© TXM Lean Solutions Pty Ltd 2012 CONFIDENTIAL1

THINKING LEAN FOR PICTURE FRAMERS

LESTER TROUGHTONTXM LEAN SOLUTIONS

© TXM Lean Solutions Pty Ltd 2019 CONFIDENTIAL2

ABOUT TXM• Australian based, operating since 2004• Huge portfolio of businesses within Manufacturing, Distribution and Service business in

Australia, China, US and UK• Have worked with >100 UK businesses since 2016• In UK TXM has 3 Senior consultants with extensive Lean experience and practical operational

leadership experience.

Business Development Manager at TXM Lean Solutions with over 30 years’ experience with:• production managers and shift operators to maintain product quality and

understands the challenges of 24- hour lean manufacturing environment• major global accounts including JLR, Siemens, AstraZeneca, Unilever and many

moreLester Troughton

© TXM Lean Solutions Pty Ltd 2019 CONFIDENTIAL3

IMAGINE YOUR BUSINESS WITH DOUBLE THE SALESWHAT IS STOPPING YOU FROM GETTING THERE?

LETS LOOK AT WHAT TYPICALLY HAPPENS WHEN AN SME GROWS…

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ECONOMIES OF SCALE – WHAT SHOULD HAPPEN WHEN YOU GROW

0

20

40

60

80

100

120

Profit

Overheads

VariableCosts

• Variable costs grow in line with sales

• Overheads grow slower than sales

• Profit margin (% and $) grows faster than sales.

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DIS-ECONOMIES OF SCALE – WHAT USUALLY HAPPENS

0

20

40

60

80

100

120

Profit

Overheads

VariableCosts

• Variable costs grow faster than sales.

• Overheads increase with sales or faster.

• Profit margin (% and $) disappears

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WHY DOES THIS HAPPEN??

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WHEN YOUR STARTED

YOU YOUR CUSTOMER

SIMPLE – EASY TO MANAGE

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THEN YOUR BUSINESS GROWS

YOUR COMPANY

YOUR CUSTOMERS

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And GROWS….

YOUR COMPANY YOUR CUSTOMERS

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And GROWS….

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The answer to all this complexity is

of course…….COMPUTERS

YOU START TO LOSE CONTROL OF YOUR BUSINESS

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THE CONSEQUENCES OF GROWTH = INCREASING COMPLEXITYWITHOUT BETTER BUSINESS PROCESSES YOU WILL GET:

• Lead times increase.• Batch sizes increase to maximize

“efficiency”.• Inventory increases.• Demand for cash exceeds extra cash from

revenue. • Insufficient cash to support growth.

• More people, more layers, vertical silos more overheads.

• Labour efficiency falls• More people harder to supervise.• Defects and problems increase.• Problems don’t get solved because there

are just too many to solve. • Profit margins decrease.

YOU WILL STOP GROWING AND SUFFER CASHFLOW PROBLEMS

© TXM Lean Solutions Pty Ltd 2019 CONFIDENTIAL13

WHAT IS LEAN?

• A set of principles and techniques that eliminate waste , and deliver to our customers…

exactly what they need when they need it in the quantity they need in the right sequence without defects and at the lowest possible cost

Value

Waste

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WHAT IS VALUE?• Those activities that a client is willing to pay for when they

engage our services.

WHAT IS WASTE?

What You THINK Your Process Is

What It ACTUALLY Is

What It SHOULD Be

“Waste is often disguised as useful

work.”Hiroyuki Hirano

• Everything else!

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THE EIGHT WASTES

Looking through your Lean lenses you can identify the eight wastes

ransportation

nventory

otion

aiting

ver-Processing

ver-Production

efects

kills

TI

MWOODS

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Challenges in FramingMain Characteristics in Framing Business

• Usually ”high street” direct to public• Typically 1 to 10 employees• Huge range of options – materials, finish, size etc.• Time & skill intensive• Typical customer lead times 1 to 2 weeks• Between 10 and 20 jobs per week• Main Issues

• Work Flow• Inventory

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Workflow – Waiting, Motion, Over-Processing, Defects & Errors• Do I have a workflow? When was the last time you

mapped your workflow?• Where does it start & end?

