GA Manufacturing Extension Partnership (GaMEP) Georgia Tech

Four Steps for Driving Down Product Costs

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It is likely that your firm has a number of “cost reduction” projects active at any given time. In most cases, these projects are created as opportunities arise. They enter the development process harmlessly and require relatively little resources or capital investment compared to larger programs. If your company is like many others, these projects are handled on a first-come, first-served basis and are not subjected to prioritization based on value or resource utilization. Although these projects tend to have small impacts when viewed individually, they can provide significant overall savings to a company’s bottom line.

However, if they are not managed correctly, they take up more time and resources than originally planned and drive up costs. If they are proactively managed as a portfolio of cost improvement projects, bottom line savings can be greatly enhanced. This can be done by formalizing a process and assigning a team leader. Here are four steps to get your program started in the right direction.

  1. Proactively create a large list of opportunities: Having more proposed projects than resources will allow you to make choices and increase your annual savings. Start by putting together a list of currently known opportunities, including those already being developed. Next, begin identifying new opportunities. This is best done by holding special events such as competitive analyses and value engineering. During these initial sessions, concentrate on your highest volume and least complex products to gain quick wins and build excitement. Study your products, looking carefully for design and process opportunities. Invite management and employees from all departments, along with trusted vendors and customers, to be part of the process. Using a cross-functional team for these events will increase the volume and quality of opportunities and bring all critical functions into the process.
  2. Prioritize the list: While the team is assembled and your list of new opportunities is fresh, it is important to get them prioritized. Initially, a simple pareto analysis (the 80:20 rule) can be used to bring the most valuable opportunities to the top. A more detailed ranking of the top 10-15 opportunities can then be performed. It is easier to gain consensus by using a numbered ranking system in an open forum. Although this will still be subjective, it will create synergy within the group and avoid having “pet” projects given priority.
  3. Assign the top projects: It is important at this point to be realistic and only assign projects where sufficient resources are available. It is tempting to overload the system, but far more productive to have a few projects on the fast track. Remember, savings can only be generated when projects are completed and in production.
  4. Maintain the process: This is the most important part. It ensures the longevity of the entire program and is the reason you must assign an individual to oversee it. Hold regular monthly meetings to track progress, assign new projects as resources are available, and schedule opportunity generation events as needed. It is also important to use these meetings to communicate success to upper management. A list of completed projects and annual impact should be tracked and used as a tool to further manage the program and justify additional resources.

By strategically managing your development process, you can create significant opportunities for your company while keeping your product costs low and improving margins without adding resources. For smaller organizations, learning and implementing a few new process tools can be the difference between barely surviving and being profitable in the years to come.

For more information on what your company can do to create, implement, and manage a process to help drive down product costs, contact Bob Wray at ude.hcetag.etavonninull@yarw.trebor.

About GaMEP

The Georgia Manufacturing Extension Partnership (GaMEP) is a program of Georgia Tech’s Enterprise Innovation Institute and is a member of the national MEP network supported by the National Institute of Standards and Technology (NIST). The GaMEP, with offices in nine regions across the state, has been serving Georgia manufacturers since 1960. With a broad range of industrial expertise, the GaMEP helps manufacturing companies across Georgia grow and stay competitive. It offers a solution-based approach through technical assistance, coaching, education, and connections to Georgia Tech, industry and state resources designed to increase top line growth and reduce bottom line cost.

By: Bob Wray, Project Manager, Georgia Manufacturing Extension Partnership

How Will Combining Safety and Lean in Process Improvement Efforts Increase Productivity?

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How Will Combining Safety and Lean and Process Improvement Efforts Increase Productivity?

The practices of safety management and Lean production have for many years been implemented separately in most industrial plants. The complexities of regulatory compliance have in large part dictated that separate specialists be dedicated to each area. Over time, in fact, these two essential functions have diverged to the point of being adversaries in many plants due mainly to their seemingly opposed agendas.

So how can workers be kept safe while maximizing production? Seldom have these issues been approached together in a concerted way, but recently some managers have discovered the common ground through a method called Value-Added Safety. Manufacturing companies that realize they need better collaboration between their safety and production people have even begun to merge the traditional roles of safety professionals and lean leaders.

