The word “LEAN” when used in business is another word for “Efficiency”, cutting out waist, lost time, and lost energy. By Gary Shotton #000160
By Gary Shotton
Hello, my name is Gary Shotton and I’m the founder of “Inspiring Better Business”, featured on IBBTalks.com, a global initiative.
I’m glad you’re with me. I hope you will join and be a part of this at any level you want to be involved. We’re looking for more speakers so we want you to do that if you would. Today, I’m going to talk about the subject of lean, L-E-A-N. This is kind of a buzzword that would only mean something, the way I’m going to use it, in the manufacturing world. I might go to a meeting and I might have some people there who might ask, “Hey, have you gone lean yet?” or “are you going lean?” or “how are your lean projects?”. So it’s a buzzword.
Almost every industry has buzzwords. LEAN is one that kind of makes sense in many contexts. If you were in the meat industry, you might get some beef that was leaner. Well, that would be some beef or a hamburger that doesn’t have as much fat in it. You have gotten rid of the extra. You only get pure meat. Or you might have another situation that you would think of as Lean. You would say that this gentleman or this lady is real lean. Like, they are a long distance runner because they don’t have much fat on their bones. They are a little skinny. So, it is kind of long the same line.
In manufacturing we have to cut out the fat. We got to cut out the extra. We have to cut out the inefficiencies, because the inefficiencies are what are going to cause us to either lose or make money. You see, we can’t just go to our customers and say “Hey, I’m not quite as efficient as I should be, so I think you ought to pay me more money for these parts. You should make it up with a higher price, to make up for my inefficiency.” Quite the opposite is true.
Every one of our customers have come to us and said: “We need you to be cheaper. We want to get the same product, the same quantity.” They know my labor prices are going up but I need, in one case, five percent cheaper. One customer actually asked for 25% cheaper across-the-board. They knew that this reduction was not realistic, but I agreed to 10% price reduction because they were a very big customer – a very good customer. They knew that we were doing things along this line to be more lean. We’re studying lean and they knew that we could give that kind of a discount to them. Not a discount but a reduction in price. So, we’re talking about taking out waste. Taking away the extra. Taking out the fat.
Now in our company you can see behind me we have all kinds of parts, and I’m in the finished goods department. We have about 40 CNC machines and about 40 machinist. We work two shifts and so we’re constantly developing a culture. We actually have a coach that has come in in the past. He doesn’t come as often now, because he’s trained us how to think lean, how to be more lean, how to propagate the idea of lean throughout the company. We have a culture of trying to be lean or being leaner. Things we improve on are the way we set up particular devices that hold these parts in the machine, they call them jaws. These jaws are numbered now in a way that you can easily find them. We have what’s called a setup sheet, and the way we do the very first part. We do this is some of these parts over and over and over again year after year after year, but a new person might come into the company and they have never done this part before. So we write it out as a work order – a work sheet, work instructions – that shows them how that this is done best – how we want it done. We are standardizing things.
We went to actually using a camera – like the camera I’m using here – and actually video record the worker and the process for a little while. It was not done all the time, but we video recorded them to see whether or not they were losing extra motion. If they are taking extra motion. In one case, they were turning around and they were getting their parts from behind them. He could have set them on a little bench right beside him and they can actually just pick them up and put them in the machine. That all takes time. We had some of the bolts that they were using in this video recording process. They were too long of a bolt. They don’t need to have that long of a bolt. Because if you are turning the bolt you don’t need that many revolutions. See, if we can just take seconds out or minutes out of our process that creates more efficiency. Because, our parts are billed on the amount of time it takes to make them. So, all this is a part of the life I’m in.
Now, I actually didn’t choose to be in the machine shop business. I felt that I was following God’s direction for my life and this was available to me. I got clarity in my own way that this was the right thing for me. And, it has been the right thing because now other people, other than manufacturing, are looking at the concepts of manufacturing – called lean. I was down several years back where I was at the city government. We live in the city of Tulsa Oklahoma and at the city government they had seven different major departments: like the parks department, the police department, the fire department, the buildings and ground, the roads, whatever they were. They realized that they had seven different ways of just processing payroll. Well, they can go lean. Let’s go through the whole thing. Let’s find out the best way to process payroll. The very, very, very, best way and always work at keeping improved. And, then we’ll do it all the same throughout all of the different departments. Within the city that way if an individual from one department, like the police department, wants to go to work for the fire department, they know the system. The system is continually being improved. That’s the key.
You’re never going to finish the process of lean. I’ve heard somebody say, “have you gone lean?” No, we’re going lean and we’re never going to end. It’s going to keep going and going and going. We can never finish this process. You see the scoreboard for a business is profit or loss. If you’re not making a profit your score is negative. You got beat. If you are making a profit, then you’ve got to measure that by how much profits you are making. That’s where you’re trying to score. You have got to do certain things like: hire right, you have to have a process – there’s another whole teaching on systems.
We are a ‘processes and systems’ thinker. I think that way in my life. I actually think that way at home. If I’m going to pick the socks out of my drawer I want to think if I need anything else. While I’m there I’m going to go ahead and get that. So, I’m trying to think conservatively. Now, am I always conservative? Am I always organized? “No.” Don’t let me give you that idea. I’m just saying that I’m always trying to improve where I am. So if you’re going to look at it, we’re going to look at it even in the offices. You see, an office can become lean. You can actually benefit if you become more efficient, you may need one or two less employees to finish the same amount of tasks. You probably need to have computers. Now, you don’t fire somebody, because that will defeat your purpose. You wait for attrition. You wait for someone to quit or for someone to leave. You just don’t fill the position, or alternatively, rearrange or assign them to a position to better fit them and the company.
We went from three people in our front office to one. People are surprised. Someone that I respect very highly toured our shop. They said: “Well, we want to see the front office.” I walked in and I introduced my visitor to this person in the front office. Her name happens to be Joyce. I said here’s the front office and here’s Joyce. They said: “You’ve got to be kidding; you don’t have any more help than this? You are doing millions of dollars’ worth of work and you don’t have more office?” Really, we have a process that everything through our system is processing through. So, when it gets to the front office it’s a matter of some final touches. We also build the jobs. It’s a matter of putting on the final touches. We pay the bills. It’s a matter of some final touches and we process payroll. We don’t need twelve people in the front office because we’re lean. We’ve cut out waste. There’s our profit. There’s the money that goes down the tube.
I’ll tell you this – people like that, they like to work where they’re accomplishing something. If they do not like it you’ve got the wrong person. But most people like to go home feeling satisfied, thinking that they’ve got the job done. And basically we end the day with the job done and we feel good about it. The way I’m doing these videos, the way I do the videos for you, is the way we teach and train and communicate to our workers, because we couldn’t get everybody in the same room at one time. Sixty people in one room is not going to happen. There is going to be five, six, or seven people gone. I record a little video, just like this video, and they take a test. They watch the video and take the test. I know for sure everyone got trained because we’ve gone lean. I hope this makes sense. I hope you get some ideas. I hope you see the process. I also hope you would share some of these teachings to other people, to be a part of, “Inspiring Better Business”. Thank you very much!
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