"Lean" translates to action at System Sensor, St. Charles, IL. It means determining what the cus- tomer will pay for and then identi- fying better ways to create that value. Encouraged to take initiative as they strive for perfection, associ- ates hear the message that learning and adjusting quickly will boost performance in the company's highly competitive markets. System Sensor is the world's largest manu- facturer of industrial smoke detec- tors. (See the box, "About System Sensor.") Lean Tools, Continuous Improvement: Shared Responsibility "Lean manufacturing descrip- tions range from Total Quality Management (TQM) to JIT and world-class manufacturing," said Karl Odegaard, director of manu- facturing. He noted that lean com- prises kaizen, visual controls, sin- gle-piece flow, multi-skilled work- ers, mixed modeling, and other ele- ments. "They all mean the transfor- mation of the value delivery process," said Odegaard. "We're focusing on empowerment and decisions at the lowest level, to help us eliminate defects and waste. "The 'five whys' — asking why Update on Excellence System Sensor’s Lean Journey T‹ˆ “„– –˜•†ˆ™™ˆ™, Œ“–˜•œˆ š‹ˆ“, „”‡ š‹ˆ” ‘ˆˆ– š‹ˆ Š„Œ”™ ˜•’’Œ”Š. Lea A.P. Tonkin About System Sensor The world's largest producer of industrial smoke detectors, System Sensor is based in St. Charles, IL. Business is seasonal, with lots of school and new building construction orders. The company has 30 OEM customers and thousands of other customers. Founded in 1984 as a division of BRK Electronics, it became a division of Pittway Corporation in 1991. Honeywell purchased the company in 2000.Its markets include commercial fire, security, audio/visual, HVAC, and water flow. In addition to the St. Charles facilities, System Sensor has operations in Australia, Mexico, Canada, U.K., Italy, India, Singapore, Russia, China, and Hong Kong. 44 Target Volume 18, Number 2
Transcript
five times when eliminating waste— is one of our strongest leantools," he added. Transportation,waiting, and other wastes aretopped by inventory waste, hebelieves. "I'm measured on inven-tory turns, not on production,"Odegaard said.
"This lean effort exposes prob-lems, forcing their solution. It sus-tains company-wide continuousimprovement (CI), encouragesemployee involvement, and helpsus to meet or exceed customerexpectations," Odegaard contin-ued. "Meanwhile, we are workingtoward self-management ratherthan self-direction. That meansassociates willing to acceptresponsibility, and managers will-
"Lean" translates to action atSystem Sensor, St. Charles, IL. Itmeans determining what the cus-tomer will pay for and then identi-fying better ways to create thatvalue. Encouraged to take initiativeas they strive for perfection, associ-ates hear the message that learningand adjusting quickly will boostperformance in the company'shighly competitive markets. SystemSensor is the world's largest manu-facturer of industrial smoke detec-tors. (See the box, "About SystemSensor.")
"Lean manufacturing descrip-tions range from Total QualityManagement (TQM) to JIT andworld-class manufacturing," saidKarl Odegaard, director of manu-facturing. He noted that lean com-prises kaizen, visual controls, sin-gle-piece flow, multi-skilled work-ers, mixed modeling, and other ele-ments. "They all mean the transfor-mation of the value deliveryprocess," said Odegaard. "We'refocusing on empowerment anddecisions at the lowest level, tohelp us eliminate defects andwaste.
"The 'five whys' — asking why
ing to give up part of their respon-sibility in their roles as supportfunctions."
Customer Responsiveness,Bottom Line Improvements
Day-by-day concentration onperformance goals and more effec-tive use of lean tools makes a sub-stantial difference at SystemSensor. During the past four years,average cycle times decreasedfrom three weeks to three days,customer reaction time (the time ittakes the factory to build and startshipping unforecasted customerorders) dropped from three weeksto several minutes, and scrapdecreased 50 percent. Productivity
Update on Excellence
System Sensor’s Lean Journeyt‹ˆ @“„–@–˜•†ˆ™™ˆ™L@Œ“–˜•œˆ@š‹ˆ“L@„”‡@š‹ˆ”@‘ˆˆ–@š‹ˆ@Š„Œ”™@˜•’’Œ”ŠN
Lea A.P. Tonkin
About System SensorThe world's largest producer of industrial smoke detectors, System Sensoris based in St. Charles, IL. Business is seasonal, with lots of school andnew building construction orders. The company has 30 OEM customersand thousands of other customers.
