Saturday, January 26, 2008

Preparing For The Lean Journey

Okay, so we have a good idea of Ideal Tool Company, the imaginary tool and die shop of the future, one we envision as the acknowledged leader on the planet. How do we create it? More importantly, how can we change our existing shop to approach Ideal Tool's stature? It's simple, but not easy--take a Lean Journey, the phrase used by companies that are in the process of becoming Lean. The journey is long--in fact it never ends. Built on a foundation of Kaizen, the Japanese term meaning continuous improvement, it keeps making advances toward the goal.

Well, what is the goal of a tool and die shop, or any business for that matter? Eli Goldratt, in his landmark book, The Goal, defines it as "Making more money now and in the future." I think we'd all agree with that concept as the goal of a company, except not-for-profit ones that exist for purposes other than financial results. But even they require funding to accomplish their goals. Those organizations also need to operate in a Lean fashion in order to stretch the funds they have as far as possible. The Goal is based on concepts set forth in another Goldratt book, What is this thing called Theory of Constraints and how should it be implemented? The theory is widely known as TOC and has been followed by more than half a dozen of Goldratt's books, all about improving business operations.

TOC, combined with Lean Manufacturing principles developed by the Japanese automaker, Toyota, called the Toyota Production System (TPS) form the basis for a die making improvement initiative. The combination provides a powerful starter set of tools we can use to create the fictional Ideal Tool Company, or to make any tool and die operation become competitive globally--yes, even in high labor cost countries such as the U.S. We will use many other techniques, both new and old, as-is or revised, from others in our industry and outside it. Some have been developed by myself or are variations on those of other industries. I have compiled more than 200 individual methods, concepts and techniques over the past fifty-five plus years in tool and die. Many will be recognized easily but perhaps haven't been applied the way they are now configured in what I call an ideal toolbox.

So, where to begin? The first decision to make is how to approach this daunting task. We have two choices: go it alone or hire an expert consultant. Starting off on your own will save the cost of a consultant, but many mistakes will be made, a lot of detours and dead ends will present themselves. Wrong choices will be made at forks in the road. In fact, some paths will be taken because only a few choices will be perceived where other, in fact, do exist. With all the literature, media and other resources available on Lean Manufacturing, we find precious little pertaining to low volume, high mix (LVHM), because there are so few people who understand just how different mass production, or high volume, low mix (HVLM) manufacturing is, compared with LVHM. Make to order businesses are known as job shops, and which require a different application of Lean, TOC and the rest. Tool and die Lean is unique because only one tool or die is manufactured, but which can produce millions of parts.

The alternative, hiring a consultant, would seem a no-brainer choice as the way to go. However, the stumbling block in that scenario is finding a Lean expert who has the deep and broad knowledge of the tool and die trade and who has adapted the principles of Lean and TOC to this unique industry which only makes one of a kind products--dies, molds, fixtures, weld cells and the like. That is no trivial task, I can assure you, and is not easy, fast or cheap to accomplish. Hiring a consultant who thinks the principles can simply be applied by anyone skilled in Lean practices will find that the people working at the die shop will present hurdles they believe cannot be overcome and the consultant, not well enough versed in the trade, is unable to think through the seemingly impossible to overcome roadblocks that will arise time after time. Additionally, consultants don't come cheap.

The decision is a hard one to make because both options appear equally difficult. My experience, education, knowledge and skillsets equip me for the job, but my company has limited personnel who can step in and handle tool and die Lean assignments. But there is a way out of the dilemma. Join a group of shops interested in sharing the costs, as well as best practices, with each other--or create such an organization. We are working with a small number of individual shops now but are also in the beginning stages of forming a coalition of tool and die shops in Michigan which will extend to the midwest and even country-wide.

Hopefully you're not discouraged to the extent that you give up. You don't have to do that. Take the plunge--contact us for details of our "Smartnership" which will obtain funding, tax advantages and the benefit of sharing consulting costs and the work involved. Look at the expected results--reducing your costs enough to compete head-on with the likes of Chinese, Korean and soon, Indian and other low labor cost country competitors. Lead times can be reduced by half or better as well. It won't happen overnight, but if you don't get started, it never will happen.

Got enough to think about? Good. My next post will continue with other things you need to do when preparing to start your journey to global competitiveness.


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