| Very often Lean manufacturing tools used in isolation | | | | Since company "X" values each minute of production |
| only serve to embrace a culture of local-optimization | | | | time at $500.00 we can further break this down: |
| (optimizing the parts rather than the whole.) In other | | | | 36 Hours x 60 Minutes per Hour = 2160 minutes |
| words, you can optimize operation "C" to the point | | | | more production time each day |
| that it is running great, producing terrific numbers, and | | | | 2160 Minutes more production time x $500.00 per |
| really looks fantastic, but if operation "D" is your | | | | minute = $1,080,000.00 increased sales every day |
| constraint, all your efforts on operation "C" may not | | | | provided their customers keep purchasing all |
| have much of an impact on your overall throughput | | | | company "X" can produce. |
| or profitability. | | | | If that's not an impressive ROI than nothing is! |
| If you have limited resources, and can only focus | | | | And...they are still improving. |
| your Kaizen efforts on one issue at a time, I'd | | | | Now, just for a minute, let's pretend that company |
| recommend you focus on operation "D" in the | | | | "X" can easily out-produce customer demand, or they |
| example above, until it has been resolved, or is no | | | | are just a one-shift operation. Where's the value |
| longer your biggest constraint. | | | | now? |
| Sometimes, however, you can spend some Lean | | | | Well, the truth is, the dollars won't add up the same |
| improvement time on non-constraint processes and | | | | way, but company "X" could still enjoy the following |
| realize very substantial, even incredible, and | | | | benefits: |
| immediate bottom-line gains. SMED is one of the Lean | | | | * Increased capacity, (capacity they don't actually |
| tools that virtually always pays for itself many times | | | | need at the moment, but may as sales increase) |
| over. Allow me illustrate with a brief case study. | | | | * Might work a shorter workweek or reduce |
| SMED Case Study: | | | | overtime |
| A medical device manufacturer (company "X") can | | | | * Less downtime/production losses when an "urgent" |
| sell every product it can possibly produce. The more | | | | changeover is needed |
| their lines run, the more money they make; it's | | | | * More maintenance attention to bottleneck |
| pretty much that simple. Changeovers take time, and | | | | equipment that runs 24/7 (if this situation exists) |
| therefore reduce the run-time of the lines. In reality, | | | | * Might not need to purchase additional equipment |
| however, changeovers are not their biggest | | | | (capacity increases negate need) |
| constraint when you look at the company as a | | | | * Might allocate freed changeover team time to |
| whole, (re-read your TOC materials on "Policy | | | | proactive maintenance of equipment |
| Constraints;") but opportunity for improvements and | | | | * Increased flexibility on the production floor (think |
| the potential for additional run-time was obvious. | | | | mixed-level-loading,) which results in smaller batch |
| To address line and product changeovers we formed | | | | sizes, and carrying less inventory, etc., and |
| a "kaizen team" and took a closer look at the | | | | * Could probably reduce a 1 ½ shift operation |
| situation in an "up-close and personal" way. I've listed | | | | to a 1 shift operation (that doesn't mean a RIF! but |
| some of the results from our efforts below. We'll let | | | | that's a subject for another time) |
| the math speak for itself. | | | | Occasionally I'm asked, "Why should we care about |
| After a five-day SMED event, company "X" was able | | | | SMED if we do all our die/mold changes at night |
| to reduce their setup/changeover time by 4 hours | | | | when nobody's here anyway?" The simple answer is; |
| per changeover. That may sound like a lot, or just a | | | | you can do more of them in less time, with greater |
| little depending on your experience and industry, but | | | | ease and safety, and prepare your company for |
| this is what 4 hours more production time means to | | | | future increased demand. You also need to ask; if |
| company "X." | | | | changeovers only take ten minutes to complete, why |
| Company "X" produces about 90 million units per year | | | | would you need a night shift to do them? Why |
| Every minute of line run-time is valued at $500.00 per | | | | wouldn't you just do them during the daytime so you |
| line | | | | could run smaller batch sizes, and carry less |
| There are 9 lines running | | | | inventory, while being more responsive to your |
| Each line experiences a changeover an average of | | | | customer's needs? |
| once per day | | | | I like to think of SMED as a tool of efficiency and |
| So, how does that all work out? | | | | execution. Great teams and great companies know |
| Well, a reduction of 4 hours of downtime due to | | | | how to execute for outstanding results. Eventually, |
| changeovers for 9 lines actually turns out to be an | | | | most companies will need to implement SMED in one |
| increase of production time across those 9 lines. Each | | | | form or another. Even if changeovers/setups aren't |
| line literally has another 4 hours to produce pre-sold | | | | your biggest "constraint" you may find that a little |
| products every day. | | | | attention in this area can have a major bottom-line |
| 4 Hours x 9 Lines = 36 hours more production time | | | | impact for relatively little expense and effort. |
| everyday | | | | |