Where Lean Works for Process Manufacturers

First of a series.

Patricia Panchak

s lean makes inroads into non- principles translate to solve process prob- manufacturing sectors of the econ- lems will help executives achieve a deeper A omy — into healthcare, govern- understanding of lean. ment, education, financial services, etc. — In this article, the first of a series, it's time to take a step back and complete Target explores the process manufacturing some overlooked work. Lean in process sector's adoption of lean and identifies lean manufacturing industries hasn't received principles and tools that provide the biggest the attention it deserves, leaving the benefit for process manufacturing. Future impression that lean isn't as applicable to articles in the series will feature the stories process manufacturing as it is to discrete. of process manufacturers who are among Too many executives running process man- the best at implementing lean and will ufacturing facilities still don't see how a highlight specific areas where lean works system designed by a maker of discrete best to streamline process manufacturing. parts can possibly work in their factories. But it does. It just works differently. Discrete manufacturers, too, should become more familiar with how lean works In Brief for process manufacturing. Plenty of good ideas about implementing lean in process Discrete manufacturers have tended to dominate lean discussions, manufacturing can be used in discrete. but that's about to change. Increasingly, process manufacturers at the Many facilities that make parts have areas forefront of adapting lean principles to meet their needs for continu- where processing activities take place, ous improvement are beginning to tell their stories. With this article, including painting, sealing or coating, and Target launches a series of articles describing where and how lean heat treating. Indeed, any operation where principles work in process manufacturing. Future articles in the series equipment paces the work and manages will feature the stories of process manufacturers who are among the multiple variables can benefit from a best at implementing lean and will highlight specific areas where lean process-manufacturing approach to lean. works best to streamline process manufacturing. Most important, understanding how lean

9 Fourth Issue 2008 www.ame.org Some Commonly Accepted Characteristics of the Three Approaches to Manufacturing

Manufacturing operations are commonly categorized into three groups: discrete, batch, and process — though often the batch and continuous operations are lumped together as process manufacturing. Many plants actually run two or even all three types of operations, but are generally categorized based on the primary operation. For exam- ple, making cereal is a continuous process, while packaging cereal is a high-speed discrete process, yet food man- ufacturing is traditionally considered a process industry. The secret to adapting lean to process manufacturing — that is, the batch and continuous flow operations — is to get beyond the labels and look at the work being done. A closer look often reveals work that can significant- ly be improved with the application of lean principles. No two facilities are alike, and there can be major differences in how lean principles are applied — even in facilities using the same manufacturing approach. For example, per- haps the most often discussed example of this within the discrete industries is the difference between how lean works in a high-volume, low-mix plant verses a low-volume, high-mix plant. The principles of lean work differently, but they work in both situations. As with implementing lean in a discrete operation, all of these concepts are inter- twined. In batch processing, achieving cycle-time reduction, one-piece flow of inbound raw material and outbound products, while maintaining just enough inventory and producing the right variety of products to meet customer demand, depends on an endless variety of considerations. In applying lean, there's just no getting around looking closely at the work and the lean principles, and thinking for yourself. The chart on page 12 provides a starting point for such an analysis, by listing some of the more commonly accepted characteristics of the different types of manufacturing. A "complete" list of characteristics or firmer defini- tions is not possible due to the incredible variety within each general manufacturing approach.

First, Some Ground Rules increased interest from process companies about five to six years ago. "They'd call and Translating lean for process industries say, 'We make things, but we don't make requires looking closely at and, in many parts, we don't assemble. Will lean work for cases, comparing the work characteristics us?'" Schwartz said. Other consultants and of discrete, batch (hybrid), and continuous practitioners tell a similar story. Jamie process manufacturing. However, specific Flinchbaugh, founding partner of Lean definitions or characterizations of the dif- Learning Center who worked at DTE ferent types of manufacturing remain elu- Energy during its initial lean transformation sive — there's just too much variety within nearly a decade ago, said the number of each approach to summarize in an article food manufacturers that his company or chart. The generalizations made in this works with has steadily increased since his article are not meant to be definitive, but firm launched in 2001. Bob Iversen, manag- rather to serve as a guide and an example ing partner, The George Group, figured the showing how executives might look at the time frame at around six or seven years work they do differently, so they can apply ago. Exploring the reasons for this delay lean principles. See the box above, “Some provides clues to why and how lean needs Commonly Accepted Characteristics of the to be translated to meet process manufac- Three Approaches to Manufacturing” and turers' needs. the chart on page 12. Perhaps the main reason lean took longer to gain widespread acceptance What Took So Long? among process manufacturers is the same Aside from a few exceptions, most reason any company or group of compa- process-industry lean journeys began with- nies give for not implementing lean: in the past decade, nearly a decade after "Because we're different." Part of this is discrete companies. Bill Schwartz, execu- human nature: When presented with tive vice president of TBM Consulting change — a new approach to work, a new Group, said his firm started seeing organizational structure — it is common to

