1 Lean Manufacturing More than a fad

2 Agenda. What is Lean Manufacturing. How does it work. What results can I expect. What is the commitment necessary. Precast producer examples. Summary

3 Who is Bill Ray Principal at Precast Consulting Finance, Marketing & Operations Background –Business ownerPCI certified producer –General managerSales exceeding $15 million –Project managerProjects exceeding $ 10 million –Chief fin. OfficerSales exceeding $150 million –Education MBA University of Chicago BS Florida state Contact info: Website Lean Manufacturing More than a fad

4 Working smarter – focus on how work gets done Work Group Productivity Improvement methods. Focus on skills, teamwork. Development of initiative. “Quality Circles” Industrial Engineering Methods. Traditional IE job design analysis. New disciplines Six-sigma Lean Manufacturing Cost savings 20% per year or more are typical

5 Lean Manufacturing More than a fad Lean Manufacturing IE discipline based on continuous improvement Separate activities into value added and waste. Value added is any activity that transforms the product in a way that the customer will pay for it.. Waste is any activity that does not add value from the customer point of view. Value stream mapping Map the “As Is” condition - value added and waste Discover opportunities to reduce waste Prioritize opportunities Identify action plans Follow up, continuous improvement

6 Lean Manufacturing More than a fad Value Stream Mapping

7 Lean Manufacturing More than a fad Value Stream – Steel shop example Typically over 90% of work is waste

8 Lean Manufacturing More than a fad Reduce waste through Blitz events (Kaizen) Standardized tasks Workplace organization (5-S) Visual controls Plant layout Inventory reduction Mistake proofing Setup reduction Focus on work team effectiveness

9 Lean Manufacturing More than a fad In a nutshell Lean is about making improvements in processes and teamwork, not by spending money on new equipment - Lean is not high tech – it is low tech - Lean is about great ideas that cost little or no money - Lean is about teamwork, working smarter - Lean is about making small continuous improvements

10 Lean Manufacturing More than a fad Lean means continuous improvement Lean generates very good improvement ideas. Often, ideas don't get fully implemented in a lasting way Must be ongoing – a way of life The secret is to engage the team that has to make it happen.

11 Lean Manufacturing More than a fad Lean Manufacturing Opportunities Bed setup is a major area of waste in precast manufacture and offers many opportunities for waste reduction through better methods, standardization, improved material flow.

12 Lean Manufacturing More than a fad Lean Manufacturing Opportunities

13 Lean Manufacturing More than a fad Lean Manufacturing Opportunities

14 Lean Manufacturing More than a fad Lean Manufacturing Opportunities

15 Lean Manufacturing More than a fad Lean Manufacturing Opportunities Lack of standard methods - Disorganization Redundant process steps, missing process steps Unnecessary inventory Rework, excessive finishing costs Waiting for the crane, for mix, parts, inserts Waiting for instructions, waiting for drawings – waiting, waiting Ineffective material flow or layout - walking, walking, walking Looking for tools, looking for parts, looking for inserts Checking, counting, measuring... etc.

16 Lean Manufacturing More than a fad Producer Start-up Experience ‏Mar. 2001: Toured Butler Buildings manufacturing ‏Inspired by Lean program ‏July 2001 – Sept. 2002: Tried to implement lean internally ‏Ultimately unsuccessful. ‏Nov. 2002: Brought in an outside lean consultant ‏Do an initial business assessment. ‏Dec. 2002: First Kaizen event held on storage & handling. ‏Jan. 2003: Created the position of CIO Supervisor. ‏Jan. 2005: 28 Kaizen events held to date.

17 Lean Manufacturing More than a fad Producer Start-up Experience First try failed Lean Goals Not Linked to Company Objectives Poor Teamwork Lack of Sustainment

18 Lean Manufacturing More than a fad Producer Start-up Experience ‏ Lean Goals Linked to Company Goals  More Sr. Management Involvement through the Lean Steering Committee Teamwork Between CIO and Production  Plant Manager moved into the CIO to link with production and develop teamwork Sustainment Responsibilities Assigned  Supervisors are responsible for sustainment of Kaizen events in their areas.

19 Lean Manufacturing More than a fad Lean Manufacturing Typical Start-up Initial Lean program fails Doesn’t fit company goals Leadership problems Management commitment uncertain Program refocused Lean consultant used to get started Full time lean coordinator named and trained (or hired) Measurable goals are defined “No Cuts” policy Employee involvement at workgroup level is structured in Takes 9 months – 1 year to achieve some success

20 Lean Manufacturing More than a fad Lean Manufacturing Typical Results

21 Lean Manufacturing More than a fad Lean Manufacturing Typical Results 50% Increase in beam throughput - Without adding new capacity ‏ 19% reduction in production crews (through attrition) ‏ 12% decrease in MH / CY ‏ 15% decrease in cost per cast ‏ 47% decrease in the number of defects

22 Lean Manufacturing More than a fad Lean Manufacturing Typical Results ‏ 26% Reduction in missed pours ‏ 22% Improvement in spandrel labor productivity ‏ 9% Improvement in sandwich panel labor productivity

23 Lean Manufacturing More than a fad Lean Manufacturing Typical Results ‏ Lean is not just for production ‏ 100% increase in shipping for 2004 ‏ Created a standard shipping process without incurring extra costs or interfering with production

24 Lean Manufacturing More than a fad What resource commitment is necessary? 1. Management commitment for sustained period 2. Willingness to involve employees at the workgroup level 3. Requires a dedicated leader – typically 1% of headcount 4. Start with a local Lean consultant, then train/hire in-house

25 Lean Manufacturing More than a fad Summary: ‏ This is not a fad. It can transform your organization ‏ Typical results reported by precast producers Productivity improvements 20% - per year 20 – 50% increase in production – without new capital. Reduced supervisory overhead Reduced rework, improved quality ‏ It take time – its not a quick fix ‏ It takes dedicated staffing ‏ It takes management commitment

26 Lean Manufacturing It’s more than a fad