Lean Manufacturing ? An Idea Whose Time Is Coming to Forest Products?

(Editor’s Note: This is part one of a two-part series of articles on lean manufacturing; part two is scheduled to be published in the December issue.)

Try to get your mind around these two simple sentences at the same time: 1) lean manufacturing is a great way to increase productivity, and 2) very few people in the forest products industry are actually implementing it.

Why?

To start with, lean manufacturing is relatively new to the forest products industry. In this and the following article, we will hear from an academic, an implementer, and a researcher — though their roles sometimes extend beyond these definitions and overlap.

However, they come from basically different perspectives, and though they agree on the overall viability of lean manufacturing concepts, they sometimes disagree on particular points. Overall they will describe the concepts, discuss its potential, the signs of success, and problems that still need to be worked through.

One difficulty with lean manufacturing is that it is a large concept evolving out of many different historical factors, and so it can seem a bit amorphous. So let’s start with a bit of history. The idea might be reasonably considered to have had its start by Henry Ford and his assembly lines, which were designed to make factory production work as efficient as possible. World War II, which required fewer people to do more in production, brought some added techniques. Certainly a prime mover was Edward Deming with his concept of quality control.

But the big movement in recent times was initiated by Taiichi Ohno at Toyota, who defined a systematic approach to identifying and eliminating waste through continuous process improvement. Some of the basic components of this system include: just-in-time production, set-up reduction, total productive maintenance, and the ‘SS’ system — Sort, Straighten, Scrub, Standardize, Self-discipline.

The SS system provides a foundation that allows a manufacturer to deliver high quality products in the right quantity at the right time to satisfy customer needs. Bottom line benefits include reduced waste, improved safety, easier maintenance, higher product quality, and improved profitability. This system has been used with great success at world-class companies in many industries.

So where does lean manufacturing come in?

"Lean manufacturing is a buzz word," said Earl Kline, professor of manufacturing systems at Virginia Tech. "I’ve been involved with continuous improvement for many years. It’s just started to be called lean manufacturing over the past five years." This is just as well, Earl indicated, for it’s a pretty new concept to the forest products industry.

Earl summed up the importance for thinking of new ways of improving manufacturing. "Wood companies in the U.S. are now not really competing against each other as globally. This has dictated looking at new ways to succeed."

Notably, the forest products industry previously had not followed the automotive industry’s success with continuous improvement. Also, what work has been done in lean manufacturing has been done mostly in the secondary wood products area rather than the primary or sawmill processing one. So, unless referred to specifically, the following discussion refers to the secondary wood products markets.

Here’s how Earl defined the concept specifically for wood products. "Lean manufacturing, simply defined, is a method of doing more with less," he said. "Specifically, lean can produce high quality products with half the effort, space, inventory, and product development time compared with traditional mass production. Lean principles encompass a systematic approach to identify and eliminate all the steps in the production of a good or service that do not add value to the final customer. The lean approach is the most comprehensive of the popular production management improvement initiates because it simultaneously addresses customers, product, process, and human related issues in the production system."

Sounds good. However, as Earl acknowledged, "Studies have shown that, while many companies claim that they are ‘lean’ or managing production according to TQM, JIT, Six Sigma, and so on, few are actually implementing the lean philosophy. In fact, while many understand the basic concepts and have tried various implementations as quick fixes to problems, most miss its full and lasting potential. The full capability of the lean philosophy involves creating a culture of observing and learning and an ability to implement, to innovate, and to continuously improve."

One of the many misconceptions about lean manufacturing, Earl explained, is that some think of it as only JIT (just-in-time), which is only one of the tools that might be utilized. "Some think you have to implement cellular manufacturing, which is basically creating little mini-factories or work cells, and if you don’t do that, you’re not fitting under the lean umbrella. Many think that lean means a reduction of the work force, which has already given lean a bad connotation. Lean really means how to utilize your work force so you get even more done. We have a saying, ‘Lean is not mean.’ And many people who are looking for cost reductions all at once are disappointed. They typically take place over several months."

Earl described lean as a ‘tool box,’ and you take out just the tools you need for a particular situation.

Yet still another problem, he observed, is that even if you choose the right tools and solve some bottlenecks and problems, there is a difficulty in sustaining the process. "The analogy I use is that of a messy garage. Many of us have a garage in which things get so messy we can’t find anything. So we clean it up, and it’s okay for a few months, but then things backslide and it gets messy again. You have to build in a process so your improvements remain, and you keep on building these improvements."