To be effective in both roles, however, each group must be proficient in the practice of the other’s discipline. Designing a process or workstation from the start with good safety practice in mind can make for more robust standard work documents, as many of these documents do not now include safety procedures. Conversely, the approach to safety protection can be simplified, and sometimes eliminated, when a process improvement change does away with the hazard or reduces the frequency of dangerous tasks in the workplace.

Examples include:

  • Saving money on Personal Protective Equipment (PPE) if the process improvement changes the procedure
  • Getting a production line up and running faster by simultaneously addressing both safety and production needs, both of which are essential to good manufacturing practice.

Bridging the gap between the best way and safest way to do a job is what the Value-Added Safety method seeks to do.

Recognizing the Impacts of Safety

“Safety is value-added, and hazards are waste,” says Damon Nix, Group Manager – Operational Excellence at GaMEP, one of the innovators of the method. This phrase helps us visualize the integration of safety and process improvement in the familiar language of a Lean practitioner. Consider the Eight Wastes and their impact on safety hazards:

  • Defects – Increased maintenance activities, hazardous material exposure, machine exposure
  •  Overproduction – Overexertion, extra handling, unnecessary machine interaction
  • Waiting – Setups/Changeovers – hazardous energy exposure
  • Not Using Employee Ideas – The company misses out on potential safety improvements
  • Transportation – Extra handling, slip, trip and fall hazards, exposure to fork lift traffic
  • Inventory – Falling loads, traffic congestion, trip hazards, extra handling
  • Motion – Overexertion, poor ergonomic design
  • Extra Processing – Unnecessary machine interaction

In a technique similar to the way that lean production managers now conduct “waste walks,” the method equips users with the tools to expand the scope of these walks, having “eyes for hazards and waste,” and beginning to naturally identify opportunities for improvement in Lean and safety at the same time. This will lead to a culture in which the safety professional and the production manager are not adversaries, and where safety improvements come built in and are not just a regulatory measure or afterthought to your workplace layout.

Identifying Projects

In many plants, safety statistics are aggregated into facility-wide performance indicators. This practice homogenizes the data and does not provide the information needed to identify and address problems. This often leads to broad-stroke safety policies and delayed solutions to potential hazards. Using the proven tool of Value Stream Mapping (VSM), the Value-Added Safety method helps you get to the root of the activities from a process level, not just a plant level. So when improvement teams collect their initial data, they will compile statistics on each step of the process, highlighting the riskier areas of a production operation. Each process will continue to be evaluated on production measures such as cycle time, work-in-process inventory, and set-up time. In addition to these typical production measures, data will be gathered on measures of:

  •  Productivity Impacting Safety Wastes – Lost days, lost productivity
  • Quality Impacting Safety Wastes – Total incidents
  • Cost Impacting Safety Wastes – Direct costs paid, indirect cost impacts

This will bring into focus where the hazards lie within your plant and allow you and your managers to focus attention on improving the areas found to be of most concern.

Safety by Design

One of the primary objectives of the Value-Added Safety method is to design safe processes from the start. By combining the tools of 5S/6S and the Hierarchy of Safety Controls, you can seamlessly integrate the countermeasures of Elimination, Substitution, Engineering Controls, and Administrative Controls within the context of the 5S/6S program before having to resort to PPE (personal protective equipment) for equipment operators. For instance, during the “Set-in-Order” step that dictates the process for a new workplace layout, potential safety hazards can be considered right alongside concepts such as point-of-use-storage and material presentation.

Implementing Lean principles and good safety practices together should be a gradual process for companies that have historically operated the two separately (or not at all). There are many considerations to be made in terms of production expectations, safety regulations, and existing company culture. The Safety Integrated Process Improvement method allows safety professionals and Lean production managers to speak the same language and solve problems similarly.

Contact

For more information on how to successfully account for both safety and lean while implementing process changes contact Damon Nix at ude.hcetag.etavonninull@xin.nomad.

