Michigan manufacturers could strengthen their operations with help from a new Michigan State University initiative.
MSU’s Broad Business School and Lansing industrial titan Bill Demmer want to help them adopt so-called ‘lean manufacturing’ practices. Advocates say it could give the state’s legendary manufacturing sector a boost.
At MSU’s Broad Business School, Jim Manley speaks to his two dozen MBA students with the zeal of a preacher. Today’s sermon? The industrial gospel called ‘lean manufacturing.’ The class sets up six work stations around the lecture hall. There, students are assigned tasks that correspond to successive operations in a traditional, non-lean plant. Then, the proverbial shop whistle blows.
“Ready? Go,” he shouts.
OK, it’s a classroom, so it doesn’t have a whistle. The “products” start out as wooden blocks. Students shuttle them from work station to work station, attaching an index card here, adding a plastic baggie there. Mimicking the process in a real fabricating plant, they incrementally create the finished product. But soon it becomes apparent the system is uneven.
“I don’t want anybody sitting here doing nothing,” Manley calls out.
Excess blocks pile up at some stations, where workers frantically play catch-up. Others have none—they’re “starved”--and workers sit idle. Finally, the line has to shut down.
“I never, ever want to blocked or starved, or down,” he explains. “What’s the condition I want? You gotta remember this, ok? RUNNING. I want to be running. That’s how I generate revenue.”
In the real world, this same, sluggish scenario costs manufacturers. A 2011 survey by the North Carolina-based ‘Lean Sigma Institute’ shows companies with ongoing continuous improvement initiatives like ‘lean’ forecast higher revenue growth and income than others. Manley then digs in and analyzes the exercise in detail.
“So how many times did we open and close that bag?,” he asks. “Four times we opened and closed that bag. To what value to the customer? And the right answer is….zero.”
He and the students then make refinements that eliminate four unnecessary operations. Work stations are moved closer together. And the new lean operation actually increases output. It moves closer to the nirvana of ‘lean’--what practitioners call ‘one-piece flow.’ That’s no bottlenecks, no down time, all the while smoothly adjusting to fluctuating demand.
Lansing’s Demmer Corporation donated $5-million to launch the initiative at MSU. It wants to help Michigan companies implement lean. Not surprisingly, Demmer itself has begun this journey at its 60 year-old operation on North Larch. Standing next to a line turning out steel shelters used in war zones, Operations Manager Heather Shawa-DeCook explains how the company’s trying to even out—or ‘lean’--the flow of materials through the plant.
“If we have ten operations and if we’re not building within each operation to the schedule, we may overproduce or under-produce and that’s going to create a ripple in the flow and that’s going to produce a bottleneck in the flow,” she says.
And that always means excessive costs and lost revenue. Keep in mind that no shop floor anywhere ever attains perfection. That makes practitioners excited about the potential of ‘lean’ to boost productivity.
Some insiders say one challenge is record keeping. Chuck Haddon, head of the Michigan Manufacturers Association, says monitoring data is essential. He says it’s part of the lean transition that some operators resist. On the upside, Haddon says the model has implications for more than just manufacturing.
“I know that they’re now looking at hospitals,” he says. “They’re now looking at schools. They’re now looking at other places that they can put lean processes in and measure the results and make them just as effective and more efficient.”
Two recent trends appear to be accelerating the value of lean concepts. One is the return of manufacturing to the United States from abroad as companies try to tighten supply chains. Remember how the smaller “shop floor” in the classroom helped improve operations? The second is the unforgiving post-recession reality that says no company’s operations can afford to be inefficient.