Still another barrier is resistance to change, the attitude that, ‘I’ve been doing this for 40 years, and who are you to tell me to do something different?’ "You have to be respectful to that," said Earl. "You can’t tell anybody what to do. All you can do is make suggestions as to how they might gain a competitive advantage and hope they say, ‘ah ha!’ "

Earl conducts workshops to try to introduce the concept to the forest products industry. "A certain number of pallet manufacturers have come to us," he said. "We try to work with them directly. And we teach our students. We like to think we are planting seeds which will come to fruition in the next generation of leaders."

In a general sense, the first step is to know your customer, explained Earl. "I see a lot of companies who don’t have any real data about their customers, so you can’t really zero in on their needs. What you have to do first is understand your customer."

The next step is tracking what he called the "value stream" — looking at each step from the arrival of the material through the production process and shipping, then taking feedback from the customers, and going through the value stream again, analyzing and refining each step.

Earl has some more specific steps, but for those, let’s turn to Brian Brashaw, program director of the Natural Resources Research Institute at the University of Minnesota. He also has been involved in introducing lean manufacturing to the forest products industry through industry outreach efforts. Brian has worked with all segments of the industry as well as brought together various state and federal agencies. He receives funding from the National Science Foundation, which, he commented, "typically funds more basic research projects."

The eight main dynamics of lean manufacturing, Brian said, "are rooted in common sense." Here they are:

"Typically, defects occur because the wood is inferior or the product has been built wrong," said Brian. "It costs time and money to go back and fix it. For instance, if you’re building a pallet and the stringer is in the wrong place, you have to go back and fix it. The key is
a systematic process to minimize
defects. This means providing adequate training and education so the product is designed well and a system is in place
for each worker to prevent defects from occurring."

"People typically make more than they need," said Brian. "If a customer puts in an order for 200, people think it’s easier to make 300 and put that extra 100 in stock on the basis that you’ll have it for the next customer. But you’re taking up floor space you might use for
something else. If you build to the order, you do it faster, more efficiently, and ship it sooner."

"Bottlenecks in manufacturing occur because of waiting for materials," said Brian. "Or people are waiting down the line because somebody who is supposed to be running the machine is cleaning up excess trim, changing the paint, or getting the next profile to run. Running things in batches magnifies the waiting."

The solution, he said, is combining many steps or having employees take on multiple responsibilities. "Henry Ford said the more we pick up things and move them around, the more it costs," noted Brian. "I once saw a drawer box that goes into a cabinet being picked up and set down 24 times."

"Many employees have worked in a plant five to 15 years or more and have never been asked or listened to," said Brian. "What has to be done is more than putting up a suggestion box. There has to be a formalized system in which people are actually trained to take waste out of the system and are listened to and empowered be a part of the team that actually makes changes. If employees have the buy-in, they will really be motivated to improve productivity. I’ve seen it really happen. On the other hand, if you don’t have employee buy-in, whatever changes you make tend to slide back to where they were before. Employees have to be a part of the solution."

"Moving material around the plant constitutes tremendous waste," said Brian. "When you move things in batches, you need a large storage area. And the reason things are moved around is due to a bad layout. I’ve seen people buy new equipment and say, ‘Where shall we put it? Well, here’s an empty space, let’s put it here.’ Again, every
time you pick it up and put it down, it’s
a cost."

There are three kinds of inventory, according to Brian — raw material inventory, the work-in-progress inventory that is between manufacturing steps, and goods waiting to be shipped. "Management sees this as a waste for it ties up money, but employees don’t," said Brian. "But it’s a waste on the production floor as well as for cash flow."

Here Brian referred to the wasted or unproductive motion of employees through the production process. This includes things like looking for the right tools or moving or carting goods between processes. Sometimes robotics or other machinery can cut down on employee motion. Ergonomics plays a big role. Strained employee motion is ultimately less productive and can cause injuries. A simple thing like having a table at the right height reduces worker strain and cuts down on moving material.

"I was in one plant and saw an employee spend a lot of time grinding a cast metal part, and at the other end another employee would take a hammer and bang it off," said Brian. "I was in a sawmill, and the employee at the end of the debarker would continually throw wood into a waste pile because he felt there was too much curve to it, but no one informed the employee loading the debarker not to put wood in with this type of curve. This happens all of the time."

Brian maintains that if these eight steps are followed, a manufacturer who gets an order at 8 a.m. can usually ship it by 4 p.m. "It‘s a much more efficient way to go."

