How to restore margins on manufacturing small-batch production runs in a built-to-order manufacturing value stream

Posted by Tom McDevitt on Jan 27, 2016 8:00:00 AM

Recently The Rose Corporation hosted the Pennsylvania Lean Thinking Network.  The theme of the day’s meeting was, The House of Change, a theme based upon Claes F Janssen early 70’s work, The Four Rooms of Change.

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In brief, Janssen holds that we as individuals or organizations, in all change, go through the same process and in the same sequence; moving in the same direction each time we implement change.  “We move from a Contentment, which is lost, via a period in Denial, which is a defense of the old, through Confusion, which ends when we give up whatever it is of the old that had to be given up. The giving up is the turning point, making us open to the possibilities, the new, whereby we move on to Renewal”. (The Four Rooms of Change, by Claes F Janssen). 

Limited-run components are products that in recent years benefited greatly from Rose coworker’s efforts to improve efficiency, quality, and throughput that drove upward profitability on these items. Many or our coworkers recognized it was time to move through the change cycle and find meaningful ways to counteract the decline in profitability on limited-run products.  Coming together in a most remarkable way, six focus teams, comprised of coworkers from different areas of The Rose, set their sights on change that would return to profitability production activities on complex, limited-run or one-off components. 

In practice, these teams were holding true to the PDCA Cycle (Plan, Do, Check, Act), a foundational component of an effective continuous improvement culture.

Rose’s Director of Project Management, John Bonanno, was given the task of organizing these six teams and working with each group to ensure continuity of purpose.  John, along with Rich Randall, Scott Faust and Alan Noll, recruited coworkers for each team; coworkers directly involved in each, specific area of the business charged with bringing about change within their sphere of influence.  And so it was that the following six focus teams and their respective members began to work on process improvements:

  • Welding (Scott Faust**, Pete Vucelich, John Bonanno)
  • Blast and Paint (Bob Skorupsky**, Hector Guilbe, Pete Vucelich, Terry Latchford)
  • Machining/Valves (John Gauger**, Rich Randall)
  • Assembly (Alan Noll**, Emilio Guilbe, John Gauger, Mitch Gould, Chad Cavanaugh)
  • Valves/Procedures (Bob Cutlip**, Dave Myers, Luis Diaz, Jeff Young, Chad Cavanaugh)
  • Facilities Space Utilization (Scott Faust**, Terry Latchford, Bob Cutlip)

** Team Owner

The results of each team’s efforts are truly substantial and already achieving the unified goal of improved profitability on the target limited-run parts.  If one considers the fact that we were well into the second quarter of this year when the need for change was recognized, then the magnitude of change and the scope of improvements become even more impressive.

Dwight Bowen, Continuous Improvement and Management Coach, and founder of the Pennsylvania Lean Thinking Network, had this to say about our company’s commitment to improvement:

“We toured assembly, machining, shipping/receiving and blast/paint in the morning.

Wow!  I have been working with Rose for 11 years and was blown away by the

improvements and engagement of the teams.  All tour presentations were provided

by those who do the work.  A very, very impressive morning.  Congratulations to all

at Rose.”

Dwight’s enthusiasm was shared by the other twenty five members of the Pennsylvania Lean Thinking Network in attendance at The Rose on December 10th.  As one guest commented, “I don’t need to see your financial statements to know you are more profitable on these parts.  I can see improved profitability just by how the parts move through The Rose Corporation’s value stream and the improved levels of organization and flow, and the reduction of wasted motion and transportation.”

In a departure from the typical Lean Network meeting agenda where the host company presents a lengthy, detailed discussion of the meeting’s topic, The Rose Corporation at this last meeting presented a very brief, five minute introductory program explaining Janssen’s Four Rooms of Change as the framework of change for our six focus teams, and following this brief introduction we headed directly into the shops where fellow Rose coworkers presented in detail the many, many continuous improvement changes implemented to return to profitability production activities on one-off and limited run products.

Emelio Guilbe took the lead presenting on the Assembly Department’s improvements.  Manny Villanueva, Rene Linval, and Wilberto Rivera also presented on some of their own continuous improvement projects within assembly.

Hector Guilbe presented on improvements made in the Blast and Paint Department; improvements such as fixturing designed to eliminate setups and improve cycle times.

Robert Parker presented on improvement activities within his sphere of influence, Shipping and Receiving; improvements that eliminate errors with inventory and improve flow of commercial items into assembly and other areas of The Rose value stream

John Gauger presented on machining process changes, as well as coordination with Rose’s Prep Department that resulted in reduced setups and improved cycle times.

In every case, the presenting focus group members gave recognition to coworkers up and down the Rose value stream, both directly and indirectly involved in the process, pointing out the depth of collaborative efforts that brought about the necessary renewal and once again proving The Rose Corporation is truly a Continuous Improvement Company.

As is the routine at all Lean network meetings, guests in attendance are asked to share two observations based upon what they saw during their time at the guest company; one observation regarding something they liked and one observation regarding opportunity for improvement.  The following table is a brief summary of these likes and opportunities presented to The Rose at the December 10th meeting:

 

LIKE

OPPORTUNITY FOR IMPROVEMENT

Color coding tying Assembly with Receiving

Move Ring Pre-kits closer to point of use

Point of use storage in Assembly

Items inside safety zones at electrical panels

Single-piece copper runs on RTO skids

Add more shadows on Shadow Boards

Color coding on RTO skids

Enforce hearing protection

Festoon system in Assembly for cords and air lines

Make sure chain tags are affixed to all chains

Better use of overhead cranes for specific tasks

Improve visual management in other shops

Cordless tools in Assembly eliminating trip hazards

Make crane pendants more visible

Material handling and setup fixtures

Paint entire length of fire extinguisher columns

Reduced cycle times

Establish Home Base for mechanic’s carts

Additional Pre-kitting

 

Quarantine zone in Receiving

 

Cross-team collaboration

 

 

 

 

 

The Rose Corporation is a Pennsylvania-based, WBENC-certified small business specializing in the manufacture of custom industrial fabrication, large-scale precision weldments, power generation equipment (including repairs), and more. The Rose Corporation’s most unique strength is our experience with delivery of specialized design expertise, along with an ability to help customers optimize manufacturability, reduce costs, and improve overall product quality.

 Click here to learn more about our  industrial fabrication capabilities