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Lean Roadmap Newsletter
Becoming a World Class Enterprise 
21st Edition  
Greetings!
 
The topics for this edition are:
  • 14 Considerations/Guidelines/Rules When Implementing Kanbans 
and: 
  • Administrative Processing Cells - A Powerful Lean Tool for the Office!

Free Lean Webinar Schedule

A complete schedule can be found at www.wcmfg.com
 
14 Considerations, Guidelines, and Rules to Follow When Implementing Kanbans 
Kanbans are simple but very powerful inventory reduction tools.   
 
by Larry Rubrich
Lean is a powerful business improvement activity that works so well because it is simple and can be easily understood by the entire organization. Kanbans, a Lean information and material flow control tool, are a great example of this simplicity. However, this simplicity seems to confound many organizations. Of all the Lean tools, Kanbans are most likely to have implementation difficulties. By this we mean implementations that are using far less than a Kanban's full process improvement potential, or implementations that are started and then abandoned.
 
In this article, we will be presenting considerations, guidelines, and rules when implementing Kanbans.
 
Considerations
 
Kanbans are: 
  • Communication devices from the point of use to the previous operation (customer to supplier)
  • Purchase orders for your suppliers
  • Work orders for your manufacturing area
  • Visual communication tools
  • Paperwork eliminators
Kanbans are not appropriate for: 
  • Single piece or lot/batch production (for example, you would not try to set up a service part that you run 5 pieces/year on a kanban)  
  • Safety stock
  • Systems that require suppliers to carry inventory and its associated carrying costs (Lean is about win-win. Consignment and other inventory "schemes" are not win-win).
  • Long range planning tools - changes in part number usage due to engineering changes, customer shifts in product usage, or new product introductions must be handled by more traditional methods.
Launch your Kanban initiative with no more than 6 to 8 items that represent only one area of your facility. Make sure the organization knows about the kanban launch. When these items are flowing smoothly and organizational support for kanbans has increased, add more items and more areas.
 
Guidelines
 
1) Kanban implementation prerequisites include: 
  • Setup Reduction - without Setup Reduction in place, order sizes are not reduced and we have what we do now - batch production
  • Levelized or Uniform Requirements/Production - while there are techniques for Kanbans to work in environments where demand is erratic, the Kanban learning curve should start with fairly "uniform requirements"
2) Certify your external suppliers. Certified means that a supplier's  deliveries are not subject to receiving inspection based on outstanding quality history. Supplier part Kanbans which are rejected or placed "on hold" can severely disrupt the Kanban.

3) Initially, paint all the totes, carts, and other reusable containers one new and very visible color (suggest bright green). This gives the Kanban initiative great visibility to everyone in the organization during the launch period. It also gives your team an opportunity to easily spot any containers/signals that are out of place.
 
4) Use Kanban Supermarkets: 
  • Supermarkets are intermediate storage areas (at the customer) between the  supplier and the customers (users) for that supplier
  • Supermarkets are used when:             
              1) There are multiple internal customers for an external supplier
               and/or     
              2) Multiple internal customers for an internal supplier
  • Supermarkets prevent the supplier from receiving a multitude of signals from all  the organization's internal customers for that supplier
  • With a supermarket, the internal or external supplier receives replenishment signals from only the customer's supermarket 
Supermarket
 
 Supermarket 2

Kanban Rules
1) Do not attempt to Kanban an information product or physical part/product without the complete involvement of all the members of the value added chain, including your external suppliers & customers!
  • Remember, you can not become a World Class Enterprise without World Class suppliers.
 2) Quality at the source. Do not send defective information or physical products to your customer. Defects must be corrected immediately! Defective products will cause your customer's line to shut down! 
 
3) Kanbans require reliable equipment for support. Implement Kanbans internally in areas where Total Productive Maintenance (TPM) is already in place.
 
4) Focus Kanbans on products and part numbers with stable month-to-month delivery requirements and short setup and lead times. Concentrate setup reduction and raw material lead time reductions efforts on the parts that have wide variations in month-to-month customer requirements.

5) All internal or external suppliers must have, or should be helped to develop, setup reduction programs. The true power of Kanbans can be unleashed only when setup times do not influence manufacturing capacity and, therefore, lead time.

6) Suppliers should deliver all material directly to their customer (point of use).
For suppliers who are not certified (incoming inspection required), the point of use should be taught to perform this inspection or the supplier should be replaced with a certified supplier.
 
7) Kanbans are not cast in cement - some experimentation is required. Be prepared to make adjustments initially, as sales levels change, or as other improvement activities reduce the required number of containers or kanban cards.
 
 
 
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Certified Lean Facilitator Training
 Send one person to the Milwaukee, Mechanicsburg, or Appleton sessions noted below at the regular price, and add a second person for just the cost of the materials ($160.00).
 