(Editor’s Note: This is part one of a two-part series of articles on lean manufacturing; part two is scheduled to be published in the December issue.)

Try to get your mind around these two simple sentences at the same time: 1) lean manufacturing is a great way to increase productivity, and 2) very few people in the forest products industry are actually implementing it.

Why?

To start with, lean manufacturing is relatively new to the forest products industry. In this and the following article, we will hear from an academic, an implementer, and a researcher — though their roles sometimes extend beyond these definitions and overlap.

However, they come from basically different perspectives, and though they agree on the overall viability of lean manufacturing concepts, they sometimes disagree on particular points. Overall they will describe the concepts, discuss its potential, the signs of success, and problems that still need to be worked through.

One difficulty with lean manufacturing is that it is a large concept evolving out of many different historical factors, and so it can seem a bit amorphous. So let’s start with a bit of history. The idea might be reasonably considered to have had its start by Henry Ford and his assembly lines, which were designed to make factory production work as efficient as possible. World War II, which required fewer people to do more in production, brought some added techniques. Certainly a prime mover was Edward Deming with his concept of quality control.

But the big movement in recent times was initiated by Taiichi Ohno at Toyota, who defined a systematic approach to identifying and eliminating waste through continuous process improvement. Some of the basic components of this system include: just-in-time production, set-up reduction, total productive maintenance, and the ‘SS’ system — Sort, Straighten, Scrub, Standardize, Self-discipline.

The SS system provides a foundation that allows a manufacturer to deliver high quality products in the right quantity at the right time to satisfy customer needs. Bottom line benefits include reduced waste, improved safety, easier maintenance, higher product quality, and improved profitability. This system has been used with great success at world-class companies in many industries.

So where does lean manufacturing come in?

"Lean manufacturing is a buzz word," said Earl Kline, professor of manufacturing systems at Virginia Tech. "I’ve been involved with continuous improvement for many years. It’s just started to be called lean manufacturing over the past five years." This is just as well, Earl indicated, for it’s a pretty new concept to the forest products industry.

Earl summed up the importance for thinking of new ways of improving manufacturing. "Wood companies in the U.S. are now not really competing against each other as globally. This has dictated looking at new ways to succeed."

Notably, the forest products industry previously had not followed the automotive industry’s success with continuous improvement. Also, what work has been done in lean manufacturing has been done mostly in the secondary wood products area rather than the primary or sawmill processing one. So, unless referred to specifically, the following discussion refers to the secondary wood products markets.

Here’s how Earl defined the concept specifically for wood products. "Lean manufacturing, simply defined, is a method of doing more with less," he said. "Specifically, lean can produce high quality products with half the effort, space, inventory, and product development time compared with traditional mass production. Lean principles encompass a systematic approach to identify and eliminate all the steps in the production of a good or service that do not add value to the final customer. The lean approach is the most comprehensive of the popular production management improvement initiates because it simultaneously addresses customers, product, process, and human related issues in the production system."

Sounds good. However, as Earl acknowledged, "Studies have shown that, while many companies claim that they are ‘lean’ or managing production according to TQM, JIT, Six Sigma, and so on, few are actually implementing the lean philosophy. In fact, while many understand the basic concepts and have tried various implementations as quick fixes to problems, most miss its full and lasting potential. The full capability of the lean philosophy involves creating a culture of observing and learning and an ability to implement, to innovate, and to continuously improve."

One of the many misconceptions about lean manufacturing, Earl explained, is that some think of it as only JIT (just-in-time), which is only one of the tools that might be utilized. "Some think you have to implement cellular manufacturing, which is basically creating little mini-factories or work cells, and if you don’t do that, you’re not fitting under the lean umbrella. Many think that lean means a reduction of the work force, which has already given lean a bad connotation. Lean really means how to utilize your work force so you get even more done. We have a saying, ‘Lean is not mean.’ And many people who are looking for cost reductions all at once are disappointed. They typically take place over several months."

Earl described lean as a ‘tool box,’ and you take out just the tools you need for a particular situation.

Yet still another problem, he observed, is that even if you choose the right tools and solve some bottlenecks and problems, there is a difficulty in sustaining the process. "The analogy I use is that of a messy garage. Many of us have a garage in which things get so messy we can’t find anything. So we clean it up, and it’s okay for a few months, but then things backslide and it gets messy again. You have to build in a process so your improvements remain, and you keep on building these improvements."