By Tom Sammon, Project Manager, Georgia Manufacturing Extension Partnership

6S: Getting Standardize Right

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Whether a project involves cleaning out a storeroom or organizing an office or work space, the 6S process of Sort, Set in Order, Shine, Safety, Standardize, and Sustain is typically the same. The initial effort of sorting, cleaning, and organizing yields the greatest visible results, as well as the satisfaction of seeing improvements. After the flurry of this “3S” activity, however, many organizations falter in their improvement efforts. It is after the tour or audit has come and gone, and after the boss has moved on to another priority that the real test of 6S comes.

To succeed in the long term, 6S must move beyond the project stage to become the way an organization operates, that is, to be part of the culture of the workplace. For that to happen, the users of the system must understand the reasoning behind the process and agree with its usefulness. Simply demanding compliance will yield short-term results at best, with an eventual return to the original state.

Addressing questions like these in the Standardize phase of a 6S effort should drive your team to implement lasting changes in the target environment.

  • Why are we changing? Discuss the benefits of the effort in practical terms of safety, inventory costs, searching time, space, etc. Making the place look nice is a great benefit, but it’s unlikely to be a strong motivator.
  • What is the new standard? A clear definition of the new expectations will be helpful, especially in the form of pictures and checklists of the ideal state.
  • What new procedures do we expect people to understand and follow? Think specifically about what people are expected to do differently, and make sure they have the necessary training and coaching to do it.
  • How will we communicate these procedures? Don’t assume that everyone will know what to do – think about how they will know and plan appropriate team meetings or other methods of communication and follow-up discussions.
  • Is the new standard condition obvious? If the proper visual controls have been installed, it should be clear to users and managers if a non-standard condition exists in the target area. Problem recognition should be immediate.
  • Have we made it easy to do the right thing? If the new process places a burden on employees, it is unlikely to be followed for long. The design of the work should facilitate the process, not obstruct it.

Put yourself in the position of a person who works in the 6S target area. At the end of this process, could you answer these questions: What am I supposed to do differently? How am I supposed to do these things? Why is this important?

Thinking through these people issues during the Standardize phase can make all the difference in whether the 6th S – Sustain – is successful. Considering how people understand and respond to the 5S changes establishes the foundation for further success in the organization, and that starts with people.

By Paul Todd, Project Manager, Georgia Manufacturing Extension Partnership

Shift Schedule Considerations

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There is little academic research as to the advantage or disadvantages of a 4-day; 10-hour (4/10) shift versus a 5-day; 8-hour (5/8) shift. When determining the best shift schedule for your operation, there are multiple things that you should consider. These include things such as employee desire, customer demand, efficiencies, and safety.

Key Considerations
Employee Desire
Statistics from the Society for Human Resource Management indicate that 31 percent of employees were in a compressed workweek schedule such as a 4/10 shift and a wide majority find it favorable. Wadsworth & Facer (2008) show that more than 70% of employees favor 4/10 schedules. Additionally, 2008, researchers from Brigham Young University conducted a series of surveys and found that about four-fifths of the employees reported a positive experience working that type of schedule. Surveyed employees listed improved morale, work-family balance, more daylight for leisure, time for second jobs, reduced commute time, and lower cost for travel and child-care as 4/10 benefits.

Customers and Suppliers
Customers
The pace of customer demand must also be considered when changing shift schedules. Customers may need to adjust their ordering cycle to adjust to your new schedule. If you are shifting from a 5/8 to a 4/10 schedule, you must consider the additional 2-hours of work per day. Does your order flow or work schedule provide 10-hours of work per day at the current pace? If you are considering a switch from 4/10 to 5/8, can the work be spread across the additional day and still meet your customer’s order flow?

Suppliers
You must also consider when your suppliers make deliveries. If you are moving to a compressed workweek, Just-In-Time inventory policies may need to be adjusted to ensure a sufficient supply of materials. This may mean changing order quantities and delivery dates. Also, your warehousing requirements may increase by at least 20%. Ensure you have sufficient space for the additional materials, or you may need to schedule multiple daily deliveries. If you are considering a move from 4/10 to 5/8 you may have to schedule additional deliveries.