10 Target Volume 24, Number 4 recoil and reject the new idea. Because also can be difficult for process manufac- lean originated at an automobile company, turers to understand. While in a discrete other similar OEMs and tier one suppliers process, the work is done in full view of simply found it easier to adapt. People in operators and managers, in process, much discrete manufacturing could relate to it, of the work is completed inside a series of people in process could not. pipes and tanks, essentially invisible. "A lot For some process manufacturers, the of this work is harder to see, so we need slow uptake could be the result of a more vis- better skill, more tools or better observa- ceral reaction: "Often these executives do not tion," Flinchbaugh said. In most continuous think of themselves as manufacturing com- and batch processing plants, technology — panies," Schwartz said, noting that process especially instrumentation — not lean, has company leaders identify more with the ver- been the method by which they've made tical industry than with manufacturing in production more "visible" to the operators. general. "They almost bristle at the sugges- tion; they just think that process is different." Other Improvement Tools Indeed, process manufacturing is different from discrete — in many cases so different These and other differences likely that it's easy to see why many executives at drove process companies to pursue other process manufacturing companies initially improvement efforts, such as new equip- don't think lean applies to them. ment, six sigma, and technology, before pur- In the most extreme, discrete and suing lean. For example: "A lot of process process manufacturing can be diametric manufacturing is capital intensive by nature, opposites. With discrete you are putting so a lot of process improvement was things together, but with process you're focused on capital, not on how I design, pulling things apart. Examples include oil manage, and improve the work," refining, paper-making, and some food Flinchbaugh said. They could make signifi- processing, such as with chicken and beef. cant improvements by buying a higher Oil refineries pull apart molecules in crude capacity furnace or bagger and double out- oil to produce gasoline, kerosene, diesel, put, so they did. and other products. Paper mills produce Likewise, process manufacturing tends huge rolls of paper which are cut into to require the simultaneous management of smaller units for sale. Chicken and beef dis- many variables during production, so six assemble, well, you get the idea. "You have sigma promised bigger benefits compared to assembly lines for discrete and disassembly lean. For example, Eastman Kodak's pho- for process," said Peter G. Martin, vice pres- tography paper-making process has paper ident, Invensys. Similarly, discrete builds running through equipment at 1200 feet- products from parts, while process creates per-minute while being coated with eight or products through material transformation. nine chemicals, at a particular temperature Also, in many continuous process and for a specific length of time. "They'd industries the concept of customer demand have this huge six-foot roll of paper, and — let alone the lean concept of demand would have to go back, test the paper, and leveling — is a foreign concept. These cut around the bad stuff," Schwartz said. industries, such as oil refining and mining, "They'd get good quality, but a big loss." Six operate in markets where there's a market sigma was the best way to improve yield. -clearing price. "Reasonably, you can sell Interestingly, just as many process whatever you can make," noted Iversen. companies who've spent time implement- "The price may go down, but you can sell ing six sigma are now implementing lean, it." In such situations, the single constraint many discrete manufacturers who've is throughput velocity, and what matters is implemented lean are increasingly inte- optimizing the product from an economic grating six sigma. standpoint. Another common hurdle that deters Lean's focus on making work visual manufacturers from pursuing lean is that