Founded in 1984 as a division of BRK Electronics, it became adivision of Pittway Corporation in 1991. Honeywell purchased the companyin 2000. Its markets include commercial fire, security, audio/visual, HVAC,and water flow. In addition to the St. Charles facilities, System Sensor hasoperations in Australia, Mexico, Canada, U.K., Italy, India, Singapore,Russia, China, and Hong Kong.
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Target Volume 18, Number 2
soared: units produced per directlabor rose 65 percent, as directlabor paid per effective unitdecreased 39 percent and sales perassociate increased 58 percent.
St. Charles associates elimi-nated a 50,000 sq. ft. shipping facil-ity and a 50,000 sq. ft. office/man-ufacturing area, developed a sys-tem for raw material JIT delivery(50 percent of raw material is han-dled on a JIT basis), boosted inven-tory turns from three to 12, andreduced inventory by $34 million (ifthe company maintained its threeinventory turns with the growth inbusiness, it would otherwise haveto carry $34 million more in inven-tory than they do today). OSHArecordables dropped 75 percent,thanks to their emphasis on 5S(housekeeping) and safety. Operat-ing income improved 21 percentduring 2001 despite flat sales asassociates continued to eliminatewastes (inventory, transportation,waiting, over-processing, motion,over-production, and correction).
Turnover used to average 20percent annually, and absenteeismwas a problem; both ratesdecreased dramatically over thepast few years as productivity rose.Recent layoffs and hourly employeeranks declining from 800 a fewyears ago to approximately 300also sharpen interest in staying onthe job.
A Sense of TimingTime-based competitiveness
demands defect-free productionwhen product is needed, in theamount needed. Odegaard empha-sized that on-time (Just In Time —JIT) production does not meanmaking units ahead of time."Excess product is waste," he said.
"Basic 'laws' of flow produc-tion help us to relentlessly searchfor and eliminate waste, leading to
the leanest process," Odegaardcontinued. They are:
1.Takt time: produce at the cus-tomer's purchase rate.
2.One-piece flow: Eliminate all excess inventory.
3.Pull production: "Customers" reach upstream to "suppliers."
Mapping the Process, Then Streamlining It
Getting started along thewaste elimination path meantmaking a case for change. Whychange when the company was amarket leader? Wasted steps,unnecessary wait times, and otherbottlenecks presented opportuni-ties for agile competitors to siphonSystem Sensor's sales. Valuestream mapping and spaghetticharting dramatically showedbulging production leadtime, cus-tomer response time, and manu-
facturing cycle time. Associateswalked the typical circuit fromreceipt of customer order to ship-ment, effectively bringing home themessage about waste-cloggedprocesses. Product typically trav-eled two miles within the plantbefore it was shipped; now it trav-els a small fraction of that distance.As associates followed processflow, they also discovered onlyeight minutes of labor in 15 days ofprocess time, with snags in finishedgoods and other areas.
What to do about the delaysand other wastes? System Sensorassociates developed functionssupporting the three distinct valuedelivery processes: new productdesign, supply chain, and manufac-turing. New product developmentchanges included restructuring theoperation into four business units,developing preferred manufactur-ing guidelines, and design based on
Update on Excellence
Figure 1. Demand Flow Group Leader Judy Cox showing tour participants process updates postedin the plant.
45Second Quarter 2002
total cost analysis. Preferred manu-facturing guidelines defined thepreferred manufacturing process,product flow, and preferred ven-dors that manufacturing and thesupply chain need to run the organ-ization. Total cost reflects the tran-sition from measuring new prod-ucts cost based on hours per thou-sand and standard material costs,to today's metric based on thosefactors plus indirect labor, antici-pated premium freight, excessinventory, scrap, and a new vendorcost.
Supply chain initiatives reducedthe total number of suppliers,decreased supplier leadtime,increased raw material inventoryturns, and also included a suppliercertification process. Now purchas-ing is responsible for negotiations,cost reductions, the number of sup-pliers, and vendor quality, while theproduction inventory controldepartment is responsible for day-to-day parts ordering, JIT deliveryprograms, sales forecasts, and themaster production schedule.Initiatives include vendor electron-ic Kanban Signals, consignmentinventory programs, and vendor-managed inventory programs.
Changes in manufacturingstarted with a transition to pull pro-duction. St. Charles associatesformed a Change Team to make ithappen. People were assigned tothe team, including a productionmanager, maintenance manager,industrial engineer, productioninventory control, sustaining engi-neer, quality engineer, and a shopunion steward. Team membersevaluated scheduling (build tostock versus build to order, back-flushing, raw material allocation,etc.). They also looked for ways tostreamline factory work area lay-outs and eliminate "monuments"blocking smooth production flow.
