers and analyzing data.  Mixing number crunching with guts and vision is what it takes to  make things happen. To paraphrase New Hampshire native son, newspaper editor Horace Greeley, “Go big, young man, go big”.

 

Are You Ready for “The Sixth Wave”?

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

No, I’m not talking about surfing. I’m talking about an economic wave that’s in its early stage of emergence and will drive our economies for the next 50 to 60 years. In the 1920s, a Soviet economist, Nikolai Kondratiev, studied capitalist economies and noticed that they went through repetitive cycles of expansion and contraction. These  “Kondratiev Waves” last about 50 years. He identified the first wave as occurring in the early 18th century. His ideas eventually lead to his execution in the late 1930s, but other economists continued his work, trying to understand the reasons for these cycles. Although this theory is not universally accepeted, it does offer insight into societal, political, and technological changes that have occurred throughout history.  In the 1980s, Cesare Marchetti offered supportive research when he wrote about society as a learning system and decribed Invention/Innovation Cycles whose ebb and flow correspond to these economic waves.

The Kondratiev Wave consist of four periods. As liquidity expands in the initial phase of the cycle, commodity prices rise reflecting the increasing business activity and inflation. As business activity and inflation accelerate, speculators bid up commodity prices due to their fear that inflation will continue to accelerate. After the rate of inflation peaks and starts to fall, the acceleration premium is removed from prices. Thus, commodity prices start to fall despite continued but slowing inflation, a trend called disinflation. At the same time, a change in psychology away from fear and toward feelings of relief and hope induces people to channel the excess purchasing media created during disinflation into bidding up the prices of investment assets such as stocks. Because inflation continues, the wholesale prices that manufacturers charge for finished products, the retail prices that stores charge for goods and the levels of wages that employers pay for labor all continue to rise but at a continously lesser rate, following the rising but slowing trend of business activity and inflation. Near the end of the cycle, the rates of change in business activity and inflation flip to zero. When they fall below zero, deflation is in force. As liquidity contracts, commodity prices fall more rapidly, and prices for stocks, wages and wholesale and retail goods join in the decline. When deflation ends and prices reach bottom, the cycle begins again.

Most who subscribe to the Kondratiev Wave theory identify our current economic situation as being in the last phase of the fifth wave cycle. The authors of The Sixth Wave have suggested that the emerging wave will be powered by the economics and technology of scarcity. Those who can do more with less and reduce waste will prosper. Industrial trends such as Lean Manufacturing, Six Sigma, and Theory of Constraints are all associated with elimination of waste, reduction of variability, and improvement of production velocity. These practices support a Sixth Wave mentality. 

At Graphicast, we recently described our experience with a customer who worked with us to take an expensive assembly of four machined components and turn them into a single, economical casting that was stronger, more rigid, and less wasteful to produce. There are many more opportunities to reduce costs by redesigning and rethinking your needs, than by just making the old design “cheaper” by outsourcing to a low labor cost area. In the long run, the better design is the most productive way to succeed in the Sixth Wave economy.

Good luck getting ready for the next wave. We may not yet be out of the Kondratiev “winter”, but prosperity awaits those who embrace the upcoming “spring”.

Assembly Magazine Gets It

What do they Get?  The value and cost benefits featured in Graphicast’s newest trade magazine article.  This case study shows how moving from CNC produced components to a casting process lead National Optronics to big savings on a low volume part.

After working with Graphicast to convert the design, National Optronics has taken what was a four piece pin and screw assembly, down to a single, precision machined casting.

 This project reduced part inventory, assembly time, and made for a much more rigid design.  Oh yeah, they also brought the cost down!

Sound like something that can help you?  CLICK HERE to read the story.

Is Lean Manufacturing in the Job Shop Undergoing a Transformation?

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

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,

Manufacturing Lessons from a 150 Year Old Factory

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

I had the pleasure of touring the 150 year old Beech River Mill last Friday. This company, a manufacturer of custom made wooden shutters and doors,  is the last mill operating on the Beech River, a short river flowing through Ossipee, New Hampshire. Mills  have been on the Beech River since the late 1700s, and many building foundations remain along the riverbank. The mill was busy, fulfilling orders for many building restoration and custom home projects throughout the northeast.  The operating floor, still residing on the original wooden planks, was an interesting mixture of modern and Victorian era woodworking equipment. Of particular interest were the comments from the workers. Although the Victorian equipment had a dozen oiling ports on it that needed to be filled before the machine started, as long as the machine was lubricated and the blades were sharp, the machinery worked beautifully. If a component wore out, a visit to the local blacksmith generally solved the problem. The modern equipment, with its computers, sensors, and other technologies is far more sensitive. Breakdowns are more frequent and repairs are more difficult and expensive.

Lean manufacturing is about eliminating waste.  Sometimes that waste  is not apparent. Modern, high productivity equipment would seem like an easy choice to eliminate  labor intensive, lower production rate equipment.  And sometimes it is. However, aren’t  higher downtime rates and delays in repairs of the modern equipment wasteful? Maybe slower and steady is the least wasteful way to operate some of the steps in your production. You must look at the entire operating system and the interaction of all the components on the final product and the output of the factory before you make any changes. How many of us have heard the regrets of manufacturers who bought equipment that didn’t work the way they thought it would?

Proponents of Goldratt’s Theory of Constraints look at the entire manufacturing system and its throughput in ways that make these types of decisions less troublesome and more effective. In fact, in Goldratt’s popular business novel, “The Goal”, an old piece of equipment saved the day for a factory trying to eliminate a production bottleneck.  As the economy improves and you’re looking to expand, step back and consider a Theory of Constraints approach to your situation before you make any decisions.

A Good Morning at the Manufacturing Leadership Summit 2010

The highlight of the morning at the Manufacturing Leadership Summit was a review of what the National Asociation of Manufacturers is doing to boost the visibility of the manufacturing sector around the country, especially on Capitol Hill. John Engler, president of NAM and former three term governor of Michigan, presented a rational overview of areas of tax policy, education, and industrial policy that are needed to secure manufacturing as a key foundation of our economy. With all the talk of the decline of manufacturing in the US, it is important to realize that the US share of global manufacturing output is 21%, while China’s share is 12%. That may be hard for some to realize, but it just underscores the need for stable manufacturing policy in government and a serious effort from education to keep the supply of a highly qualified workforce at the forefront of their efforts.

Economic Feedback from India – They’re Seeing a Manufacturing Recovery Similar to the US

“Geoff Forester photograph, courtesy of the New Hampshire Community Loan Fund”.

I had a phone conversation this morning with a friend of mine who started a fairly large manufacturing company in India.  He indicated his customers are expanding, but are also cautious about the sustainability of the activity. It appears a broad swath of both the US and Indian manufacturing sectors are seeing the same type of slow, cautious recovery. This is certainly Graphicast’s experience.

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Taking Innovative Casting Technology to Your Bottom Line™

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