11 Fourth Issue 2008 www.ame.org Discrete Batch Process (often called “Hybrid”)* Continuous Process Production or assembly of parts Production of batches of product Continuous production of product usually with measurable dimensions measurable by weight and volume

Focus on one-piece flow Focus on appropriate batch size Focus on speed, throughput

Production staged through work cells Production determined by time/end Production runs may last years; output may vary point of batch processes depending on raw material and run conditions

Parts are assembled on assembly Product is made through material trans- Product is made through material trans- lines or in work cells formation, most often by combining fluid formation, by either combining or separating and dry raw materials and the application liquids or gases (or fluid-like substances, such of heat or pressure and time as powders) and applying heat, pressure, and time May involve chemical/biological reactions

Work is visible Work is invisible in the batch stage, Work is invisible to employees. Sensors and but visible in the packaging stage and other instrumentation make work “visible”

Tends to be more labor intensive Tends to be more capital intensive Tends to be highly capital intensive Can be manual or automated Highly automated Very highly automated

Uses relatively smaller, moveable Uses large, interconnected and co-located Uses large, interconnected and co-located equipment equipment for both batch process and equipment packaging

Examples include: Examples include: Examples include: automobile brewery refining aerospace pharmaceuticals power generation (output not measurable by weight and volume) medical devices food paper

* Many factories and even industries that produce batch quantities of product sometimes are referred to as “hybrid” operations because they employ significant amounts of both batch and discrete operations in the same facility; they make batches of product, then package it on high-speed lines.

many executives still mistake lean tools for moves, but it's all in a pipe; there's no man- lean. They think if they use lean tools, aging it. You have no intervention as you they're lean — or at least "doing lean." As process coal into heat, water into steam, many discrete manufacturers have found, and send steam through a generator to that's not true. For discrete manufacturers, generate volts or amps. The same goes this mistake limits lean's power; for with turning cream into butter." Indeed, process, it makes lean appear irrelevant. Martin said, "If you think of lean's empha- Some of the most prominent lean tools sis, the object is to get discrete manufactur- focus on material flow — a problem that ing working more like continuous process process manufacturers don't have because manufacturing." Viewed from this perspec- it is automated within the process. tive, lean doesn't appear to offer much ben- Therefore, such tools as kanban, kitting, efit to process manufacturers. water-spiders and milk runs don't translate Also, with such intense focus on capital well to process manufacturing. as having the biggest impact on production Similarly, the idea of one-piece flow is improvements, lean's focus on employee difficult to translate to continuous process engagement as a source of improvement operations because there are no "pieces" to seems less important. Though some discrete flow. The raw material is most often a liq- manufacturers have made great strides in uid, such as crude oil in the refinery creating cells where one line worker oper- process, or a solid that behaves in a fluid ates more than one piece of assembly equip- manner, such as the sand and other mate- ment, process companies routinely have rials that go into plate-glass production. very few operators running huge lines. For Flinchbaugh explained: "Material example McCain Foods Limited, maker of