– Reception:• Minimise time in shop and with customer – no chair etc. • Perceived Value in long lead times “Time = Quality” dangerous

game with Online, Finish and move on• Charge a premium for priority

– Customer Requirements AND Production Requirements– Order form stays with order/take information only once

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Lean Principle - Visual Management

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Lean Principles –Takt Time & Load Leveling

• What rate should I be working at?• Takt Time = Customer Demand/Working Time Available

• e.g. 25 Frames per week = 5 per day = 84 mins per frame

How does 84mins relate to your lead time of 1 week?• Analyse the processes:

1. Identify the steps in the framing process2. Time each step3. Aim to bring each step below the Takt Time4. Level the Loads – adjust the resources to achieve the TAKT TIME for each step(If your total time is <84mins you have spare capacity)

Cut Mount

Cut Frame/Cut Glass

Fit Frame

Measure

Takt Time = 84mins

Cut Mount

Fit Frame

Measure

Cut GlassCut Frame

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Parkinson’s LawWhere can I save time and effort?

Technology not always the answer• Flow of work – Overhead

pneumatic tools• Are the right tools always

available• Cutting in multiples but

BATCHING IS BAD• Layout – Bench example with

200 pieces per day x 7m = 1.5km

• Bench height/Under Bench Storage

Lean Principle – 5S

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TXM PRACTICAL 5S – P5S

1. Sort out what we ‘need’ and don’t need in our work area

2. Set in Order all the needed things, “a place for everything”

3. Shine & Check the area regularly with our eyes and a broom. Determine “everything is in its place, safe, clean ready for use” Look for exceptions, these are opportunities

4. Standardise processes and the ways we work5. Sustain this best practice through identifying

opportunities and fine tuning

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How much stock do I have?• How is this recorded

Do I know where my stock is?• Stock location/accuracy

How much stock do I need?• How is this analysed

Do I have the right stock?• Fast and slow moving lines• Chops – pre cut frames (2x £) for convenience• Carriage costs

Am I buying the right quantities?• Do I really need to buy in bulk

How many suppliers do I have?• Do you have too many? Why?

Too many questions where do I start?

Inventory

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LEAN PRINCIPLES – KANBAN & SAFETY STOCK

• Stock Level should be based on:• ABC Analysis• Takt Time = rate of order/production• Supplier Lead Time – reorder level• Safety Stock – based on mean order variation

• Production Rate and Pacemaker sets the demand

• Stock is not forecast but is ordered on demand from a “Make to Order” PULL Kanban - Signal to Replenish

• “Make to Stock” - Ties up Working Capital, reserve for highest demand items

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LEAN PRINCIPLE – ABC ANALYSISFRAME STYLE MIX

Classification Number of Styles

% of Styles % of Sales

A 3 2% 53%

B 40 23% 42%

C 18 10% 4%

D 115 65% 1%

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ABC ANALYSIS – SUPPLY CHAINCategory Description Availability

TargetZ Score No. Sku’s Annual

Usage% of inventory

Stock Availability

A Items Represent top 50% of unit sales

>98% 2.05 3 7362 15% 84%

B Items Next 45% of unit Sales (A+B =95% of units

>95% 1.65 40 6626 63% 89%

C Items Next Final 2% of unit sales

>84% 1.0 18 736 6% 87%

D Items Inventory >52 weeks sales or no sales

Nil – Non stock 0 115 427 16% 71%

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TO FINISH…..

• Think about the core process in your business – the one that drives your sales.

• What is it that the customer actually values and pays for?• How much of the effort and resources of your business is spent on

actually delivering that value?

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THANKS TO CUSTOM FRAMES, NOTTINGHAM…www.custom-frames.co.uk

TXM Lean Solutions Pty Ltd

7200 The Quorum, Oxford Business Park North, Garsington Road, Oxford, OX4 2JZ, United Kingdom

P +44 (0) 7842 510188lester.troughton@txm.comwww.txm.com

See how we have helped businesses increase their profits and grow by 60%:www.txm.com/case-studies