A lean route to manufacturing survival

Journal: Emerald

Author: Andrew Lee-Mortimer

Abstract:

Purpose– Aims to detail the on-going implementation of lean manufacturing at a UK-based electronic product-manufacturing operation. Design/methodology/approach– Describes how and why a manufacturing operation, which had already seen major improvements that had made ita highly regarded plant, is adopting lean manufacturing as part of a manufacturing survival strategy. It also looks at some of the main Lean projects undertaken, the major benefits gained and the key lesson learned. Findings– While the operation’s highly effective continuous improvement programme had delivered a major culture change along with significant OEE and quality improvements, the introduction of lean manufacturing highlighted that this had been achieved at the cost of creating a number of “islands of excellence”; resulting in high levels of WIP and long lead times. The implementation of lean manufacturing is now enabling this electronic products manufacturer to build on its excellent foundation of continuous improvement, and start the process of moving away from batch and queue to creating flow through the whole plant; reducing WIP and lead time, and improving productivity, without compromising previous gains. Originality/value– Brings to the attention of managers how it often takes the wider focus offered by lean manufacturing to discover the hidden waste that can reside even in operations that appear to be very effective. Confirms the importance of moving from a batch and queue mentality to process flow, and the productivity benefits that can be gained, but also highlights that even well-organised businesses are liable to suffer pain when implementing lean, especially with respect to introducing flow and eliminating WIP, which has to be worked through.

Introduction:

Despite all the “talk” of lean manufacturing, it is obvious that many manufacturers have yet to grasp the full benefits of this philosophy. In particular, the focus at many plants producing and assembling electronic products, which are often dominated by large capital equipment and areas of automation, has tended to remain fixed on OEE, high quality and on-time delivery, and they have continued to be driven by an in-trenched and out dated batch and queue mentality. However, there are those that have been quicker to catch on to the lean manufacturing wave, and who now accept it as a key part of their strategy for long-term manufacturing survival. With its focus on removing the waste in current systems, concentrating on adding value that customer pay for and improving product flow, to increase productivity and reduce lead times, lean is seen as representing a clear way forward for all of those looking to effectively face the increasing challenge posed by the low cost economies. One plant that exemplifies the required survival attitude and approach is Siemens Standard Drives based in Congleton, UK. Part of Siemens Automation & Drives, the operation employs approximately 420 people, and is now responsible for the design, manufacture and customer support of a range of electronic drives up to 15 kW. A few years ago, the operation realised that despite having worked hard to become one of the best production facilities in its sector, meeting all key quality and delivery targets, and being recognised as such, more was needed if it was to continue to compete in a global economy. Embarking on a fully integrated lean manufacturing programme, Congleton ’immediate gain was an insight into how much “hidden” waste, and potential for productivity improvement, there was within its facility. Accepting the challenge, the company has subsequently tackled the new improvement programme with the same workforce focused approach that had already achieved so much. And, although not all the changes have gone to strictly to plan, the programme has not only delivered major performance gains, in terms of reducing lead time and improving productivity, but it has also delivered some crucial lessons that the operation is now applying to enhance its future lean developments.

A shocking discovery:

However, another key sign of the operation’s development is that even while it was winning all these plaudits, the management team had already accepted that continuing what it was doing well, in terms of CIP, was not enough to deliver the future improvements required. The mission for the site has long been to become the “proven choice for manufacturing” within the group. But, the growing realisation was that as well as improving its competitiveness against the other Siemens electronic manufacturing plants across Europe, who would be more than willing to take its products, the UK operation was going to have to compete against the increasingly impressive production facilities in China to which production could potentially be outsourced. Therefore, to deliver the extended year on year productivity improvements that were seen as essential to ensure long-term survival, the management started to look around for an approach that would build on the existing and on-going change initiatives, and provide the next “leap forward”. What was found, as the solution, was lean manufacturing.

Building on strengths:

However, while others remain in the dark, Congleton’s management team used the mapping process as a key tool in helping to gain a clear understanding of the plant’s situation. This has lead to the subsequent development of a very structured and strategically integrated approach to the full deployment of lean throughout the site. A lean steering team, involving managers from across the operation, now guides the overall programme, and has helped gain buy-in from the different departments. Targets have been set that are closely aligned with, and are being be measured against clear business goals. From the start the aim of the lean programme has been to slash WIP levels, reduce finished stock levels in Germany, dramatically cut lead times, to just a few days, and increase productivity.