12 Target Volume 24, Number 4 frozen foods, makes 15 tons of French fries ered process industries because they pro- per hour on one line with five operators. duce big batches and their highly automated Likewise, cellular manufacturing is another filling lines (the disassembly of the batch prominent lean approach that does not into saleable units) are so fast they operate translate well to process operations. Most more as a process. These and many other equipment in process operations is already industries traditionally known as process co-located and tightly linked — it's cellular industries aren't "pure" continuous process by design. manufacturers like, say, oil refineries. For example, paper manufacturers Translating Lean continuously make huge rolls of paper which are cut to make smaller rolls while As advanced lean practitioners will tell the equipment continues to run. Once a roll you, however, lean isn't about applying a is cut off, it is moved to another location for generic tool to a standard practice; it's further processing, perhaps to add a coat- about understanding specific work within ing, to cut into smaller rolls, etc. — there's the context of the value chain and adapting material handling and WIP, but there is no lean tools to improve work flow, eliminate assembly. Consumer packaging companies waste, and make the work visual and self- run huge printing presses, producing mon- diagnostic. It's about creating a culture of strous rolls of product. But they aren't continuous improvement where work is assembling; they're moving skids of card- designed to reveal problems that employ- board — WIP — around. Both are tradition- ees are trained and empowered to solve. To ally considered process industries, but a understand how lean applies to process closer look at the specific work reveals manufacturing, executives must look where lean could streamline operations. beyond the differences that traditionally To help translate lean to process man- define process and discrete manufacturing. ufacturing, Iversen recommended viewing They must also realize that lean is about manufacturing operations not as a discrete more than just the tools and understand the versus process dichotomy, but rather as a lean principles upon which lean tools are continuum from "pure" continuous process based. Process manufacturers who have manufacturing to "pure" discrete. While been successful implementing lean don't more a mental exercise, doing this will dwell on situations where lean concepts force executives to look more closely at the don't apply; they get to work identifying work, and help reveal where lean may where lean concepts work. apply. For example, if placed on a continu- Each industry — some would say each um rating industries from "pure" continu- company — has particular characteristics ous process on the left to discrete on the that influence how work gets done and the right, oil refinery, electricity generation and relative importance of particular lean tools. mining operations would be placed to the Looking closely at the work reveals the far left, as the more "pure" continuous areas where discrete and process manufac- process industries. By comparison, paper turing are similar and, therefore, where lean mills, pharmaceuticals, food and beverage will be effective in process manufacturing. manufacturers would fall in the middle, as Some industries traditionally classified as batch operations, with some process char- process manufacturers contain significant acteristics and some discrete characteris- discrete characteristics — just as many dis- tics. Automobile, aerospace and other dis- crete manufacturers run process-like areas crete manufacturers would be placed fur- within their factories. The food, beverage, thest to the right. and pharmaceutical industries, for example, Viewed this way, it's easier to see that produce large batches of product at the many process manufacturing companies, beginning of the line, then boxes or bottles especially those with batch operations, can — discrete units — for shipping at the end. benefit from lean practices. Ultimately, These companies are traditionally consid- "You've got to understand what processes

13 Fourth Issue 2008 www.ame.org and which problems matter, and where you example: This vibration isn't normal, so the have opportunities to improve," Flinchbaugh bearings might be a problem." Schwartz said. "The operating system principles come said. "It's phenomenal to see how the oper- first; then you pull out the tools." ator takes ownership of the machine: It connects the operator with the machine in Where Lean Works a wonderful way." Average OEE improve- ment from a TPM blitz is five to ten percent. Some lean tools and concepts are eas- Iversen recommended that process ier than others to adapt or translate to manufacturers go beyond TPM and consider process operations. Keeping in mind the implementing more sophisticated mainte- dangers of oversimplification and the need nance techniques such as Reliability to understand work in the context of the Centered Maintenance (RCM). Martin said value chain, what follows is a list of tools that industry giants such as Exxon, BP, Dow, that are most likely to benefit batch and and DuPont and others pioneered and set continuous process manufacturers. the pace in RCM, preventive maintenance Total Productive Maintenance and predictive maintenance, though they did The lean concept that most easily not call it “lean;” they did so because equip- translates to the process industries, with ment uptime is so critical to their continuous their dependence on huge, continuously- process operations. running equipment, is Total Productive Maintenance (TPM). Relatively speaking, 5S/6S process manufacturing is more dependent Another lean concept that directly on automation than discrete manufactur- translates to process manufacturing is 5S ing. The equipment in process tends to be (some companies call it 6S). While lean prac- much bigger and more expensive than that titioners agree the tool works nearly every- used in discrete manufacturing, and keep- where, process manufacturers have found ing the equipment running and making particular benefit by implementing 5S in good product is that much more critical. offline maintenance. Iversen said: "In the Schwartz said that TPM was among manufacturing work that I've done, we've the first aspects of lean that TBM offered increased the number of work orders — the for process manufacturing clients, con- number of routine maintenance completed ducting what's become known as a TPM — per hour by 50 percent to 60 percent by blitz. With a TPM blitz, a cross-functional using lean techniques to frame the problem, team reviews all the equipment manuals, understand the value driver, pick the right observes the equipment as it works, and tool, and use it." talks to the operators. They "blue tag" Particular attention should be paid to everything wrong with the equipment: dirt, reviewing — and challenging — mainte- sensors, guards, oil leaking, product leak- nance standards, according to Keith Sinclair ing, and the like. The team also watches of Sinclair Associates, Inc. Work his compa- the equipment for a day, noting every time ny has done found the real time to perform it slows down or stops, which helps identi- routine maintenance work is a fraction of the fy the most critical bottlenecks. Then main- benchmark metric. He noted that in one tenance fixes all the problems with the example they found that truck maintenance equipment, cleans it from top to bottom that historically was expected to take eight and starts an autonomous maintenance hours, upon examination took only four program, including a flight check of the hours. "We had four hours of looking for maintenance tasks an operator should do tools, waiting for parts, and material, etc.," everyday, such as checking oil level, tem- he said. perature, safety guards, and sensors. "We have built waste into the struc- "At the end of the week, we'll have ture and we don't challenge ourselves to restored the machine to like-new and have say 'Why not six hours,' because we're taught the operator to hear and see, for happy that we met the expected time,"

