What’s happening here? A manufacturer of industrial ovens and furnaces for laboratory test chambers, heat treating, annealing, and other industry processing consolidated the production of its industrial ovens into the plant in another state where it manufactures its furnaces. Most of the oven work force, while skilled, is new. The oven-production part of the aging consolidated facility is segmented, creating physical and communication barriers to flow of materials. Much needs to be reinvented, not duplicated, from the former and familiar. Amid the near chaos of the oven assembly relocation, there is a spike in oven orders. A backlog in orders grows to $3 million at an annual order rate of $24 million. Can the business bring sanity to the assembly startup and catch up on a rising backlog?
The Situation as observed on the shop floor:
There are 38 ovens, all unfinished, standing in the one congested aisle leading to two final assembly areas. The 38 represent either of two basic models of oven(450 degrees C or 1,100 degrees C), each with several insulated cabinet styles, 10s of electrical control options, two fuel options, and 100s of heater and blower combinations. These sub-assemblies are made in three segmented areas and brought to final assembly. It is in that aisle awaiting final assembly that oven cabinets – some as tall as 6 feet – wait until the proper control sub-assembly, the proper heater sub-assembly and the proper other parts (temperature gauges, door locks, seals, exhaust tubes, shelves, etc.) show up. The number of combinations of components is astronomical. A cabinet that has acquired all its parts is finally moved through the congested aisle to assembly. What is being final assembled, however, bears no similarity to the due date promised the customer or to the production volume necessary to meet the order rate. A second shift is added.
This is a skilled team that should be winning. Instead it is frightened, frustrated and losing. Each work order, reflecting customer specs and promised delivery, moves simultaneously to each of the three sub-assembly areas. But there each sub-assembly supervisor produces work in the manner most efficient for that department. The heater department organizes work in order to minimize the changeover of the type and size of heater wire, for example. The other two organize for their own efficiencies. Immediately the train has gone off the track. Only by miracle or accident will these three departments produce goods that will mate with the others at a time and place that will satisfy not only the customer but efficient production. It is like a quarterback calling a play and each member of the team running that play but making his own decision on what down he will run it. This is why there are 38 unfinished cabinets awaiting their parts – at the same time there are hundreds if not thousands of assembled parts sitting around on shelves awaiting their coordinating parts and cabinets. In fact, there are so many such parts that those not able to be located often have to be remade.
Create a system so that all sub-assembly departments will have the correct parts ready for the correct oven at the same time. Art Stout painted twelve rectangles in a line on the floor. Each rectangle is large enough to stage all of the sub-assemblies for one oven. The rectangles are prioritized sequentially. Art Stout instructed the workforce to focus on completing only the next oven order in priority. “Do whatever it takes to get that first priority ready for assembly before the assembly department is ready to assemble it. Do not worry about anything else.”
The 38 “in-process” ovens are completed within two weeks. The congestion disappears as the flow of material increases. Operators in the sub-assembly departments help each other to get the top priority oven “square” ready and, almost instinctively, they create new systems to accommodate the revised objective. The assembly supervisor now has time to focus on the assembly and testing of the ovens and is able to increase the number of ovens assembled each day. Customer deliveries become current within a six-month period. Lead time for the ovens is cut in half. The second shift shrinks to two self-directed specialists. Perhaps most important in the long-term, supervisors and employees have become both creative and highly motivated by their own success.