Article on “Lean warehouse” off the mark

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“Lean is not just for manufacturing […]; its techniques and tools can be adapted to almost any type of operation. In warehouses and DCs, it can improve efficiency, inventory, safety, and costs, say experts in the discipline. And because Lean changes the way people think about processes and communication, it can be especially effective in helping facilities use warehouse labor more efficiently and cost-effectively. It’s a complex subject that requires formal training to master, but the following will provide a general idea of how lean principles can have a huge impact on warehouse labor.”


Michel Baudin‘s insight:

This article is all about the efficiency of warehouse operations and the way “Lean” can reduce warehouse labor. It says almost nothing about the effectiveness of warehouse operations. From this article’s perspective, driving an empty forklift is a waste to be eliminated, but there is not a word about using other means than forklifts to move goods, in perhaps less than pallet quantities, such as carts or small trains. There is not a word either about locating frequently used items in the locations that are easiest to reach, or collocating items that are frequently used together…

At least in manufacturing operations, the number of people used in warehouse operations is a tiny fraction of the number used in production, and increasing their productivity is not the issue. A Lean implementation may instead increase their numbers to improve service and achieve much larger productivity gains in production.

The pursuit of fully loaded forklifts and trucks may increase the efficiency of storage, retrieval, and transportation operations, but also delay e deliveries and hurt the performance of the business as a whole. This is not just my own observations. It has been described as a systematic phenomenon by researchers like Hau Lee.

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Israel’s Efficiency Contract Under Fire

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“TEL AVIV — Israel’s Defense Ministry is slightly ahead of schedule in a 10-year government-mandated plan to save 30 billion shekels (US $8.4 billion) through 2017, but no thanks, uniformed officers say, to the ministry’s high-priced contract with an international consulting firm.

Nearly five years into the plan, high-ranking officers here insist the lion’s share of the 9.2 billion shekels saved thus far stem from internal, self-generated measures, despite costly and — in many cases — unrealistic reforms proposed by New York-based McKinsey & Co.”

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Lean Assembly, Lean Logistics, and Euclides Coimbra’s Changes

My fellow consultant and author Euclides Coimbra has only written two reviews on Amazon, both on July 3, 2006, giving five stars to my books Lean Assembly and Lean Logistics, and commenting as follows:

  1. About Lean Assembly: “Very good book. Full of details. Useful for implementers. Knowledgeable readers can find many info between the lines. A wonderful contribution for Kaizen and Lean knowledge.”
  2. About Lean Logistics: “Following Lean Assembly Lean Logistics is a natural continuation. The style is the same and the information as valuable as Lean Assembly. A must have for any Kaizen and Lean implementer. Lots of details and useful information.”

A few months later, I went to work for him, and grew to appreciate his consulting talents. We parted later on good terms and I considered him a friend.

I just received a copy of his 2013 book, Kaizen in Logistics & Supply Chains, and found much overlap in subject matter with the two books of mine that he previously considered a “wonderful contribution” and a “must have.” I assume he changed his mind because they are not in the bibliography, and I couldn’t find my name anywhere in his book.

Spotlight | Business Leaners

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This month in the Spotlight we have Michel Baudin.

Michel Baudin‘s insight:

Troy Taylor, from Western Australia, had some questions. Here are the answers.

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A Lean Journey: Meet-up: Michel Baudin

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Interview on Tim McMahon’s A Lean Journey.
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How natural disasters test Lean supply chains

Via Scoop.itlean manufacturing

The floods in Thailand are the latest. Before, there was the Fukushima earthquake and, going back further in time, the Aisin Seiki fire of 1997 in Japan and the Mississippi flood of 1993…   Each time, the press has faulted Lean for making the economic disruptions caused by theses events worse. The actual record is that the vigilance inherent in Lean Logistics and the strength of customer-supplier relationships in a Lean Supply Chain are in fact key to a rapid recovery.

In 1993, Toyota logisticians in Chicago reserved all the trucking available in the area a few days before the flood cut off the rail lines to California, thereby allowing the NUMMI plant to keep working during the flood.

In 1997, when the Aisin Seiki fire deprived Toyota in Japan of its single source of proportioning valves, other suppliers came to the rescue in what the Wall Street Journal a few months later called the business equivalent of an Amish barn raising.

You can, and should protect production against routine fluctuations. That is what tools like Kanbans are countermeasures for. But there is no way you can afford to protect your business against all possible, rare catastrophic events. What you can and must do instead is be vigilant and prepared to respond quickly and creatively to whatever nature or society might throw at you.
Via the Bangkok Post

Bodo Wiegand on Shop Floor Management as Leadership Responsibility

Bodo Wiegand heads the Lean Management Institute, which is the German affiliate of the Lean Enterprise Institute. The following is a translation from German of a large excerpt from his  February, 2012 newsletter,  Wiegand’s Watch:

