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Why Lean Fails in Job Shops... and What to Do to Succeed

by Greg Lane & Chet Marchwinski
June 3, 2015

Why Lean Fails in Job Shops... and What to Do to Succeed

by Greg Lane & Chet Marchwinski
June 3, 2015 | Comments (4)

Like many job shop owners, Greg Lane struggled with implementing lean principles. The problem was that the experiences and books that he, like other job-shop managers, had been exposed to were based on repetitive manufacturing. Job shops with their high-mix, low-volume product lineup present a challenge to lean thinkers -- but not an insurmountable one.

“People get turned off too quickly, for example, because they don’t see the direct application of a tool and they don’t go back to what is the principle” behind the tool, said Lane, who learned lean management from Toyota Production System experts at the automaker’s plants in Japan. “When I bought my own job shop and tried to apply lean through the school of hard knocks, I found that if I went back to the lean principles enough, I was able to successfully implement the concepts.”

For example, job shop management often struggles with the lean concept of takt time, sometimes called the “heartbeat” of a lean production system because it paces production to demand. Takt time is calculated by dividing available production time by customer demand.

“In a job shop, we generally can’t figure that out,” said Lane.  “I only know customer demand for the current order. So I’m not able to plug numbers into the equation.” But the concept of matching output to customer demand still applies.

“Time available becomes whatever time you need on the machine,” he explained. “And every time we quote a job to a customer and that customer gives us a purchase order, we have a market acceptable rate to plan and measure against, and that’s our takt time. That’s our relationship to the customer.”

Watch this video to hear Lane discuss other important points about implementing lean in a job shop, including:

  • What’s the same and what’s different about implementing lean principles in repetitive versus non-repetitive manufacturing
  • The main reasons why lean transformations fail in high-mix, low-volume shops
  • How lean management helps to accurately calculate margins, a challenge in high-mix, low-volume product lines.
  • How to know where to focus your time for problem solving and other leadership activities when there are hundreds or thousands of SKUs to manage



Learn more by joining Greg Lane for his “Improving Operations in High-Mix, Low-Volume Organizations”  or “Managing High-Mix/Low-Volume Organizations” workshops.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
Keywords:  fundamentals,  manufacturing
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4 Comments | Post a Comment
Isssp June 03, 2015
1 Person AGREES with this comment

I like the way you explained each and every thing. Thank you for sharing this great piece of knowledge. I have also seen some kind of stuff like this here https://isssp.org. You can also check this one.

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Phil Coy June 03, 2015

Good stuff.  I agree with Greg's comment about using MRP creatively when there thousands of SKUs.  Mapping runners, repeaters and strangers to MTS vs. MTO can be readily implemented in most ERP systems. 

I've found that a technology assist is essential to manage the huge amount of data, constant change, and high variation in high mix/low volume.  I agree that takt time isn't fixed by any means but in effect you can set the takt time based on the orders that you have and compare to your available capacity.   I'm helping one shop with configured orders where each unit can have labor swings of 80% from unit to unit.  Lean software calculates the takt time for a day and then sequences the work to as close to takt throughout the day as possible.  This requires that you have a very good handle on your standard work, standard cycle times, a strong lean data repository, and that you've built in the flexibility into your operations to adjust for the inevitable spikes and dips in demand.

Next generation technology is emerging that supports high mix/low volume lean operations without compromise to lean principles of flow, pull, and leveling.  It's not only about the tools by any means but if we don't have some good useful tools, making progress with high mix/low volume operations can be very frustrating.

 

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Jason January 10, 2019
1 Person AGREES with this comment

Great video and presentation.  As a long time manager in job shop environments, I can tell you that it is spot on what you said about looking at the lean concepts rather than the tools.  Understand waste, and strive to make your own tools to get rid of it.

Another key point is to schedule around your bottlenecks using a Theory of Constraints methodology.  A tool I have used in the past is a Mix Control Chart (http://www.jobshopleanmanufacturing.com/product-mix-control-chart.html) to adjust my schedule and level load around constraints.

Great job

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Greg Lane January 10, 2019
2 People AGREE with this reply

Jason,

Your "Mix Control Chart" in combination with real-time tracking at each work center is spot on. It's likely that both our experiences with these charts are the same, and likely this example is simplified for deomnstration, but in more complex environments where similar products are less likely to repeat, this chart can be more useful if completed in labor hours per task (instead of production units) and then compared to available labor hours for bottle neck processes. I also could not be more in agreement that this signifies the importance of cross training in job shops to create flexibility, and cross training matrix's are key to having a visual plan to track and accomplish this.

I enjoyed your input and your website.

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