Industrial Revolution

I bought a business on April 1, 2005. I'll update the blog a few times a week to share some of my experiences.

Tuesday, April 19, 2005

Our first process improvement

We did our first process improvement activity in the factory today. It took about 90 minutes. I introduced the concept of a kanban to everyone. Kanban is a Japanese word for signal. In our case, it means that people will not perform any process that has not been called for by their downstream customer.

Let me be more specific. We take aluminum tubing and cut it into pieces which are formed, punched, burnished and then assembled into the candle tubes inside the Original Candle Lantern. In the factory today, not counting the raw material (tubing on the shelf in our receiving area) we have enough product to serve our customers for 92 business days, or about 4 months. Ultimately, I'd like for that number to be just a few days, but the work we did today in 90 minutes should drop 30 or so days from the total. It will take about 8-10 weeks for these changes to propogate through the system so we won't see the results right away.

To explain what we did, let me compare before and after:

Before: Everyone would build as much product as they could with the raw materials they were provided. They looked upstream for signals to build (are there any raw materials for my step in the process?) and they would work until they drained all the upstream materials. Partly as a result, there are enough candle tubes which have been punched but not burnished to last us for 10 weeks.

After: The new rule is that people will only build if there's an empty bin from their customer available to receive their product. Otherwise they should stop (meaning: work on something else). Because we will limit the number of bins in the system, it will be physically impossible to carry more than 2 weeks of tubes between punching and burnishing. We'll have to wait 8 weeks for the excess inventory to burn off, but after that we'll have lower inventory, more space on the shop floor, and we'll still be able to deliver the same amount of high quality product on time.

I swear it's like magic!

Actually though my favorite part of the day was when I gave some general guidelines for improving the bins. The guys in the shop used a single sheet of plywood, a two-by-four, and four screws to (a) cut the capacity of the bin in half from 2 weeks inventory to 1 and (b) make the bin easier to use and empty than before. All this by simply making the plywood into a ramp which sliced the bin in half from the top of one side to the bottom of the other side. (This clearly needs a picture. I'll work on that). I was thrilled that they took my general/vague instructions and turned them into a wonderful improvement!

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