I would be willing to bet if I asked you to head into the shop on a Saturday afternoon and build me one or two of the things your factory produces whether it be cabinets, furniture, or custom millwork, what you make doesn’t really matter. And probably just the thought of going in with no one around and executing your craft not only doesn’t pose a challenge but may even sound enjoyable.
Building that cabinet or piece of furniture is presumed to be the hard part, after all you probably have to be a skilled craftsmen or machine operator. Yet you find that part of the job easy. So if building the high-quality product is the easy part, why is it so darn hard to make money?
As craftsmen and women, we spent most of our career honing our skills on that thing we build. But unbeknownst to us, it’s actually harder to coordinate the building of products than it is to actually build the product.
As a company scales, the moving parts multiply so rapidly it’s hard to keep up.
I believe there are three P’s between you and higher profit margin’s. And I wouldn’t be writing this if there wasn’t a lean tool to help with each.
The first one is products. And not the products you build, I’m talking about all of the inputs required. Sheet goods, hardware, tools, specialty items, pens, pencils everything right down to toilet paper [which by the way is critical to the operation of any factory] when you start really digging in to all of the inputs and coordination, it’s staggering how many items there are, and mind blowing we even manage to coordinate it as well as we do.
The next one is people, and I’m not talking getting and keeping talented people. I’m more referring to once they’re in your factory how long does it take to train them and how can we be sure that a new person is putting out the same quality as our ten year veterans? Don’t quote me but I think the statistic says a new employee cost a minimum of $3000 before they’re useful, and my gut tells me that that’s on the low end.
The third P is Pull. Creating pull is probably the most difficult thing for us as people to fully understand. I will hit on some highlights here, but this is a subject you will need to further research and practice in order to figure out.
Circling back to the first P which is products (or inputs). Getting these wrong can bring your entire factory to a screeching halt, or worse yet cause production somewhere where you don’t need it, (which is actually over production, the worst of the 8 wastes)
So making this function as easy and accurate as possible is crucial.
Enter KANBAN. This is one of those systems on the surface it seems too simple to be effective. And it probably won’t fully set in how amazing it is until you start doing it. Imagine how much brain power you can save when 80% of all the things you need just magically show up and you never run out. Thus allowing all of your energy to focus on the last 20%. If this is your first time seeing the word KANBAN I highly recommend a Google search, Youtube or give me a call. This is one of my most favourite subjects, I will talk your ear off.
Now let’s tackle how to get new people up to speed in record time. I will quote Ritsuo shingo, “there is no such thing as a problem, only deviation from standard”
You guessed it we need to create standard work, even where you think it’s not possible, some level of standardization is always possible. It will blow your mind what some instructions with pictures posted on the wall can accomplish. Henry Ford was quoted “ standardization is the basis of all improvements“.
One big pitfall of creating standards is typing out instructions. No one’s going to read them. Instead use lots of pictures, videos and as few words as possible.
Last but not least creating Pull. This is no small topic either. Most businesses operate in a super push fashion and basically shove things into the plant until something comes out the other end. A basic pull strategy on the factory floor would be to determine what amount of overproduction you’re willing to put up with, more or less in the form of buffers between disconnected work centers. Rather than shove things into step 1 as fast as you can, you let the last step of the process pull work from the previous step, all the way up the line until there is an empty spot at step 1. Only then do you introduce more work. This same concept can be applied to office work and engineering. It usually takes some serious thinking to make this happen, but nothing worth having comes easy!
It all starts with taking some basic measurements of what’s going on in the factory. Start counting! Whether it’s pieces, cabinets, doors, what ever… don’t be too accurate and get lost in the weeds. Once you start measuring, you will quickly see what else you need to track, let it evolve. Once you know what’s actually happening, you can compare to your takt time (rate of customer demand), then balance the flow and create pull. Geez, sorry, I made that sound complicated. Just go for it, you will figure it out if you put your mind to it.
*Side note* Creating pull is also critical to develop as a people skill as well. I still struggle with this one when it comes to improvements. I find I’m still pushing improvements on people and they reluctantly say OK, right until I walk away, then right back to the old way. Creating pull in this scenario would look something like this. Asking a person what waste(s) they see in the process, and lead them with questions to the solution you had in mind, or perhaps they will come up with something better! Only when they own the idea will it stick. Thats pull !