14 Target Volume 24, Number 4 Sinclair added. "But the essence of contin- turing are very highly reliable in this regard. uous improvement is that we challenge the Batch process operations are similar standards." to continuous processing in that they do not produce WIP inventory in the process Theory of Constraints that makes the batch, but are similar to dis- While theory of constraints is used in crete operations in that a batch can be discrete manufacturing, it's more impor- viewed as a part — as a consumer product to tant to process manufacturers, "because be packaged into smaller units for sale, as an the big value lever in process is throughput intermediate to be added to another process velocity," Iversen said. Process manufactur- at the plant to make a final product, or as an ing facilities tend to have more, and more intermediate to be sold to another company tightly, interconnected equipment and for incorporation into its product. Because processes than their discrete counterparts, process companies do not generally refer to making the optimization of the links intermediates as WIP inventory, many exec- between equipment more critical. Products utives running batch process operations at discrete plants are more often produced don't believe they need to use the lean tools at assembly equipment and workstations, that reduce inventory — and many batch where a problem at a particular piece of manufacturers have other approaches to equipment remains contained to a small keeping intermediate product production to part of production. Products in process a minimum. However, significant reductions facilities often progress through the same in the amount of product waiting in holding processing line, so anything that affects tanks for further processing can be achieved step one affects step two and can affect the by applying lean principles. entire factory. "You have to find the limiting Also, because batch manufacturers run resources and set up systems to maximize multiple products through the same equip- them, to make sure the throughput isn't ment, they tend to produce more excess fin- constrained by that process," said Sinclair. ished goods (FG) inventory and have slower This means process manufacturers may FG inventory turns. This results because the have to run equipment on either side of time to cycle through all the different prod- slower equipment at less than rated capac- ucts can be long and inventories must supply ity to maintain continuous flow and to demand during the cycle. Plants that produce avoid excess WIP inventory. Lean tools, a wide variety of products are particularly such as value-stream mapping, can help vulnerable to this problem. For batch- identify these bottlenecks. process manufacturers then, inventory and leadtime reduction are achieved by produc- Inventory and Leadtime Reduction ing smaller run sizes more often, which in Inventory and leadtime reduction is turn can be achieved by reducing change- where adapting lean to process industries over times (as well as by increasing up-time gets interesting because it is where contin- of equipment). Lean techniques are perfectly uous, batch, and discrete manufacturing suited to help batch-process manufacturers require significantly different approaches to achieve these goals. lean. Continuous process companies don't produce inventory because raw materials Quick Changeover are continuously transformed into product within the equipment and sold at the mar- Likewise, the concept of changeover is ket-clearing price. "In some operations, on different for process and discrete manufac- the discrete side of the world, we talk about turers — and different for the two types of inventory reduction, but look what's under- process manufacturers. By definition, contin- neath that, it's that and that the processes uous process manufacturers do not conduct are highly reliable and the ability to meet product changeovers. Continuous process takt time is reliable," said Sinclair. facilities, such as those in refining, power Continuous- and batch-process manufac- generation, and paper mills often run for