Manufacturing changed from
a build-to-forecast (BTF) to a build-to-order (BTO) process. Associateslearned about zero finished goods,consigned inventory, and flexibilityof capacity versus takt time.Standard work definitions, SMED,poka-yoke (mistake proofing), etc.concepts also became part ofeveryday activities.
Command and control func-tions shrank, WIP and finishedgoods inventory turns rose, and cus-tomer response time and through-put time improved along with pro-ductivity.
Their old inventory schedulingsystem got work orders pushedinto assembly cells. When workorders were completed, sometimesthere were disagreements on whatnumbers were produced — boost-ing NVA activities. Managers real-ized that they needed a better wayto generate production — a systembased on customer demand. "Weused to have a $600,000 masterproduction system (MPS); we gotrid of it," said Odegaard.
System Sensor people adoptedKanban (card) systems, mixedmodeling, and other schedulingtechniques to support pull produc-tion. Decreasing Kanban sizesenabled snappy customer responsetimes. One hundred percent of pro-duction material is handled withKanban systems; 50 percent of thecells are flow through from start tofinish, and 50 percent are multiplelevel processes scheduled using
Kanban systems. "Our final assem-bly cell can build what the cus-tomer wants almost immediately,"said Odegaard. Now associatesschedule the plant; the schedulingdepartment disappeared.
Their "lean tools" also includedsingle piece flow, SMED (singleminute exchange of die), etc.Standard work and employeeempowerment initiatives (account-ability for problem prevention andproblem solving) debuted. "Weused to have 30 days' inventory onhand in our warehouse, whichdropped to five days, and nowdown to one day," Odegaard said ofadded improvements.
Working Out the WrinklesThe lean transition was not
trouble-free. Materials headachescropped up: how to mesh the newpull system with MRP, controlissues (too much, lack of control),and vendor reliability questions.Accounting systems reflected tradi-tional operations, rather than thenew mode. Frontline managementbuy-in, associate work content,discipline, time management, andother issues dogged standard workefforts. Empowerment problemsincluded questions about, "What'sin it for me?" and whether manage-ment should give up responsibili-ties (firefighting was no longerneeded). Backsliding happened.
The answer to these problems,while not a panacea, was to investin training about pull production,etc. for all associates, and to launchkaizen (short-term improvement)projects, according to Odegaard.Among the lessons learnedthrough experience: What he called"Kamikaze Kaizen" projects helpedto train people on lean initiatives,but management initially did nothave a macro plan on how to useand schedule those events to
Update on Excellence
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MRO Today will hostDisney Best Practices Seminar
September 13, 2002Kenosha, Wisconsin
MRO Today and the Disney Institute are proud to unveil “The DisneyKeys to Excellence” in Manufacturing, a one-day, three course bestpractices seminar to be held September 13 in Kenosha, WI.
The event breaks new ground for MRO Today and the Disney Institute.For MRO Today, it marks its first venture into seminar and conferencecreation. For the Disney Institute, it marks its first on-the-road eventtailored specifically for the manufacturing industry.
The three course components of “The Disney Keys to Excellence” in Manufacturing areLeadership, People Management, and Value Chain Management.
Discover how effective leadership impacted employee/customer satisfaction and bottom-lineresults at Disney. Understand the importance of integrating your corporate culture into employeeselection, training, and care. Observe how Disney standardizes and streamlines processes, maxi-mizes resources and partnerships, minimizes waste, and reduces obstacles to achieve sustainablecompetitive advantages. The cost for this event is $ 350.
For more information on “The Disney Keys to Excellence” in Manufacturing or to download a form(pdf. format), go to www.mrotoday.com or call Paul Arnold at 920/691-1219.
accomplish plant-wide improve-ments. "We had goals slated to runa certain number of kaizen eventswithin a year, a big mistake,"Odegaard said. "We bouncedaround the factory and office ran-domly selecting spot areas forimprovement instead of using thevalue stream map to lead us toareas that needed to be improvedthat would improve the entire value
Editor's note: System Sensor will hostone of the plant tours during the AMEAnnual Conference November 4-8 inChicago.
Lea A.P. Tonkin, Target editor, is based inWoodstock, IL.
stream, not just a small portion."The journey to lean manufac-
turing continues at System Sensor.Consistent, day-by-day gains in allareas of the organization, com-bined with increasing associateself-management, better metricsfor on-time deliveries, etc. are tar-geted for improvement. That's whatlean is all about — makingprogress, staying in the game.