The manufacturing value stream for the Congleton facility comprises of four core processes; surface mount, board assembly and wave solder, board test and final mechanical assembly, test and packaging. The mapping exercise highlighted the third stage – the testing of the PCB boards – as a major bottleneck, and therefore, the first lean project undertaken was aimed at making more capacity available, and so ensures more consistent delivery to the next process. As Webster, reports, the operation was struggling to get boards through testing and into the final assembly area and it was clear from early analysis that the test fixture changeover practices were extremely “wasteful”. To help tackle this issue, the manufacturing advisory service, was brought to organise and run a two-day SMED workshop for a team of 30 employees from the test area. Initial diagnostics undertaken by the workshop confirmed the problem. In fact, looking at one “pilot” testing fixture it was found that due to a number of factors; such as lack of clearly defined responsibility for changeover elements, no changeover standard operation, different changeover techniques used between the shifts, and test equipment not running for the full duration of the changeover, that the average change over time of around ten-minutes was at least 50 per cent higher than needed to be. And with around 2,600 changeovers completed per year, for this one type of fixture, per machine, even this equated to a huge lost production opportunity. Based on these findings, the workshop guided the team through a “live” SMED project on the pilot fixture.

Balancing the workload:

Having very successfully resolved the bottleneck issue within the test area, the operation has since embarked on its second major project. As a result, the final assembly, test and packing area for its core product range, which as the last process in the value stream should dictate the pull rate of the production flow, has now undergone a complete “lean” overhaul. However, it was during this project that the operation learnt first-hand about the pain that can often accompany a major  lean development.

Exposing problems:

All our lean activity, up until this point, and especially the SMED work within the tester area, had delivered important productivity and lead time gains, without any real pain. However, creating the new final assembly cells was the first time that we had aimed for single piece flow and the elimination of “safety” WIP. The MAS practitioners had warned us from day one that this would probably expose problems that had been hidden by the high levels of WIP, but we had not really taken this on board. But it was not long after the four new cells were operational that the predictions came true and we started to encounter a continual loss of production due to a range of previously unrecognised issues.

Lessons learnt:

Nevertheless, the introduction of the cells has proved another major eye-opener for the site, and looking back there is also recognition that with a bit more foresight and co-ordination some of the pain experienced could have been avoided. For instance, the operation now realise that more could have been done to determine the performance and availability of the test equipment beforehand, and so not only anticipate the impact and potential losses, but put in measures sooner. Equally, there should have been greater and wider awareness of the level of equipment support that would be required within a single piece flow process, which should have been better conveyed to the support technicians. Previously it has been acceptable, if the engineers prioritised their work so that they got down to the lines within a few hours. With the cells, not only is instant support needed, but also problems have to be fully resolved not just fixed for the short term

The introduction of the cells was rushed and not everything was ready in terms of material supply, standard operating procedures or operator training. In particular, it was assumed that because the operators had all worked in the area for years they would automatically know and understand all that was required.

Conclusion:

Crucially, this most recent experience has not deflected the operation from its overall lean programme. More projects are already being planned. These include moving recently introduced PCB coating equipment into a physical position better suited to value stream position, which is between PCB testing and the final product assembly cells, and at the same time eliminating the existing WIP storage at the end of the coating process. The aim will be to establish real flow from testing, through coating and into the assembly cells, with the cells requirement dictating the throughput. An even bigger challenge is on the drawing books that could see the breakup of two of its core process islands, the PCB assembly and the PCB test areas, and the creation of cells that will manage the assembly, solder and test as a single piece flow, so further eliminating the batch transfers that still exists.

However, two things are clear. Siemens Congleton has already benefited greatly from its lean programme. Through its lean focused CIP and the major projects completed, significant inroads have been made in reducing internal lead times, removing non-value added activities and increasing productivity. Second, the operation, management and operators alike, are now far better prepared for the problems and pain that are bound to be experienced when the next lean developments are implemented. As Webster concludes, “The lessons learnt are being put to good effect in the planning we are now undertaking for our next major Lean projects”.