Liquidation

Posted on January 7, 2017 by george

Ice melts all by itself

“The members will kindly refrain from picking up “lost” golf balls until they stop rolling.” This sign was spotted at a golf club. In the industrial arena, a similar sign could be erected – “The cost saving teams will kindly refrain from throwing out “unused” tools and equipment until the production workers quit using them.” We all realize that the cost saving pendulum has swung too far. What started out as a targeted focus on JIT snowballed into hoards of hastily trained teams introducing havoc throughout the enterprise. This got combined with a stock market appetite for instant cash returns.

PLC (programmable logic controller)

One of my close business associates was relating an illustrative story. He had just completed replacing the brand new PLC (Programmable Logic Control) in the piece of equipment he was commissioning with another brand. It turns out that this historic leader in the European PLC manufacturing industry had succumbed to the chain of cost cutting measures that they had implemented. After they had outsourced manufacturing, outsourcing product design and programming followed. A few rounds of supplier price claw backs convinced their contract manufacturer to release a competitive product of their own. Switching to a cheaper contract manufacturer nailed the coffin. A PLC control product designed in the last century is no longer capable of controlling the latest generation of equipment.

“The electric light did not come from the continuous improvement of candles.” Oren Harari
The survivors will emerge following the methodology of the start-up community. Start-up founders realize that you cannot foment a disruption by implementing a tiny improvement on the status quo. They discovered that cost is still every bit as important to business success. More importantly, a lack of accumulated resources taught them that it is more lean to begin by determining the minimum amount of resources needed to satisfy the customer. If you start at the lowest cost process, there is no need to risk liquidating the company by implementing the latest cost saving fad.

Gain

Posted on October 2, 2016 by george

Back in the early days of radio, the pioneering inventors determined that it was not enough to simply gather radio signals with ever larger antenna. They brought radio to the masses with the invention of the triode. This device amplified the small signal at the antenna to a level that a user could easily hear. The amount of amplification was measured as gain. The early triodes had gains of 10. The broadcast triods had gains many times that amount delivering broadcast powers of 50,000 watts. Even in today’s transistor world, we still use triodes to generate the final gain needed for broadcasting.
Arthur G McKee was the author of many of the patents that created the golden age of steel production in North America. He started an engineering firm, Arthur G McKee and Co, to gain from that talent. He needed to gather others to accomplish that gain. My dad, the son of immigrants, attended Fenn College an engineering school across the street from Mc Kee Company. Arthur worked with this school to find and train the best talent to become his workforce. An unwritten but understood bargain occurred between the selected talent like my dad and Arthur. Arthur transferred his engineering knowledge and paid professional salaries. My dad remained loyal to the company helping it make excellent profits for his entire career. Many of the colleges got their start this way. Fenn College is now Cleveland State University. With 25,000 students it has gotten away from training its graduates for a profitable lifetime.

The cost of a year of college has gone up 11 times what it cost in the seventies. We only wish wages increased to match

Now the millennials are entering the workforce. The old formula where employers would see a gain by investing in employee training has evaporated. In the short term we will experience a mismatch until a new pattern emerges that insures that a gain accrues to the people who invest in education. The thing that we know for sure is that the marketplace will reward the players who have the skills that are wanted.

Piece Count

Posted on August 14, 2016 by george

Adult puzzles have a much higher piece count than the simple puzzles of our youth.

We all played with puzzles when we were kids. These children’s puzzles had a limited number of brightly colored pieces. Training for the puzzles we face as adults starts in our youth. Many times the adult puzzle pieces themselves are not more complicated, it is just the piece count that goes up. I would not buy the blue puzzle shown in this picture. I would find it too time consuming and frustrating. However even with the deliberate camouflaging, this puzzle would be easy if it had the same piece count as a children’s puzzle.
I saw a great example of value of the piece count reduction technique in action back when Delco Remy of America was split off from General Motors. This flegling company had to launch a new generation of gear reduced starter motors to compete against Valeo.

Automotive starter motor picture by Wildre

In today’s lean fashion time and money were not in abundance. Their design team used the piece count of the Valeo starter as the design benchmark. My contribution as a supplier was to eliminate a $.01 washer. The piece cost reduction for the washer itself was not large, however the elimination of the machining to make a home for the washer was significant. Further compounding the gain was this machining cut away exactly the material needed to make the starter withstand harsh Quebec winters. Most engineers can count to 20, even if some need to take off their shoes to tackle the higher numbers. Since Delco Remy of America sells the majority of their starter motors offshore the piece count reduction technique also works in other languages. Only the historic Polynesian tongues lack the words to count to 100. (An historic Polynesian language switches to many for counts higher than 3)
A counter example is equally instructive. A bulldozer manufacturer elected to design a new generation vehicle in Europe.

