Tuesday March 26, Session 10311

Lean Manufacturing's Unexpected

Windfall: A Lower Carbon Footprint

Charles M. Cohon, CEO

www.primedevices.com

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�Make my company more profitable.

�Help my company meet competitive threats.

�Achieve sustainablecompetitive advantage

Lean usually is a way to:

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�Make my company more profitable.

�Help my company meet competitive threats.

�Achieve sustainablecompetitive advantage

But not for today!

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Today Lean is a way to:

�Reduce my company’scarbon footprint.

�Reduce my industry’scarbon footprint.

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Page 129

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“Consider the waste of overproduction, for example. It is not an exaggeration to say that in a low-growth period such waste is

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“Consider the waste of overproduction, for example. It is not an exaggeration to say that in a low-growth period such waste is a crime against society more than a business loss.”

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Agenda

�FNGP Seal & Gasket recast from Lean Manufacturing to Green Manufacturing

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�Transition from Batch & Queue to Single Piece Flow

Agenda

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�Two examples from Lean Thinking

�Lantech

�Wiremold (power strips)

Agenda

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�Reduce my company’scarbon footprint?

�Reduce my industry’scarbon footprint?

What are the traditional ways to:

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�Commuting�HVAC systems�Industrial processes (ovens to fork lift trucks)

Atmospheric emissions

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�Duplicated servicesTwo airlines that fly halffull planes from O’Hareto Wichita may decide to code-share.

Atmospheric emissions

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�Sewage�Industrial processes�Underutilized plating operations may be consolidated.

Wastewater emissions

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�From lights and HVAC�From industrial processes

�A lean manufacturer can speed the exit of high-consuming operations.

Power Gen. Emissions

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FNGP (seal & gasket mfr.) Ligonier, Indiana

12002300Feet2 utilized

60055Units/worker/mo.

321Workers

Mo. 40

1,800Mo. 1

1,155

Source:Lean Thinking,Womack and Jones

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

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Feet2

Units/wkr./mo.

213Workers

Mo. 40Mo.40

Not Green Company

Green Company

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How does this reduce the Lean Company’s

carbon footprint?

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�Commuting

Atmospheric emissions

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�Sewage

Wastewater emissions

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

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23001200Feet2

Units/wkr./mo.

Workers

Not Green Company

Green Company

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How does this reduce the Lean Company’s

carbon footprint?

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�HVAC systems

Atmospheric emissions

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�From lights and HVAC

Power Gen. Emissions

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

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Feet2

600Units/

wkr./mo.

+2Workers

Mo. 401,200

Not Green Company

Green Company

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

120030

Feet2

Units/wkr./mo.

Workers

Not Green Company

Green Company

2300 1200+800

33+2

2000

Green Company

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23002000Feet2

55600Units/

wkr./mo.

213+2Workers

Mo. 401,155

Mo.401,800

Not Green Company

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How does this reduce the this industry’s

carbon footprint?

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�Commuting�HVAC systems�Industrial processes (ovens to fork lift trucks)

Atmospheric emissions

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�Sewage�Industrial processes

Wastewater emissions

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�From lights and HVAC�From industrial processes

Power Gen. Emissions

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The Lean Manufacturer accelerated the exit of a

high-consuming operation

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Batch & Queue

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V C W P

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V C W P

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V C W P

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V C W P

Productive Work

42Unproductive Work

Raw Material Work In Process (WIP) Finished

Goods

Excess Carbon Footprint

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Excess Carbon Footprint

�Early/unneeded emissions

�Damage to inventory

�Repair & scrap costs

�Complex mfg. requires MRP and/or ERP

�Bar codes and/or RFID

�Data center costs

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�Obsolescence

�Rust and dust

�Warehouse, racks, warehouse personnel, fork lift trucks, etc.

Excess Carbon Footprint

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�Intermittently defective work can be hidden by excess inventory.

Excess Carbon Footprint

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V C W P

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V C W P

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�Defects repeated across an entire batch.

Excess Carbon Footprint

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V C W P

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V C W P

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Single Piece Flow

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V C W P

Single Piece Flow

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V C W P

Single Piece Flow

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V C W

Single Piece Flow

P

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V C

Single Piece Flow

PW

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V

Single Piece Flow

PWC

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Single Piece Flow

PWCV

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PWCV

Preventing Defective Batches

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PWCV

Preventing Defective Batches

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WCV P

Preventing Defective Batches

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CV PW

Preventing Defective Batches

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V PW

Preventing Defective Batches

C

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We never have the time to do it ________ but we always find time to do it ________

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We never have the time to do it rightbut we always find time to do it ________

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We never have the time to do it rightbut we always find time to do it over.

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…But as that department grew and became more important and more strikingly valuable, we began to ask ourselves:

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…But as that department grew and became more important and more strikingly valuable, we began to ask ourselves:‘Why should we have so much to salvage? Are we not giving more attention to reclaiming than not wasting?…’ ”

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“…Our studies and investigations to date have resulted in the savings of 80,000,000 pounds of steel a year that formerly went into scrap and had to be reworked with the expenditure of labor…of upward of two thousand men.”

1926

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Henry FordToday and Tomorrow, 1926

page 98

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Lantech Stretch Wrapping Machinery

�Disaggregate cutting, welding and painting departments

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LantechManufacturing Cells

V C W P

V C W P

V C W P

V C W P

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Lantech (4 Years)

�Defects/machine from 8 to 0.8

�Lead time went from 16 weeks to 14 hours.

�End to expediting

�End to MRP/ERP

�Mfg. space cut in half

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Wiremold (power strips)

�Inventory substituted for machine maintenance

�Inventory substituted for planning.

�Massive back orders tied up Customer Service

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�Guaranteed no lean-related firings in exchange for union cooperation.

�Co-location on factory floor

Wiremold (power strips)

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�Make cord sets as needed.

�Customer service only touches an order to enter it.

�Shipping quickly and completely, so no backordering and no expediting.

Wiremold (power strips)

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Wiremold (5 years)

�Customer service department:

�Smaller

�Cut order entry from 1 week to less than 1 day

�Errors from 10% to under 1%

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Wiremold (5 years)

�Manufacturing

�Manufacturing space cut in half

�Annual Productivity Growth 20%

�Inventory turns 3.4 to 15.0

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The Drill vs. The Hole

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The Hole: Lower Carbon Footprint

The Drill: Lean Thinking

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Tuesday March 26, Session 10311

Lean Manufacturing's Unexpected

Windfall: A Lower Carbon Footprint

Charles M. Cohon, CEO

Prime Devices Corporation