Productivity
When evaluating productivity, few studies that overcome the problems of differences in the workforce or work practices. However, most of the data does not indicate productivity improvement differences between a 5/8 and 4/10 schedule. Companies must perform this analysis themselves over time to see how the different shift schedules affect the productivity of their workforce.

Employees can save money on transportation during a compressed work-week and companies may see a reduction in overhead such as electricity and water as the operation is maintained one fewer day per week.

An additional consideration is the condition of the equipment. Equipment that has been conditioned to run 8-hours a day would run 10 under a compressed 4/10 schedule. Maintenance plans and schedules may have to be adjusted along with the shift.

Smaller groups
Smaller support groups such as cleaning crew, maintenance, and the warehouse have been shown to have a slight increase in productivity when shifting to a compressed scheduled. The off-day in a 4/10 schedule allows these groups to perform some of their activities during times the operation is not running.

Safety
There is little data to suggest increased safety concerns in a 5/8 versus a 4/10 schedule. However, Dembe (2017) points to a variety of studies on the potential dangers that can occur as the result of the additional risks created when work demands exceed a certain threshold. Most of these studies suggest that the dangers are most pronounced when people regularly work more than 12 hours per day or 60 hours per week. Dembe (2005) found that the risk of suffering an industrial accident is raised by 37 percent for employees working more than 12 hours in a day. The risk is 61 percent higher for people in “overtime” shifts. Working more than 60 hours in a week is related to an additional injury risk of 23 percent. As the hours worked in those schedules increase, the risks grow accordingly.

Considerations when changing a shift schedule
Before you change from a 5/8 to a 4/10 or from a 4/10 to a 5/8, the research suggests that there be a program worked out in advance by both managers and employees. All concerned parties must be involved in the decision-making process and that there must be clear explanations as to why things may need to change.

Try starting slowly and implement one four-day work-week a month or one five-day work work-week a month. That will allow time to solicit feedback from your employees and customers. It will also allow time to adjust schedules for shipments and deliveries. During this time, you should monitor employee productivity to make sure goals are still being met.

Considerations when adding a second or third shift
Before adding a second or third shift to an operation, please consider the fact that multiple shifts may result in higher overall costs that are required for shift premiums, nighttime lighting, quality control, and safety measures. Research has also identified that the utilization of evening and night shifts causes higher rates of labor turn-over and absenteeism that could lead to project delays and cost overruns.

In addition, productivity across different shifts can vary greatly. This reduction reflects on a number of underlying factors, including less experienced employees, a disturbed social life, shortened and disturbed sleep, and disrupted circadian rhythm.

Figure 1 below shows the relative performance across a 24-hour day with the worst efficiencies seen from midnight to 6am.

Figure 1: Industrial performance efficiency over the 24-hour day


Note. Reprinted from “Shift work, safety, and productivity”, by Folkard, Simon and Tucker, Philip., Occupational Medicine, Volume 53, p. 96.

Conclusion
Changing or adding shifts can have a great impact on employee morale, efficiency, and safety. By considering the factors mentioned in this report, you can make the transition smoother for your organization.

References
Dembe, A. (n.d.). No, we shouldn’t switch to a four-day Work-week. Slate Magazine. https://slate.com/business/2017/09/you-dont-want-a-four-day-workweek.html
Dembe, A. E. (2005). The impact of overtime and long work hours on occupational injuries and illnesses: New evidence from the United States. Occupational and Environmental Medicine, 62(9), 588-597. https://doi.org/10.1136/oem.2004.016667
Facer, R. L., & Wadsworth, L. (2008). Alternative work schedules and work–family balance. Review of Public Personnel Administration, 28(2), 166-177. https://doi.org/10.1177/0734371×08315138
Folkard, S. (2003). Shift work, safety and productivity. Occupational Medicine, 53(2), 95-101. https://doi.org/10.1093/occmed/kqg047

By Ben Cheeks, with the Georgia Manufacturing Extension Partnership

What You Should Consider Before Implementing Electronic Work Instructions at Your Plant

