Lean manufacturing helps companies survive recession, USA Today reports:
Sealy is among thousands of manufacturers that have remained profitable during the recession by using a practice called lean manufacturing to become more cost-efficient. It entails making each widget in an uninterrupted flow, rather than as part of unfinished batches; producing only what customers order; and ruthlessly chopping billions of dollars in inventory.
We used to call that just in time inventory. There is more to lean though:
Bed assembly has been streamlined at every turn. Before, mattress makers asked workers in carts to fetch raw materials from mammoth shelves 100 feet away, sometimes causing delays.Top panels and side borders were made with no coordination. As a panel spilled off a long conveyor, a dedicated “match-up” worker grabbed it and sifted through mounds of borders to find its mate. In the course of a day, workers spent hours “hunting and pecking,” says plant manager Ricky Johnson. Employees cranked out as many units as they could to ensure colleagues down the line had sufficient materials. They were paid based on the number they produced.
Today, raw materials are arrayed neatly a few feet from quilters and mattress makers. Workers hew to a precise schedule that reflects orders from retailers such as Mattress Discounters or Macy’s. A woman who cuts the borders to length ensures that matching panels are being produced at the same time.
After putting the final stitching on a panel, a worker strides to a rack about 10 feet away, picks up the matching border and places them together in a cart.
Each bed is completed in four hours, down from 21, because there’s less wasted time between production stages, and median delivery times have been cut to 60 hours from 72. Plants have cut their raw-material inventories by 50% to 16 days’ worth. By eliminating thousands of square feet of “work in process” — piles of partly finished beds — and moving workers closer together, the Williamsport facility last year freed enough space to combine two shifts, slicing costs.
Companywide, Sealy has reduced its workforce by 30% in five years through attrition and temporary staff cuts, Hofmann says. It now employs far fewer material handlers. Productivity is up 50%.
The shift by Sealy and others represents a new perspective. For nearly a century, manufacturers believed that cranking out hundreds or thousands of parts then shifting the load to the next worker was most efficient. It ensured makers never ran out of parts or finished goods. And it minimized equipment changeovers to make different parts that could take hours or even days.
Yet along with forcing companies to carry too much inventory, the strategy yields a high rate of defects: A worker down the line finds a flaw only after hundreds of tainted parts had been made, Sharma says.
(Hat tip to Bill Waddell.)