| Nov.2008
Dear Friends:
Professor Dan Jones, the president of Lean Enterprise Academy in England, recently sent a letter to his readers regarding “A recession is a good time for lean”. I agree with him whole heartly and would like to share with you my thoughts:
1. Many recent PO cancellation and tight financial credit create a crisis at many companies. At the same time, it also provides companies opportunity to make changes. It is a leader’s responsibility to drive Kaizen improvement at this critical time to protect your company and employees.
2. Where and how to start? Generally speaking, your challenges fall into QSTP (quality, service, technology and price) and your solutions are reducing ppm, shorten lead time, reducing inventory and improving productivity. It is you, who understand the company’s challenges, need to identify real problems first, then you can focus on proper solutions.
3. The managers and line supervisors should teach employees how to identify 7 wastes and coach them how to eliminate these non-value added activities from daily operations. Make sure employees understand the waste is tied with company’s and individual’s survival and future opportunities. You can select 1-2 product lines to try out a few Kaizen. I do not recommend large training programs without a careful follow-up plan otherwise it will make Kaizen a political movement. If you are interested in being a coach, LEC has developed a T3 (train the trainer) program for you.
4. Common problems and potential solutions:
a) Quality and rework: I would recommend you to assign a cross functional team to firstly identify root causes and develop action plans for solutions. It is important to teach your employee that inspection is non-value added, it would be much more effective to do things right the first time. You need to give first line operators responsibility and authority to pull Andon when they see problems and its success depends on the effectiveness of a practical problem solving system. We all know that Toyota has a good Andon system but I am pleased to see an even better one at Shanghai Leica Microscope where the respond time for an Andon is less than 10 seconds.
b) Long lead time: This will also reflect in excessive inventory of raw material, WIP, and finished goods. In other words, you tie down lots of money and cash flow. The solution is to remove barriers that prohibit material flow via a pull system. Please keep in mind that over production is a waste and stopping production line is not a bad decision. The tools you can use to shorten lead time include VSM, line balance, CCF, and SMED etc.
c) High level of inventory: Do you know actual inventory at your operation? How often is the data sheet being updated, daily, weekly, or monthly? How often do you go to warehouse for a gemba walk? Do first line workers receive material when they need it? Do you have a 5S system at warehouse? Are there visual boards to show you the top 5 stock items and 5 urgently need materials? Use your eyes to figure out answers at gemba and don’t rely on inventory data in computer system.
d) Low Productivity: Do you use U-cell? Do you use takt time? What is your machine available rate? Do you have a TPM system? Has VSM been updated regularly or it is used as a wall paper?
You don’t need additional investment or people to address the above mentioned problems. What you need to do is leading your employees making a Kaizen plan and take actions. There is a Chinese proverb “Instead of wishful thinking of catching a fish by the water, it is better to go home making a fish net” I hope you will take immediate actions to catch many Kaizen opportunities at your operation.
LEC will offer two open-class training courses for you in Shanghai:
1. Nov. 28 (Fri) 《Creating Continuous Flow》—how to improve productivity, shorten lead time, and reduce WIP
2. Nov. 29 (Sat) 《Making Material Flow》—how to manage warehouse and set up a material delivery system for just in time delivery
The instructor will be Hong Li and his background at Toyota USA, Ford USA, and McKinsey will provide you many practical solutions. Each class will take 20 people and you can find detailed information at the web XXXXX
On December 20, the speaker for Lean Salon will be Mr. Li Peng from Schneider electronics. He will introduce the lean applications at his operations. Please register at www.leanchina.org
Marcus Chao, November 13, 2009 at Shanghai
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