15 Fourth Issue 2008 www.ame.org years without stopping. If they change their mon lean goal. For batch operations, faster output, they do so by adjusting the settings changeovers are key to controlling inventory. on the equipment. For example, an oil refin- Also, in discrete manufacturing, ery might change the temperature to pro- changeover tends to be repeatable, because duce more methane and less diesel, or a it's more frequent. In process, because rolled steel plant would squeeze the roller changeovers are less frequent, they tend to down or open it up while the equipment con- be less repeatable — indeed, it's possible that tinues to run to produce a different thickness no two changeovers will look alike. "Some of of rolled steel. the routines in process may never happen Also, unlike discrete parts manufactur- again," Flinchbaugh said, noting that stan- ers who make cars or refrigerators, the goal dardization should therefore focus on pre- for continuous process manufacturers is to observing the changeover. "Get material in make as much product as you can for as long place, resources in place, and the plan in as you can. Eventually, however, after a cer- place — everything lined up like a pit crew." tain number of years, the continuous process For example, E.A. Sween makes a mil- manufacturers must shut down the entire lion sandwiches a week and every evening plant for maintenance and, often, to upgrade must completely sanitize the entire line. A the equipment. When it is shut down, it is recent kaizen event reduced this changeover generally down for a long time, which is very time from eight hours to four hours, as well expensive. Indeed, the profitability of the as reduced the number of people needed to plant can depend on how well the multi- complete the task, cutting costs dramatically. week downtime is handled. According to Similarly a brewery or other beverage maker consultants at A.T. Kearney, a day of lost that makes multiple products in sequence on generation might cost a utility as much as a a particular line must clean the tanks, quarter of a million dollars. change bottle lines, etc. Doing that faster "In the case of an electric utility, you run helps them to make more of each product, a power plant 24/7 until you take it down for and lean concepts can help. the multi-week downtime, which could last as long as ten weeks. If the company can Cycle Time Reduction take that down to eight weeks, that's two weeks they don't have to buy power on the Cycle time reduction also takes on a dif- open market," explained Flinchbaugh. ferent meaning in batch process manufac- (Power plants are legally obligated to provide turing compared to discrete. When making power to their customers). "If they take parts, the emphasis is on maintaining takt longer or don't plan well, they'll have to buy time, something that is largely taken care of on the spot market." Using lean principles, by the equipment in process manufacturing. continuous process manufacturers can Still, process manufacturers should be on the streamline and reduce the length of such lookout for steps in the production process planned downtime. that take place outside of the equipment. For For batch process manufacturers, example, Sinclair described a precious met- changeover is more frequent than continu- als recovery operation. The company takes ous process but less often than most discrete in the customer's metal in a variety of forms manufacturers. While at first glance it there- (scrap, powders, blocks, etc ), they assay it to fore might seem that changeover would determine the amount and type of precious matter more to discrete parts makers — metals (such as gold, silver, platinum, and especially those with low-volume, high-mix palladium) that can be recovered, and pay production — changeover can be just as cru- the customer accordingly. The number, tim- cial to the overall business performance of a ing, and processing complexity of each batch batch process operation. For the discrete receipt is "undefined and unpredictable." operations, frequent quick changes of equip- Once these initial steps are completed, the ment to make a different product can be vital material enters the process of smelting, to achieve a work-to-order system, a com- leaching, and extracting the precious metals,