Still another barrier is resistance to change, the attitude that, ‘I’ve been doing this for 40 years, and who are you to tell me to do something different?’ "You have to be respectful to that," said Earl. "You can’t tell anybody what to do. All you can do is make suggestions as to how they might gain a competitive advantage and hope they say, ‘ah ha!’ "

Earl conducts workshops to try to introduce the concept to the forest products industry. "A certain number of pallet manufacturers have come to us," he said. "We try to work with them directly. And we teach our students. We like to think we are planting seeds which will come to fruition in the next generation of leaders."

In a general sense, the first step is to know your customer, explained Earl. "I see a lot of companies who don’t have any real data about their customers, so you can’t really zero in on their needs. What you have to do first is understand your customer."

The next step is tracking what he called the "value stream" — looking at each step from the arrival of the material through the production process and shipping, then taking feedback from the customers, and going through the value stream again, analyzing and refining each step.

Earl has some more specific steps, but for those, let’s turn to Brian Brashaw, program director of the Natural Resources Research Institute at the University of Minnesota. He also has been involved in introducing lean manufacturing to the forest products industry through industry outreach efforts. Brian has worked with all segments of the industry as well as brought together various state and federal agencies. He receives funding from the National Science Foundation, which, he commented, "typically funds more basic research projects."

The eight main dynamics of lean manufacturing, Brian said, "are rooted in common sense." Here they are:

"Typically, defects occur because the wood is inferior or the product has been built wrong," said Brian. "It costs time and money to go back and fix it. For instance, if you’re building a pallet and the stringer is in the wrong place, you have to go back and fix it. The key is
a systematic process to minimize
defects. This means providing adequate training and education so the product is designed well and a system is in place
for each worker to prevent defects from occurring."

"People typically make more than they need," said Brian. "If a customer puts in an order for 200, people think it’s easier to make 300 and put that extra 100 in stock on the basis that you’ll have it for the next customer. But you’re taking up floor space you might use for
something else. If you build to the order, you do it faster, more efficiently, and ship it sooner."

"Bottlenecks in manufacturing occur because of waiting for materials," said Brian. "Or people are waiting down the line because somebody who is supposed to be running the machine is cleaning up excess trim, changing the paint, or getting the next profile to run. Running things in batches magnifies the waiting."

The solution, he said, is combining many steps or having employees take on multiple responsibilities. "Henry Ford said the more we pick up things and move them around, the more it costs," noted Brian. "I once saw a drawer box that goes into a cabinet being picked up and set down 24 times."

"Many employees have worked in a plant five to 15 years or more and have never been asked or listened to," said Brian. "What has to be done is more than putting up a suggestion box. There has to be a formalized system in which people are actually trained to take waste out of the system and are listened to and empowered be a part of the team that actually makes changes. If employees have the buy-in, they will really be motivated to improve productivity. I’ve seen it really happen. On the other hand, if you don’t have employee buy-in, whatever changes you make tend to slide back to where they were before. Employees have to be a part of the solution."

"Moving material around the plant constitutes tremendous waste," said Brian. "When you move things in batches, you need a large storage area. And the reason things are moved around is due to a bad layout. I’ve seen people buy new equipment and say, ‘Where shall we put it? Well, here’s an empty space, let’s put it here.’ Again, every
time you pick it up and put it down, it’s
a cost."

There are three kinds of inventory, according to Brian — raw material inventory, the work-in-progress inventory that is between manufacturing steps, and goods waiting to be shipped. "Management sees this as a waste for it ties up money, but employees don’t," said Brian. "But it’s a waste on the production floor as well as for cash flow."

Here Brian referred to the wasted or unproductive motion of employees through the production process. This includes things like looking for the right tools or moving or carting goods between processes. Sometimes robotics or other machinery can cut down on employee motion. Ergonomics plays a big role. Strained employee motion is ultimately less productive and can cause injuries. A simple thing like having a table at the right height reduces worker strain and cuts down on moving material.

"I was in one plant and saw an employee spend a lot of time grinding a cast metal part, and at the other end another employee would take a hammer and bang it off," said Brian. "I was in a sawmill, and the employee at the end of the debarker would continually throw wood into a waste pile because he felt there was too much curve to it, but no one informed the employee loading the debarker not to put wood in with this type of curve. This happens all of the time."

Brian maintains that if these eight steps are followed, a manufacturer who gets an order at 8 a.m. can usually ship it by 4 p.m. "It‘s a much more efficient way to go."