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.