No Waste Path Using TIMWOODS

Part 9 in our TIMWOODS Series

Hey TimWoods, it’s time to take a pause with your Gemba walk and talk about a Waste Reduction plan using what we learned in this series.

Throughout this series, our friend TimWoods has helped us focus on the wastes of Transportation, Inventory, Motion, Waiting, Over-Production, Over-Processing, Defects, and Skills. To close out the series, let’s talk about some simple steps you can take now to implement a Quality Improvement program focused on TIMWOODS. These wastes are commonly referred to as non-valued-added activities, and they can account for up to 95% of all costs in non-Lean manufacturing environments.

Why Reduce Waste?

In a lean business/manufacturing environment, we want to reduce the cost of any product or service by eliminating waste in its development, production, and distribution. So with all things being equal, if costs of all products and services decrease via the lean model, that would, in turn, drive prices down over time as well. Applying lean is about removing waste from the system, so that work-in-process decreases, productivity increases, lead times decrease, quality improves, and on and on.

There is a good quote I read from Henry Ford that applies to what we have talked about in this series: “One of the most noteworthy accomplishments in keeping the price of Ford products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost.” Henry Ford (1926) 

Quick Review of the Wastes in TimWoods

• “T” Transportation – Material should be delivered to its point of use. 
• “I” Excess Inventory – Related to Overproduction, inventory beyond that needed to meet customer demands negatively impacts cash flow and uses valuable floor space.
• “M” Excess Motion – Unnecessary motion is caused by poor workflow, poor layout, housekeeping, and inconsistent or undocumented work methods.
• “W” Waiting – This includes waiting for material, information, equipment, tools, etc.
• “O” Overproduction – Producing more than the demands. Anything produced beyond this (buffer or safety stocks, work-in-process inventories, etc.) ties up valuable labor and material resources. 
• “O” Over-Processing – Some of the more common examples of this are reworking (the product or service should have been done correctly the first time); parts should be produced without defects. 
• “D” Defects – Production defects and service errors waste resources. 
• “S” Skills/Underutilized People –Underutilization of mental, creative, and physical skills and abilities can be caused by poor workflow, organizational culture, inadequate hiring practices, poor or non-existent training, and high employee turnover.   

Reducing Waste in a Quality Improvement Program (Continuous Improvement)

It would be tough to detail everything about reducing waste in your operation in this short article; but by reviewing all the previous articles in this series (you can see them on my website or www.4WardConsult.com), we can begin to put together a good starter program. Another way to look at this, for those companies focused on Quality Control and using the SBCA QC Programs, there are similarities in implementing a Continuous/Quality Improvement program. Efforts to reduce waste, defective products, and inventories have increased, while improved productivity, customer satisfaction, and superior quality have become increasingly important. Waste reduction and quality improvement implementation in our component/millwork and LBM yards have certain key elements including top management leadership, measurement participation through quality improvement teams, and communication. Some of the steps you will take are:

• Define organization/individuals charged with identifying and implementing reductions in waste
• Define and document methods
• Establish measurements
• Audit plant methods and progress
• Review/audit specific manufacturing processes
• Refine processes, material movement, etc.

In order to reduce or eliminate waste, Lean practitioners utilize many tools or Lean Building Blocks. Successful practitioners recognize that, although most of these may be implemented as stand-alone programs, few have significant impact when used alone. Additionally, the sequence of implementation affects the overall impact, and implementing some out of order may actually produce negative results (for example, you should address quick changeover and quality before reducing batch sizes). The more common building blocks are:

• Pull System – The technique for producing parts at customer demand. Service organizations operate this way by their very nature. Manufacturers, on the other hand, have historically operated by a Push System, building products to stock (per sales forecast) or to keep our people busy.
• Kanban – A method for maintaining an orderly flow of material. Kanban cards are used to indicate material order points, how much material is needed, from where the material is ordered, and to where it should be delivered. 
• Work Cells – The technique of arranging operations and/or people in a cell (U-shaped, etc.) rather than in a traditional straight assembly line. Among other things, the cellular concept allows for better utilization of people and improves communication.
• Total Quality Management – Total Quality Management is a management system used to continuously improve all areas of a company’s operation. TQM is applicable to every operation in the company and recognizes the strength of employee involvement. 
• Batch Size Reduction – Historically, component companies have operated with large batch sizes in order to maximize machine utilization, assuming that changeover times were “fixed” and could not be reduced. However, a batch size of one is not always practical, so the goal is to practice continuous improvement to reduce the batch size. Smaller batch sizes shorten the overall production cycle, enabling companies to deliver more quickly and to invoice sooner (for improved cash flow). Shorter production cycles increases inventory turns and allows the company to operate profitably at lower margins, which enables price reductions, which increases sales and market share. 
• 5S or Workplace Organization – This tool is a systematic method for organizing and standardizing the workplace. It’s one of the simplest Lean tools to implement, provides immediate return on investment, crosses all industry boundaries, and is applicable to every function within an organization. 
• Visual Controls – These are simple signals that provide an immediate and readily apparent understanding of a condition or situation. Visual controls enable someone to walk into the workplace and know within a short period of time (usually thirty seconds) what’s happening with regard to production schedule, backlog, workflow, inventory levels, resource utilization, and quality. These controls should be efficient, self-regulating, and worker managed, and include kanban cards, lights, color-coded tools, lines delineating work areas and product flow, etc.  

Benefits of No Waste

• Lead Time (Cycle Time) reduced by 90%
• Productivity increased by 50%
• Work-In-Process Inventory reduced by 80%
• Quality improved by 80%
• Space Utilization reduced by 75%

 In addition, in my experience working with 100’s of companies over the past seven years, you will also see multiple administrative/operational improvements such as:  • Reduction in order processing errors • Streamlining of customer service functions so that customers are no longer placed on hold • Reduction of paperwork in office areas • Reduced staffing demands, allowing the same number of office staff to handle larger numbers of orders.

It may be daunting to start, but a good way to begin… Take the time to watch your teams, review what they are doing, take notes, and watch. Then, work with your teams, huddles, small groups, and begin to make the necessary changes. As always, if we can be of assistance to you as we have for 100’s of other component manufacturers, give us a call; we would be honored to help contribute to your success.

Ben Hershey is CEO of 4Ward Consulting Group, LLC, the leading provider of Management and Manufacturing Consulting to the Structural Component and Lumber Industry. A Past President of SBCA, he has owned and managed several manufacturing and distribution companies and is Six Sigma Black Belt Certified. Ben has provided consulting to hundreds of Component Manufacturers, Lumber Dealers, and Millwork Operations in the past seven years. He is highly recommended by customers and leaders throughout the industry. You can reach Ben at ben@4WardConsult.com or 623-512-6770.
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