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The Art Of Slashing Lead Times

Mon, 04/04/2011 - 7:06am
Joel Hans, Associate Editor, IMPO

One of the company’s machining centers, which create precision parts for customers in a variety of markets.

“People want product as soon as possible. The days of six, eight, 12-week lead times just don’t exist any more. We have more customers knocking on our door saying, ‘Okay, you said two weeks, but can we get it in a week?’ That really changes things.”

This observation on the nature of lead times in manufacturing comes from Sam Crueger, a manufacturing engineering manager at Pointe Precision. The company, based out of Plover, WI, provides contract precision CNC machining — including milling, turning, grinding, heat treating, CMM inspection, and more — to manufacturers around the country.

With such a large portfolio — and because they supply a wide variety of businesses and markets — Pointe Precision’s operations needed to be as efficient as possible. Its traditional production line simply was not able to handle the quantity and complexity of the orders it was receiving, which included extraordinarily sensitive parts, such as fuel regulators used on jet engines. Parts would sit for days — or weeks — between departments. Despite good business, the company’s managers consistently recognized lead times as a critical area in need of improvement.

In order to reduce the unnecessary wait to fulfill an order, the company’s managers had to undertake a drastic shift in philosophy. The solution, after much discussion, was quick response manufacturing (QRM). In the most advanced QRM-enabled area, lead times have dropped by 75 percent.

So, what exactly is QRM, and how did it change Pointe Precision’s business?

The Center for Quick Response Manufacturing

The Center for Quick Response Manufacturing, housed at the University of Wisconsin-Madison, was established in 1993 by Rajan Suri to develop the theory and help manufacturers implement techniques for reducing lead time in manufacturing environments with high-mix or custom-engineered products. Leadership has since been transferred to Ananth Krishnamurthy, who now guides the next generation of manufacturing professionals — his students — through the process of implementing QRM at interested companies.

The QRM philosophy attempts to eliminate non-value added time in a process by changing the organization to create product-focused units called “cells.” The goal is to dedicate resources to a family of products and finish all the tasks needed to satisfy customer requirements within the cell. From a staffing and management point of view, a cell has multi-functional and cross-trained personnel with ownership and accountability to make decisions to improve quality and reduce lead time. Krishnamurthy says, “Most factories have an organizational structure that doesn’t really support lead time reduction. When you create a cell, essentially you are creating an entity where all of the machines required to process an order are co-located. It’s like a dedicated, mini-factory for those customer orders, and that really allows you to reduce a lot of the lead times.”

Despite offering technical expertise during the QRM overhaul, the Center is not a consulting company, but rather a university-industry partnership entity that educates its students while utilizing their burgeoning skills to aid any company interested in implementing QRM. Krishnamurthy says, “We are here because we view these members as partners, and we learn as much from them as they learn from us.”

In the last 18 years, the Center has seen serious results from this collaboration. According to Krishnamurthy, companies implementing QRM philosophies have seen lead time reductions of at least 50 to 75 percent on average. One company in California was able to reduce lead times from 75 days to four days. And, says Krishnamurthy, “They were able to get costs down by 30 percent.”

Leaving the ‘Old Way’

Pointe Precision’s production relies upon a low-volume, high-mix catalog of 3,000 SKUs, which proved to be too complex for traditional manufacturing techniques. Ron Polum, Pointe Precision’s supervisor, explains the pre-QRM process: “Before, we had a lathe department, a machining department, a deburring department, a grinding department, and a heat treating department. In the lathe department, for example, they would be turning all the parts (of an order) and putting them in a basket. These would go to a machine center, where they would sit for two or three days. So, there’s probably two or three days — maybe even up to a week — of sitting between operations.”

This time between departments was drawing out lead times beyond acceptable levels, for both Pointe Precision’s internal metrics and customer demands. In order to address this lead time lag, which Polum calls “white space,” the company’s managers approached QRM with an ambitious — yet cautious — eye.