16 Target Volume 24, Number 4 which are sold to the metals market. To by the freighter full, not a milk run," assay the incoming metal, technicians must Flinchbaugh said. "The material ordering follow discrete steps. They log, prepare, system, getting raw materials in the door — process, and sample the material, then pre- those transactions are more important in dict how much value there is in it. "It's a four- any business, but they're probably more hour touch time with a four-day flow time, important in process industries." Smaller and that's at the front end of a processing operations, such as some biopharmaceuti- plant," Sinclair said. "There is a lot of touch cal operations, may handle small quantities and wait time, there's queuing up between of material, or material that requires spe- the steps — that's textbook lean flow." cial handling (storage within a particular However, because these discrete steps are temperature range) or that must be used by part of a process operation, they often can be a specific date. Either way, the more effi- overlooked. cient material handling gained by applying Cycle time as it is defined in discrete lean principles is beneficial. manufacturing (the length of time from the start of production to the final assembly and Quality testing for a particular product or customer Even the concept of quality is different order) translates to batch processing as the for discrete and process manufacturers. "In time it takes to make a batch of product. In parts manufacturing, you typically cannot addition, many batch process manufactur- measure a quality variable until after the ers, such as Dow, have successfully used component is made, such as the diameter lean concepts to reduce the time it takes a or roundness of a hole," Martin explained. processing line to cycle through making one "In process you measure your quality vari- batch each of all the products made on that ables in process." This difference affects line. Dow calls the concept "Every Product the types of quality measurements you Every Interval" (EPEI), while others refer to it implement, the way you respond to a mis- as "Shrinking the Product Wheel." By shrink- take, and the way you apply lean. For dis- ing the product wheel, the batch processor crete, you'll probably take random samples becomes more flexible and produces less of product, measure how you're doing to a inventory (to meet demand while the line specific metric, then use statistical tech- produces other batches of other products). niques to figure out the root cause of the In some cases, shrinking the wheel can problem. In continuous process manufac- eliminate the need to install a parallel line to turing, if you take a sample of gasoline and meet an increase in demand. the octane level is 97, the entire batch is 97. "If you're supposed to make 88 octane One-Piece Flow gasoline and you're making 87, you just As mentioned above, one-piece flow add octane," Martin said. is incorporated into the equipment in "Quality in discrete is a reduction in process manufacturing, so executives often defects," he explained further. "In process, fail to see how a lean initiative to achieve quality is a limit." For example, if you want one-piece flow is necessary. But process to sell gas as 87 octane but you mix up and manufacturers can gain significant deliver 88 octane, the driver is not going to improvement streamlining inbound materi- give you any additional credit for that al and outbound products by focusing on improvement in quality. "So quality in material handling outside the four walls of process isn't a matter of having higher the plant. quality, it's to control the quality variable to Though getting material into the fac- where they want it, without going over." tory is similar for both process and discrete In process operations, quality often is manufacturers, the amount of material referred to as the "grade" of a product and, being handled by process manufacturers consequently, determines the price the can be vastly different. "A utility buys coal manufacturer can charge for it. This is

