Hit the Road: Turning the New Paradigm into Reality
Written by: James K. Allred

It will not, I hope, surprise you to learn that the saying "a journey of a thousand miles begins with a single step" doesn't necessarily refer to hiking way across the country. Like most such time-tested adages, it carries within it the seeds of a powerful truth. One that can be applied again and again to real-life situations. And so it is with dynamic material flow and the new manufacturing paradigm. To move your organization toward the goals we've discussed in earlier columns--faster cycle time, smaller lots, reduced inventory, higher quality, empowered workers--someone has to take that first step. Someone like you.

While you're lacing up your walking shoes, let's review the basic principles behind the new manufacturing paradigm so we'll know where we're headed. Principle number one: The material flow pipeline is the factory's foundational process. Whether you are going to redesign the work flow in your existing building or you are going to build a new one, the principle is the same. Plan your material flow first, then the building layout and the organization to support that flow. Your goal will be to simplify and shorten your pipeline, break down the organizational barriers, track and control materials in real-time, and decide where material buffers can smooth the flow and maximize your resource utilization. To get as close to Just-In-Time as possible and let your customers "pull" the work through your facility. In short, you are going to put the horse back in front of the cart, where it belongs.

Principle number two: Because reducing cycle time always (yes, always) results in lower inventory, better quality, and lower production costs, cycle time reduction must be the primary objective. Keep your eyes on the prize. Focus on cycle time from beginning to end, from purchasing and receiving right through to order filling and shipping. Force yourself to look not just at your functional processes, but the spaces between the processes. Stage small buffers of components and sub-assemblies near the point-of-use, not in some remote warehouse or stock room.

By the way, an important corollary of the cycle time principle is this: Whenever you are faced with a choice between simplified flow (and cycle time reduction) or high machine utilization, choose the simplified flow every time. The days when "keeping the machine queue full" drove the whole factory planning system are long gone.

A final principle is this: It is critical to empower workers with the tools and training to implement the new paradigm. Design your new factory to accomplish the maximum number of sequential steps in one location. Organize fast, flexible work cells and staff them with trained multi-task workers. Deliver the material to the workers--at the right time and in the right place. Don't send the workers out chasing down the material. And make sure that the workers can control the material flow to and from the workstation.

So, how do we begin? Well, first determine if you really need to begin at all. Below I've listed eight "never miss" symptoms that will tell you if you need to overhaul your system. Examine your operation and see how many of these symptoms it exhibits. Even one is not good news, but the more symptoms you can recognize, the more urgent is your need for a system shakeup. And no cheating.

1. Do you have more than three weeks of inventory on hand?



2. Is your average inventory error by SKU more than 1/2 of 1 percent?



3. Are your workplaces, aisles, or stock rooms cluttered and full of WIP?



4. Do your workers spend more than 20% of their time walking, waiting, or searching for material and tools?



5. Are your material flow patterns long and complex?



6. Do your supervisors spend more than 40% of their time expediting and "fire fighting?"



7. Are less than 95% of your customer shipments on time?



8. Is your actual cycle time more than three times your theoretical cycle time (the minimum possible time to process an order)?

If you answered no to all these questions, I hope you have a nice day. The rest of us are moving on to step two.

Get a layout of your facility and enlarge it until it is large enough to hang on the wall and be easily seen. Now, select one of your key products and, starting at the receiving dock, track the actual material flow path(s) production of that product through your building. At each place that material stops for whatever reason (e.g., inspection, storage, sub-assembly, WIP stacks, final assembly, packaging, shipping, and so on) place a pin on your layout.

When you've finished for that product, choose one or two more and repeat the process using different colored pins. Then, connect all the like-colored pins with string and calculate the actual distance the material travels for each product. This important exercise will give you an idea of how far material really travels and why it can take so long to get through to your factory. It can also be a real eye opener for senior management, so don't destroy the evidence. The results will usually be astounding.

Now that you know your system is a good candidate for our new paradigm, and have some rough notion of the magnitude of the challenge, it's time to act. But you're going to need some help. Help in the form of a cross-functional team and support from the top - and a "champion" to spearhead the process. Whoever it is, he or she should be a respected, team-oriented person who is comfortable working across departmental lines and who has direct access to the head of the company or division. As for the team, choose the best representatives from every area and make sure that they fully understand the principles of the new paradigm.

Finally, the team, along with your senior management and your champion, should agree on some "world-class" goals and a timetable for achieving them. What are world class goals? Well, for example, the new president of Eastman Kodak has set a goal to cut cycle times for all company processes by 90% in three years. And he comes from Motorola, where they've already done it. So he knows it's possible and he understands how important it is. That's a world class goal.

Go ahead. Hit the road. I promise you the trip won't be dull, and you'll see some interesting sights along the way. Just keep putting one foot in front of the other and before you know it you'll see your destination dead ahead--a company that can compete successfully with anyone, anywhere, anytime.

James K. Allred is president of ESKAY Corporation, Bountiful, Utah.

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