Last week I was invited to a visit a company to discuss the benefits of Lean management with its Board. On such occasions I always ask for a detailed factory tour first. This way, the discussion can be better focused on the company’s actual problems and not get stuck in theory.
My short audit begins before the actual visit. Before turning into the visitor parking lot, I drive around the facility to inspect the grounds. Is it tidy? What do I see? As there marked pathways? How much material lying around? How many employees, forklifts, trucks and cars are moving around? This is my very first impression.
In the actual plant tour, I know they will not show me the problem areas of the company, and that they will keep me as much as possible on a visitor path is. However,  by saying that I would like to go from customer to supplier, I usually get to see what I need. So we follow the value stream from back to front.
The way to Shipping usually reinforces what I have seen outside:  if it is messy outside, with no marked pathways or areas are selected, heaps of materials are piling up, and  cars and trucks randomly parked, what else can I expect in production?
Far too few pay attention and remember that this is the company’s calling card.
Now, in this case are with me the production manager and the Lean Leader. They explain with pride that they have been doing Lean for two years already for 2 years and have achieved huge success. They have  set-up times in half on several machines. But we were at Shipping and I just wanted to know what products were arriving  today to go out  today or tomorrow at the latest. After questioning the Shipping clerk then we found that two containers that were very important and urgent were just too late.
To my question on how often something like this happens, the production manager answered “Rarely”; the shipping clerk, “Every day.” After a short discussion, the production manager admitted to a delivery reliability of 80%, but he was not quite sure. To my question about lead time the Lean leader proudly answered “In general, about 3 weeks.”
“How long does it take to run through a super hot job” , I asked as a follow-up.
“2 days,” he shot back.
My next question about how many projects he had initiated to reduce the lead time demotivated further, as he had to admit there weren’t any.
Well, for me the lead time is one of the most important metrics in a company is and a priority in the execution of projects. The shorter the lead time, the higher the flexibility, the smaller the stocks, the more stable the process, the less time available to make mistakes, and the more efficient the organization.
But satisfaction with a lead time  ratio of 1 to 10 between hot and normal jobs in German companies is quite amazing. For the hot job to be completed in 2 days, it flows through the company without intermediate storage, is processed immediately and is  carried through without pause, without waste, except of course that the supervisor personally takes the matter in hand. But why is it not always like this for all jobs? Why is the exception and not the rule?
But we moved on. In assembly, the Lean leader explains that they have built up an assembly line, but that it still cannot work to the takt time, and that they have therefore built up behind the line an assembly rework shop for quality problems.
Hello? – Has he really understood Lean?
But even outside of the assembly line you could not overlook the signs of chaos. You saw pallets with several items pulled from the supermarket, but by the pallet-load rather than in the quantities necessary for assembly. The reason was simple. The storage space in the supermarket was insufficient and the supermarket was just too full.
The degree of Lean manufacturing and Lean understanding was close to zero.
Next, I turned my attention to the order fulfillment process. But there, also, they had no clue where to start with takt time, bottlenecks, and inventory. The information boards were full of outdated figures on revenue and absenteeism. Two departments were reasonably tidy and provided with standards that were not followed. Brooms and tools had assigned shadows, but were not actually available. Employees were running around for no apparent reason, or talking in small groups. The production manager didn’t know the supervisor’s name, the clocks were off, some windows broken and lamps without bulbs, etc., etc.
To avoid any misunderstanding, as I walk through a company, I don’t pretend to understand everything, but I try to get an overall impression. Those of you who walk through production daily must know how to see and should focus their attention on a different theme every day to be a good shop floor manager. But beware! It is a difficult, thorny path – but it’s worth it.

Takt times and falling sales: How to Respond?

Question from Jean-Baptiste Bouthillon on The Lean Edge:

We have all learned that overproduction is muda, and that production must follow the takt of customer demand.
Is there a lean way of dealing with falling sales ? Should we just adjust production to customer takt time or stabilize sales by giving rebates ?
Is it important to level sales and give some stability to production or should we just adjust the production takt time ?

My response:

You question implies that takt time is only a function of customer demand. It is not. When you calculate it, you divide your production time by the demand, which means that it is as much a function of how long you decide to work as of how much you have to produce. Without any change in customer demand, you double the takt time by working two shifts instead of one.

The takt time of a production line is the time that elapses between two consecutive unit completions when the line runs. It is not the rate at which customer orders arrive.

So how do you respond to falling sales?

You have to distinguish between fluctuations in sales, for which you should not change the pace of production, and major changes, for which you should.

Once you have set up a large assembly line to work at a takt time of 57 seconds, changing it to 60 seconds is a major effort, involving the balancing of tasks among stations and adjustments in part supplies. In car assembly, unless you are hit by something like the Fukushima earthquake, you don’t do it more than once in four months, even if you are Toyota. During this period, you use heijunka to respond to fluctuations in mix, and adjust overtime for fluctuations in total volume.

If you have a major downturn, you have to reduce production, and the challenge then is to do it without going bankrupt while retaining the work force you spent so much time and effort developing.
It is in such times that having your money tied up in inventory can bankrupt you. When the recession hit in 2008, management in manufacturing companies suddenly took an interest in working capital, but it was too late. Downturns come brutally, and it is when they occur that you must be ready.

Keeping your work force intact and prepared for the next upturn is just as essential. So you stop using temps, cut all overtime, go on four-day weeks, or three-day weeks, and use the available time to solve nagging engineering problems, experiment with new technology, etc. I remember an auto parts plant in Japan, in which recession time had been used by a team to build in-house a pick-to-light system with their own AGV out of Creform. Even though they did not explain it, you could tell that they would know exactly what to require from vendors and how to deploy this technology when the upturn came.

IndustryWeek : Manufacturing and Trust: A Prescription for What Ails Our Industry

Via Scoop.itlean manufacturing
I also wrote on the subject in Chapter 19 of Lean Logistics. Adversarial relationships between suppliers and customers are stable because each side perceives a collaborative attitude with the other as unilateral disarmament: any information they share can be used against them in a future negotiation. And there is no shortage of examples of such fears being justified. So how do you defuse this situation? Rob Olney’s article points the way, but some of his recommendations assume trust is already there. How do you get them to that point?   “Distrust fuels the need for extra time, inventory, paperwork and more, ultimately building more cost and inefficiency into the supply chain.”