The company’s managers began to immerse themselves in literature relating to QRM by establishing “book clubs” to get employees informed. They attended informational seminars from the Center, which fleshed-out various QRM principles and how they could be implemented on the plant floor. According to Scot Barton, vice president of sales and operation, the company’s executives and supervisors began to discuss “talking points about the myths about manufacturing, and why QRM could help us.”

On top of the informational support, the Center was able to provide hands-on support from a group of students from the Manufacturing Systems Engineering program at UW-Madison. By working closely with Pointe Precision’s operational managers, these students helped push the QRM philosophies out onto the plant floor. All the while, the Center used the data to further refine their collaborative techniques.

Barton couldn’t be more pleased with the decision to work with the Center. He says, “The support from the QRM Center is unbelievable. It’s tough to accept at times, and we all had questions when we started. At the end of the day, you have to find your own way within the philosophy.”

An employee in Pointe Precision’s BBCH cell attaches the tooling necessary to machine one part from the company’s catalog of 3,000 SKUs.

When ‘Cells’ Are a Good Thing

According to Polum, the transition into a QRM-enabled production line was slow, but deliberate. The team had to rearrange machinery into cells, where an entire part category could be produced — from the initial order to finished product — in a few hundred square feet. The first cell, named BBCH, was started on a volunteer-only basis, for those employees who were willing to accept a shift in philosophy, and make a difference. Since implementation, the cell has become completely self-sustaining, from work orders to production. The impact hasn’t only been on lead times; quality has increased as employees find themselves more empowered by their work.

Aside from the physical process of relocating machinery, Pointe Precision’s managers had to realign old ways of thinking on the plant floor, which meant that getting buy-in from employees was critical. Barton says, “I thought our group did a really good job getting buy-in from the shop. We let everybody have their say. At times we had to debunk certain traditional knowledge, or the way we used to do things. Companies who have failed did not do enough in including their most important asset, and that’s their people.”

A comprehensive cross-training process allowed the cell's employees to be more flexible. Instead of working on a machining center all day, employees in the QRM cells can easily move to deburring, or a lathe, as work shifts between various parts of the cell. This reduced lead time significantly, but had important corollary effects as well, according to Polum: “In the cells, they get trained on the whole process, which leads into a lot more part ownership, because they see it through the whole process.” Quality increased dramatically, because employees would be better able to observe flaws and make changes before bogging down the cell with parts that would ultimately be rejected during inspection, for example.

Despite the initial hard work implementing QRM into its production lines, Polum says the payback was immediate: “I think we almost immediately saw improvements (by) getting the machines located together. If we do nothing more than that, that’s going to reduce lead times, because people can see the work and reduce the amount of WIP we have in the process.” In the BBCH cell, lead times have dropped from approximately 39 days to 13 days.

QRM as a ‘Journey’

Despite the drastic improvements in lead times, quality, and employee ownership of parts, Pointe Precision’s managers understand that QRM is an ever-evolving process. Even the BBCH cell, with 13-day lead times, has room for improvement, with three additional cells nipping at its heels. Polum sees a future where the entire company’s production — even the portions that still rely upon traditional manufacturing techniques today — are shifted to QRM cells.

Barton calls their QRM efforts “The Journey.” He says, “It’s never going to be done. It’s a continuous improvement situation in all of the cells. It will continue to be that, and our hopes are — and our plans are — that it will continually get better, and we’ll keep reducing lead times.”

At the end of the day, Barton is aware that Pointe Precision is embarking on a drastic shift in the way it conducts business. But that’s only parallel to the innovation constantly occurring within the Center itself: “What they do, and how they go about looking at manufacturing, is different from anything we’re doing in manufacturing today.”

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More information on Pointe Precision's CNC manufacturing business can be found at www.pointeprecision.com. Details on The Center for Quick Response Manufacturing are available at www.engr.wisc.edu/centers/cqrm.

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