Certified Lean Facilitator Training (Manufacturing)

Appleton, WI 

 

This standard Certified Lean Facilitator training session will be hosted by Goodwill Industries in Appleton, WI.  
 
You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
 
Session dates are:
 
Week 1 = January 11, 2010
Week 2 = February 8, 2010
Week 3 = March 8, 2010
 
For scheduling, call Kelly at (260) 637-8064 or e-mail kelly@wcmfg.com
 
For more information and pricing, Click Here

Certified Lean Facilitator Training (Administrative/Service) 

Mechanicsburg, PA

This standard Certified Lean Facilitator training session will be hosted by CenterPoint Engineering Inc. Centerpoint is a Construction Engineering firm.  

You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
 
Revised session dates are:
 
Week 1 = March 22, 2010
Week 2 = April 19, 2010 
Week 3 = May 17, 2010 
 
For scheduling, call Kelly at (260) 637-8064 or e-mail kelly@wcmfg.com
 
For more information and pricing, Click Here
 

Certified Lean Facilitator Training (Manufacturing)

Milwaukee, WI

 

This standard Certified Lean Facilitator training session will be hosted by Snap-on Tools in Milwaukee, WI.
  
You can attend just one class or start the journey to becoming a Certified Lean Facilitator by attending all 3 weeks.
 
Session dates are:
 
Week 1 = January 11, 2010
Week 2 = February 15, 2010
Week 3 = March 15, 2010
 
For more information and pricing, Click Here
 
For scheduling call Kelly at (260) 637-8064 or email kelly@wcmfg.com
Administrative Processing Cells -  A Powerful Lean Tool  for the Office!
To fully utilize the power of Lean as a system to make our organizations globally competitive, we must use Lean as the way we run our entire organization.
 
by Larry Rubrich 
 
Most administrative/service areas of organizations are far below the level of progress American businesses have made using Lean in manufacturing (although American manufacturing, on average, is probably only using 10-15% of Lean's potential to improve their organizations).
 
The reason for this is in four parts. First, the Lean training and consulting industry (like ourselves) has concentrated on manufacturing. Lean started in manufacturing (the Toyota Production System) and then got stuck "inside the box" because we called it Lean "manufacturing". The associate empowerment and waste elimination techniques that made Toyota World Class can make any business or organization World Class. 
 
The second reason is that administrative areas are much more resistant to change than manufacturing because of departmentalization. Therefore, American business took the improvement path that was easier (and the one that we have always measured) - direct labor. This has left administrative areas as the least productive part of our organizations. By most measures, 75% (a shocking 6 out of 8 work hours) of what we do in the office are activities our customer would not pay us to do. In other words, non-value added activities or waste. A huge opportunity!
 
The third reason is educational. We have not explained to our administrative associates that, like manufacturing, they are also in production. The administrative areas of our companies do produce a product - not like the physical product we produce in manufacturing - but a "knowledge" or "information product" that supports the production of the physical product or service. This includes activities such as order entry, creating engineering drawings, and purchasing.
 
The fourth reason supports the second reason. While the world has changed and it now requires our organizations to compete in a global economy, our business cultures and the stated or implied behavioral expectations for our administative associates have not. The biggest culprit here is our continued support and use of departmentalization. Departmentalization roadblocks businesses from achieving the Lean Enterprise because: 
  • Departmentalization usually means individual departmental goals. Individual department goals prevent teamwork throughout the organization, since everyone is most concerned about achieving their own department's goals and how that will impact their own performance reviews and merit pay increases. Individual department goals reduce the "system efficiency" (order to cash) since it causes individuals within a department to make bad decisions. For example, people working for a department (instead of the system) generally process the "information product" passing through their department in production batches. They use batch production because for their department, batching is most efficient (because of mental or physical setup time). Unfortunately, batching stops the information product flow, extending the information product lead-time, and making the system less efficient. Additionally, these individual department goals may cause other behaviors detrimental to system efficiency. The salesperson who only cares about "getting the order" and not making sure all the required information to produce the order is obtained, or engineering tossing product design "over the wall" to manufacturing even though the design is not production ready.
Companies have known for many years that the cellurization of our manufacturing processes (grouping machines by product or family of products rather than by function) makes them significantly more efficient, yet we have almost no cellurization in our administrative areas.  

Office Cells turn this wasteful mess:

Lean Admin - Before Cells

Into this efficient Order Entry Cell:

Lean Admin - Cell
 
 
For more detailed information on how to design Office Cells, see our archived Lean Office Webinar at:
 
 
Or attend our next Lean Office Webinar (late January).
 
 

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Next Edition:  
  • A3 Problem Solving - What it is ... and isn't    
  • The Lean Leader Coach Series Continues with "Expectations of the Leader"
Larry Rubrich
WCM Associates LLC
2009 WCM Associates
 
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