Where do we in manufacturing find the “edges” that make or break our profit margins? Where do we make the changes in process, the tweaking, that maximize returns on investments (ROI)?

More often than not the edges that reach both output and quality goals are found in the efficiencies we make in the manufacturing technique. Today, in many job shops, make-to-order, or mixed mode manufacturers, those efficiencies in production are found in the elimination of waste—a technique commonly referred to as lean.

In a lean system the manufacturer seeks maximized ROI by attempting to eliminate the waste of resources commonly found in physical production processes. In effect, the greatest and most fixed resource available to any manufacturer is that of time, and the control of time is something that we in manufacturing are always striving for.

In the performance assessment of any job or work center set-up, we first need to ask ourselves: Does the ROI justify the time, effort, and cost of leaning a particular process? For example, common sense will dictate that it’s not worth the expense of thousands of dollars to fix a process that will take a year or more to recover. Indeed, the ROI in manufacturing set-up improvement is directly related to the expected and/or actual use and output of the process.

To truly lean a process, the improvement must be both significant in terms of time and productive in terms of output—a positive ROI. However, as any lean expert will point out, most set-ups can easily be reduced to ten minutes or less.

What, then, are the factors we must consider when looking to lean a set-up? First, as mentioned, volume of output is a key concept in assessing a set-up redevelopment. How many of a particular component do I expect to make in a year? Related is the notion of customer requirements—how often might this process be set-up during this same period? In short, how often will I run the part and in what quantities? It is only in the review of the answers to these questions that we begin to understand the importance of a particular process to our bottom line.

With the awareness of value of a process in these terms, we can then begin to look at these cost in longitudinal terms; that is to say, our real costs for a particular set-up over time. It is true that most shops underestimate real hard set-up costs, leading managers to include “soft costs” (e.g., the value of improved customer satisfaction, etc.) to justify the meager ROI in leaning a process. To truly validate the cost of a set-up, managers should engage a value stream analysis in which every step of the set-up is listed and measured in terms of time spent.

Indeed, even the time (and cost) spent in breaking down the set-up on the backend must be included. This data is then compared against the average hours collected in the set-up performance information in the manufacturing database.

Of course, there are several more general steps you can take to help in ensure speedier set-ups—all common sense notions that are, surprisingly, overlooked by many manufacturers. In the world of lean we call it the “low hanging fruit”. For example, have a well organized fixture/tooling area. Always have a dedicated place for each fixture and make sure it is clearly identified. If at all possible, create multiple locations within the plant to store fixtures and store fixtures closest to where they are used.

Another great application is the use of shadow boards to place and store fixtures. Shadow boards provide a simple visual cue in the form of an outline or solid shape that quickly guide the set-up person to where a fixture should always go after breaking down. Some argue that this could be an expensive undertaking, creating dozens of shadow boards to store hundreds, sometimes thousands of fixtures. However, it certainly cannot be as expensive as having a $25 per hour person walking around for an hour looking for a $10 wrench ten times a week—week in and week out. Furthermore, while the set-up person is in search of the wrench the machine needing set-up is not producing parts.

Ultimately, the leaning of a set-up, a process, and even an entire work center involves the simple use of what is often the most basic of common sense observations. Plan and cost the set-up with realistic scenarios in mind. Remember, in leaning a set-up for a truly maximized ROI is to a large degree the controlling of that highly uncontrollable manufacturing resource—time.

This entry was posted on Wednesday, October 3rd, 2007 at 10:51 am and is filed under Shop Floor, Accounting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.