Bulldozers are a workhorse of the
construction industry

The European design team continued its historic design procedure which did not include tracking piece count. A 30% higher piece count in the new design increased the amount of time and money needed to create detail drawings and prototype parts. The 30% extra detail engineering time forced a drawing change freeze. The drawing change freeze did not correct the higher tooling bill related to the higher piece count. Hiring an US cost analyst after the real components part price quote started arriving did not correct the resultant 30% higher manufacturing cost. The cost analyst could not coerce the buyers to choose a 30% higher cost product. It is unfortunate that a number of long term employees who were my friends lost their jobs when the US bulldozer assembly plant closed.
Currently I am designing an accelerator pedal assembly for an electric vehicle manufacturer. A pair of redundant return springs are used on this pedal to insure that it does not self activate and injure people. Toyota paid a high bill for a similar unintended acceleration issue. I have elected to replace a bolt, two washers and a nut, used to anchor one end of the return springs with a welded in rod. This piece count reduction solves a potential bolt loosening issue which is the primary reason for the change. The fact that a saw cut rod is cheaper than a bolt is just a secondary benefit.
Designing products with fewer pieces usually requires more engineering skill. In many cases, a product designed with a lower piece count has a higher end customer value. Certain other popular measurables such as SKU reduction, supplier reduction, inbound freight cost reduction, inventory cost reduction, assembly cost reduction, quality improvement and profit margin become other ways of expressing the benefit of making a product using fewer pieces. Our tasks becomes less of a puzzle if we are fighting with a reduced number of pieces.

Affordable Mass Customization

Posted on December 25, 2015 by george

The front wheel drive K-body became the parent for many vehicles including the successful Minivan

Chrysler almost went bankrupt when the first K-bodies came out. Fighting through dismal sales of historic rear wheel drive models, the K-body tooling bills, launch hick-ups, the finish line finally was in sight. Lee Iacocca was desperate for cash flow. All of the first vehicles in the initial build schedule were fully loaded with all of the options. All of the engineering thrifting needed to sell a vehicle for the $9800 advertised base price had been done right. Engineers become creative when their backs are to the wall. Changing the bumpers to shorten the vehicle by 2 inches so that 7 cars instead of 6 per row would fit onto the captive train cars used for vehicle delivery, saved $100 which was the profit on the base vehicle. Sticker shock killed the initial sales. Curious buyers attracted to the new model hype came into the dealers to see, but turned away when none of the lowest cost vehicles were on display. The funny part of the story is that the buying public did not want to purchase the base model with its manual transmission and vinyl seats. Chrysler did not want to make vehicles with manual transmissions or vinyl seats either because these components actually cost more than the cloth seats and automatic transmissions that actually sold. Actually, what turned out to be important was that the buyers wanted to judge the value of the options for themselves. Welcome to mass customization!
It is easy to determine whether a design is ready for mass customization. A manufacturer of excavators missed the mark by designing a custom frame for their combo dozer option.

Equipment that can fill multiple roles is easier to employ to generate a profit. An excavator that also functions as a bulldozer saves equipment mobilization.

It is possible that the mass customization that was accomplished through the use of welded mounting details showed as a cheaper manufacturing option. In reality a customized frame was never available to land a order from a customer who needed a timely delivery (Most customers do) For a little more piece cost, this offering could have been designed so that the option is nothing more than a bolted variation of the parent. I find it very interesting that companies such as Toyoda employ artisan craftsmen mechanics in separate facilities to flavor each vehicle to match the customers order. Yes, a change in thinking and a new manufacturing reality combine to satisfy a market demand for more customization without incurring excessive cost penalties.
Engineering is all about planning and implementing profitable future products. I am currently designing an electric vehicle.

A burden carrier delivers
parts at the Ford Rouge Assembly plant.

Even though lithium batteries like you find on a Tesla are a lower total cost option, it will be a while before the the buying public is educated enough to invest in the higher up front cost. This is where mass customization is all about planning for options. A good measure for my design success will be whether it is possible to offer all vehicle options from a common design frame. At the same time, it will be necessary to avoid penalizing the base model pricing when adding the design provisions needed to offer the full range of options.