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As technology on the shop floor continues to advance, manufacturers are becoming more aware of new software tools and mobile hardware platforms, such as tablets and hands-free smart glasses, that are making a significant impact on the manufacturing process. On the market today, there are a variety of wireless software applications and tools available that are making processes more efficient by incorporating the use of Electronic Work Instructions (EWI) and data analysis functionality. Designed to capture step-by-step actions, EWI are readily available to everyone who may need them on the shop floor via tablets or wearable electronic devices, and can significantly reduce the difficulty and time lag involved in keeping instructions up-to-date. With the use of EWI, manufacturing companies are able to eliminate the need for paper instructions and can begin their transition from a paper-based environment to a digital one, which will ultimately encourage enhanced productivity, improved operations and traceability, cost-savings, and increased customer satisfaction.

While it can be tempting for manufacturers to quickly transfer to a digital environment in order to start reaping the benefits, it is important to understand that not all of these software applications are a “one size fits all” package. There are several considerations that must be taken into account before implementing any new type of technology at your plant. To better understand the employee experience with implementing some of these new software tools in manufacturing environment, the Georgia Manufacturing Extension Partnership (GaMEP) at Georgia Tech recently worked with three different companies over the course of six months as they each investigated a different Software as a service (SaaS) platform. After conducting these implementations, GaMEP identified some of the challenges that the manufacturers faced and as a result came away with some lessons learned and tips for those who are looking to implement EWI through similar software applications. 

Understand your budget and what it will get you.

Before you sign off on purchasing a new software package, make sure you understand how this new technology can truly tie into your current system and what exactly is included in the package you are purchasing. If you are going to need integration with existing ERP systems and data import/export through the software, this must be accomplished through API programming. This additional programming may not be included in the basic software and can be costly ($10-50k) if you do require customization by the vendor. Be prepared to discover that not all standard reporting and visualization of results will meet all your needs and customization may be required to display data in the format required for the operation.

Be aware of the learning curve.

If you choose to implement EWI using smart glasses, be prepared to find that this technology may have a learning curve when it comes to navigating within the software. Detailed drawings or verbose work instructions have viewing limitations that must be taken into account when designing work instructions. Note that it may take some additional time and training before your employees become proficient using these new tools.

Find comfort in the cloud.

Understand that once you start using EWI, you will be moving from paper to digital storage, particularly through cloud-based technology. If you are not yet comfortable or familiar with storing your data and programs in the cloud, take some time to educate yourself on this process and decide if there are items that should remain stored outside the cloud, such as signed documents that could pose legal ramifications with noncompliance if stored digitally. Additionally, it is recommended that you have security measures in place to protect your data from getting into the wrong hands and to back up information regularly to ease the recovery process in case of a system crash.

Confirm a strong Wi-Fi connection.

If employees are going to be interacting with mobile electronic devices, a strong Wi-Fi connection throughout your plant is crucial. These devices will not be as effective if your plant is riddled with dead spots. Make sure you explore your plant to confirm there is a reliable Wi-Fi connection in all areas where employees will be using their tablets or smart glasses.

Evaluate your instructions.

The level of detail in your instructions may help determine which device will be the best fit. Smart glasses may be better suited for more simple instructions while tablets will be able to accommodate more detailed instructions. Especially in a case where there is a high product mix, you’ll want to choose a tool that will be able to handle communicating many different steps or part numbers.

The numerous benefits that result from implementing EWI are a strong incentive for manufacturers to make the switch to a digital environment. However, it is also possible for there to be some confusion as to whether your company is truly ready to make this transition. GaMEP, as an unbiased party to any technology in the marketplace, can assist you in this process by conducting a gap assessment to provide you with technology knowledge and recommendations. Following the assessment, you’ll be better prepared to determine what new technology you can implement that will align with your organization’s goals and make a large impact on your production and bottom line.

For more information on how GaMEP can help you integrate technology solutions, contact:

Don Pital, Growth Services Manager
Expertise includes: Ideation Process Management, Lean Product Development, Quality Management Systems
Georgia Manufacturing Extension Partnership (GaMEP) at Georgia Tech
ude.hcetag.etavonninull@latip.nod