17 Fourth Issue 2008 www.ame.org hardly ever the case for discrete manufac- cleared through multiple layers of manage- turers. However, bearing manufacturers ment to avoid costly mistakes. Other who can determine the tolerance within process manufacturers may be required to which a bearing is made have been known clear any changes with regulators. The stan- to sell higher-grade bearings to customers dard lean approach to employee engage- who require them — presumably at a high- ment, which encourages frequent and er profit. The processing of agricultural sometimes autonomous employee-driven products, carpet, and paper are other changes to standard work, may not apply. examples where the manufacturer can Still, in such situations, striving to have choose which level of quality to produce every employee see and solve problems can based on demand. Of course, the highest be applicable. For example, an employee quality will sell for the highest price, and monitoring a continuous process could be the highest possible yield of the highest trained to notice, quickly diagnose, and fix quality, therefore, often is the goal. certain problems with faulty sensors by fol- lowing a specified standard procedure. Standard Work (Again, most of the largest global process manufacturers practice such an approach, For a discrete manufacturer, standard but may not call it lean.) Also, process man- work refers primarily to detailed work ufacturing executives can create a lean cul- instructions for line workers to assemble ture for work done outside the equipment components, sub-assemblies, or end prod- and where work is not regulated. ucts. Process manufacturers usually employ Key to creating a lean culture is design- equipment operators whose job largely is to ing work processes that are self-diagnostic monitor the equipment. In continuous oper- and where employee engagement in contin- ations, the operator can be expected to do uous improvement is high. "It's all about essentially the same job day after day. In designing processes to reveal problems," is batch processing, the operator's role may a popular refrain of advanced lean practi- vary hour by hour, day to day, depending on tioners. In such an environment, Sinclair which product is being made or whether a said, "standard work — work systems, con- changeover is being done. "In a lot of process tent sequence and output, work procedures, industries you won't have a single person and work design — will have been built on performing closely-defined repetitive work," an underlying hypothesis, such as: 'If I per- Flinchbaugh explained. "They'll have a tech- form this task in this sequence, I will build it nician with a range of skills. You don't know in this time. The learning cycle takes place what a day will look like." Still the standard as part of the work — every time I am unable work concept applies to both continuous and to perform the task in sequence is a signal batch processing operations. "Their job isn't that there is a problem. Fixing the problem is standard, but they have routines and activi- a learning and continuous improvement ties within their job that are, such as how to opportunity.'" respond to an alarm." Flinchbaugh said. "I Further, Sinclair said: "All systems are don't standardize the job; I standardize the basically comprised of a collection of work activity within the job." tasks. They connect. You start to talk about if I have a task and another person has a task Culture Change that's depending on mine. Then that natural- At the more sophisticated level, creat- ly leads into, 'Let's examine the workplace ing a lean culture is a strategy that can ben- and see whether it is designed to inhibit or efit any business, but even here some interrupt that work.' We've had incredible process manufacturers may need to make success with that concept by itself." some adjustments to the standard lean As for the idea of getting the worker approach. Since many processes run within involved in daily improvement, most people the equipment, they tend to be very stable. would agree with Schwartz: "That's the Changes to the processes often must be same in any plant, even a service company." 18 Target Volume 24, Number 4 Why Now? up my absorption credit?'" Schwartz said. Increasingly, however, they're recognizing The push by increasing numbers of the additional inventory as expensive waste process manufacturers to implement lean and find they have to find a way to accom- is being driven by several forces. For some modate the additional changeovers. "It's process manufacturers that have continu- changing their philosophy." Schwartz said. ous improvement mindsets — those "A [batch] process plant is typically not who've aggressively deployed automation, designed or engineered to be flexible and total quality management, six sigma, and that's part of being lean, to make the lines other initiatives — lean is the next logical more flexible." step. As the realization that lean is trans- Executives also are facilitating the ferable to non-manufacturing industries translation of lean to process industries. As and to non-production functions, more executives running discrete facilities move to process manufacturers who initially may run process industries and consultants have been skeptical are ready to take expand their client base outside of discrete another look. If lean can be translated so it manufacturing they're transferring — and works in government and health care as translating — lean concepts. The translation well as in accounting and human requires sometimes subtle, sometimes sub- resources, it can work in process manufac- stantially different interpretations of such turing. basic lean terms as one-piece flow, quality, Meanwhile, the market is forcing inventory reduction, changeover, and others. process manufacturers to become more It's only when you are willing to look closely flexible in order to satisfy customer demand at the work through the lens of lean princi- for a wider variety of products. Toothpaste ples that you'll be able to unlock the poten- manufacturers don't produce a few brands tial of lean for a process operation. What of toothpaste, but rather a bewildering array most processing companies who've imple- of gels and pastes, each in a variety of fla- mented lean have found is: "The concepts vors and targeted to specific dental health apply, but the way you apply them is very dif- needs, such as whitening, tartar control, and ferent," Martin said. As more process manu- cavity protection. Also, big-box retailers, facturers implement lean and begin telling such as Wal-Mart, often require special their stories, more ways to implement lean packaging. Even rolled steel manufacturers concepts to meet the needs of process man- who once enjoyed the luxury of scheduling ufacturers will become more apparent — customer orders in a sequence best for the and will open new doors of lean opportunity manufacturer, are now forced to alter the for all manufacturers. manufacturing schedule to better meet cus- tomers' more stringent delivery requests. Producing this variety and meeting cus- tomers' shorter leadtime requirements chal- Patricia Panchak is editor-at-large of Target and lenges the process manufacturers' tradition- the former editor-in-chief of IndustryWeek. al focus on long runs and big batches, and lean can help them make the transition. Initially, batch process manufacturers might react to a demand for a greater vari- ety of products by increasing inventory of © 2008 AME® For information on reprints, contact: AME Association for Manufacturing Excellence the product. "They figure: 'I have the thing www.ame.org running corn flakes, why would I want to change over to [something else] and mess

19 Fourth Issue 2008 www.ame.org