Ed Kocsis

Posted on October 13, 2015 by george

In a die casting era before we had lean gurus, Ed Kocsis lived lean die casting with every ounce of his engineering thought. Part of his legacy is the NADCA die material cleanliness standards for premium H13. This is just one tool that enables the 500,000 shot life he achieved on dies like torque converter stators where heat check is a issue. A really high bar when 100,000 shot life is declared good even now.

Molten Aluminum causes major tip and sleeve wear

He bought shot tips at 4.5 inch OD and threw them out at 2.75 inches using them 20 times at .060 inches smaller in OD per renewal. The single design common shot sleeve for the plant (20 machines from 800T to 1200T) was the reverse it started at 2.75 inch ID and went out of service at 4.5 inch ID.

Prince Die Casting machine cartridge
closing manifold

He invented the cartridge valve manifold that became embedded within the Prince closing circuit, not for simplicity, but because it allowed the use of a 25% smaller electric motor and we stayed within available plant main transformer amps. Most of the dies he designed were loaded into the casting machine and were run continuously (even breaks were relieved) for a month. The 81% of theoretical yield (fastest that you can make a part divided into good parts sold) that was achieved during the 5 years I work with him (only shut down Christmas days) has not been approached at any other good casting house that I have been associated with since.

Ad Infinitum

Posted on September 6, 2015 by george

The human ability to invent acronyms is endless

Ad Infinitum
[ad in-fuh-nahy-tuh m]
adverb
1) to infinity, endlessly: without limit
Dictionary.com

The owners of companies invented the concept of auditors to insure that the management was caring for the capital entrusted to their keeping. The inventors of ISO-9000 correctly realized that elevating their cause to the same level as making a profit would accomplish the quantum leap needed to catch the Japanese. They invented metrics that were given acronyms so they looked the same as financial metrics. The war for corporate resources and attention is on. Now that most western companies have quality that is on par with Japanese (We are now chasing the Koreans), the other functional company groups have joined the bandwagon by using metrics and auditors to vie for attention. This battle has resulted in an explosion of acronyms which is expanding ad infinitum. www.acronymfinder.com is now listing over 4 million acronyms and the number is growing daily.
It would be nice to think that a talented individual leading a company could find the complete set of metrics needed to eliminate waste. This is like suggesting that it is possible to enforce perfect compliance to the speed limit by using speed traps. We all know that the more severe penalties applied to reckless drivers make a bigger dent in improving public safety. In this era of proliferating acronyms, data gathering can look like an overwhelming task. It is easy to despair, if you fail to understand the principles behind Pareto analysis.

Most of the profit comes from concentrating on the main chance

Even though all of the metrics that have been assigned acronyms have the potential for spurring an improvement, most of the benefit will occur by focusing on the top three. In a lean operation the front line worker is most aware that simply gathering metrics does not result in an improvement. As diminishing returns set in, many tabulated metrics remain static. Yes even metrics with acronyms have a “best before date”. This is not to infer that I am against gathering data. It is necessary to gather data to know whether the actions that you are contemplating actually generate an improvement. The first law of data gathering applies. [Only the person who gathers the data believes it] Every player on the team is responsible for knowing their numbers. Even the highest paid professional athletes continue to personally track their conditioning plan, in the same fashion that they employed to achieve superstar status. Making an improvement is the intersection of opportunity and the accumulated skills of each player. In a growing organization all players can quantify the improvements that they are making. This occurs because they do not waste time living in the past because they don’t track obsolete metrics ad infinitum.

Leaky Buckets

Posted on June 13, 2015 by george

It is hard to fetch water using a leaky bucket (bucket picture by Gregor Scheer www.gnu.org)

Most of us have been spared the chore of winding up water from a well. This task can be very tedious if most of the waterleaks from the bucket on the way up. This frustration gave us the word picture of a leaky bucket. Nature is a lot like a leaky bucket or herding cats. Every time we try to corral it into accomplishing a task, it dissipates our effort.
Sometimes our way of looking at a task clouds our vision as to how to measure efficiency. In the simple analysis, the hydraulic cylinders of an excavator efficiently deliver the applied engine horsepower to lifting the dirt out of the trench. Obviously the width of the boom sets the minimum width of trench that you can dig. The inventor of Ditch Witch wondered why you needed to dig a 12 inch wide trench to lay a 2 in diameter pipe. He invented a chain of buckets similar to a chain saw to slice a narrow trench. In my town they are adding in fiber internet using horizontal drilling. In true disrupting the disruptor fashion, efficiency is simply removing the dirt where the pipe goes saving all the restoration and inconvenience of trenching.

Ditch Witch picture USDA Photo by J M Villareal Horizontal Drill picture by FRAC

A light bulb is a much easier to understand efficiency example. Edison was extremely happy that his device generated light. The fact that it was a very leaky bucket changing 90% of the input energy into heat was of little concern at the time. Technology is all about corraling in nature. A 14 watt LED bulb can produce the same light as the original 60 watt incandescent bulb. Engineers notice technology details. The LED street lights that were just installed, no longer shine in my window affecting my sleep. Lean efficiency is all about concentrating the applied energy on the desired task.In this case the LED light is targeted at illuminating the street.

Energy efficiency is emerging in our lives

Computers are an even more dramatic example of how technology advance changes efficiency. Most of us have seen room size Univac Computers shrink into credit card size raspberry pi.

Univac by Matthias Kirschner at German Wikipedia
Raspberry Pi by cowjuice

Unlimited wants apply, we would like Dick Tracy style smart watches with one week battery life. The heroics of open heart surgery will disappear because stent are more effective. The operation was a success but the patient died from complications during the recovery.

Stent picture by Frank C. Miller

As we endeavor to support more people on a finite size planet, lean efficiency will be a controlling feature of our lives. We will learn that all losses from our leaking buckets are opportunities to improve.

Connect the Silos

Posted on April 25, 2015 by george

Dale Mahalko, Gilman, Wi USA

Anyone who has attempted to implement lean saving discovers that most companies operate inside little silos. The marketing department does not think that they need to link their actions to sales generated or prospects discovered. The engineering / product planning group believes that someone else should define the detail specs for the new product to be developed. The accounting group wants perfect projection of all future expenditures. The sales group wishes that the custom offerings desired by each customer can be delivered in the same time and same price as the standardized offering. We have all been around this merry-go round.

I started to wonder how we evolved to work in silos. I suspect that our upbringing is a factor. Our parents created a sheltered cocoon so that we could grow to the point that we could face all the challenges ourselves. Many of us first experienced swimming in the safety of a wading pool in our back yards.

Becoming a mermaid may be more exciting than we thought
pictures by ODDHARMONIC &AJCANN

A few of the high filers grew to revel in surfing the earthquake waves of the oceans. The work environment throws major challenges at us. I believe that silos have been created as a partial replacement for the cocoons that sheltered us in childhood.

There are high fliers in the business arena as well. In the successful start-up companies they are able to navigate in company size silos. Companies like GE have discovered that grouping high fliers into their own start-up silo is a effective formula to kick-start innovation. I am not sure whether the silo created for this purpose was an invention of the rest of the GE players. The jury is still out on whether it is possible to attract and retain a group of players who are comfortable in working in a company size silo. We will all be watching the Zappos experiment in holocracy

Design for Service

Posted on February 22, 2015 by george

We have all gotten excited by the 5S shine concept until we got out into the plant and tried to accomplish it at a reasonable cost. This is when it becomes evident if the manufacturing cell was set up with service in mind. In my career it has been necessary retrofit serviceability into a few plants that were not profitable because they had excessive down time. I would like to claim that I reinvented the equipment so that it never broke, but the technology to accomplish that approach is still way in the future. What I could do is speed up the process for repairing the equipment when it did break. This task would be easy if it only involved changing one item. The reality is that serviceablity is doing a whole bunch of little things right.
I have chosen to highlight a some examples that I recently implemented on a 3500 Ton Prince Die Cast cell at Cana-datum.

3500 ton Prince Sample
Die Casting Cell

1) Captivated bolts on guards – A surprising amount of machine repair time is lost simply looking for the bolts to reassemble after a repair. I discovered that washers welded to the bolts kept them from getting dropped and lost.
2) Hook on guards. I only use one bolt to attach my guards to the machine so that I conform to the safety standard for bolted guard. I turned around a plant loosing millions per year by changing guards
with 20 or so bolts into hook on guards with a single bolt.
3) Maximized crane drop in access by routing utilities in banks.
4) No utilities below floor level
5) Platform without leg bracing bolted at deck level instead of concrete floor anchored
6) Modularized platforms, auxiliary equipment – The items surrounding the main equipment can be quickly removed because they are in manageable chunks that can be moved with a lift truck.
7) Sweepable floor. Everything is off of the floor or contained with closed bases so that floor dry can be quickly removed when the spills occur.
8) All electrical junction box covers accessible without disassembly

Warehousing Now JIP – (Just In Panic)

Gallery

Posted on May 18, 2013 by george

This gallery contains 2 photos.

As we recover from the recession, the effects of the lean revolution are starting to show in our daily lives. We are migrating away from an inventory based system to a JIT based system. In the historic system, we … Continue reading →

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