Archive for July, 2010

An Industry Stuck in the Past

July 29, 2010 by Clark

Over the past two years I’ve had the opportunity to visit an industry that has some of the largest manufacturing facilities in the United States. There were five distinct things about each one of the facilities that I noticed the second I walked out onto the manufacturing floor:

  1. The equipment was very old, typically 1940’s vintage
  2. The equipment was very dirty and well worn
  3. The air smelled of machine lubrication
  4. The sound level in each facility was very loud and the floor shook as the machines processed their components
  5. There were massive amounts of inventory everywhere representing the many different stages of the process

With my background in manufacturing and lean automated equipment, I was overwhelmed at the opportunity for improvement and waste elimination associated with this industry.

In many of the facilities, I noticed lots of manual labor sorting components.  After asking why, the pat answer was, “This is how we ensure a quality part makes it to our customers.”  My immediate thought was, “ARE YOU SERIOUS?”  After probing a bit I found that there were very few, if any, in-process inspections to ensure quality product was coming off the end of the manufacturing line.

The level of NCM (Non Compliant Material) throughout the plants was out of control.  I found bins of parts with NCM tags as old as 2 years in one facility.  Again, “ARE YOU SERIOUS?” popped into my mind.

I’ve spent much of my past 20 years in the Aerospace, Automotive and Medical device industries.  In each of these industries, modern equipment and processes as well as lean manufacturing techniques were employed to ensure the products being produced were of the most high quality and reliability.

So what has kept this industry from stepping up and joining the ranks of world class manufacturers and what can be done to break this cycle of inefficient manufacturing?  I don’t know but am confident that someday, some company will break the mold and embrace lean thinking.  When that happens all the other companies in this industry will have no choice but to follow or be left behind.

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Knowing When to Cross Train

July 22, 2010 by Brad

Setpoint is a small business that is agile and can adjust as quickly as the management team can move. There are not committees, boards, and endless studies that have to be approved before decisions can be made. Layers of management don’t exist in our company and overlapping job functions don’t happen very often. Everyone wears multiple hats, but in most job functions, we are only one layer deep. If that person is out of the office that job doesn’t get done.

In most cases this is ok, because it is only for a day or two. But what happens when it is a longer period that the person is unable to be at work. If it is a critical function, it can be disastrous; business can grind to a halt very quickly.

At Setpoint we decided to implement a very simple form of cross training to account for those events. We asked ourselves this question – If the person that is responsible that job were gone for two weeks, what impact would this have on the company? We then grouped those job functions or key processes into one of three buckets:

  • We would be OK
  • We would be OK as long as nothing broke
  • We have to have that job done virtually every day

We would be OK

In this category go jobs or functions that are important to the company, don’t necessarily have critical things that need to be done on a daily basis. One job that we put in this category is the management of our website. If we had to leave it alone for a couple of weeks, we would be ok.

We would be OK – as long as nothing breaks

Identify ones that if nothing breaks, life in the company can go on, but if something goes wrong – it has to be fixed. All IT functions are group in this category. If nothing breaks, the company is fine. If something does go wrong it needs to be fixed quickly.

We have to have the job done virtually every day

Jobs that we grouped under this category are:

  • Payroll
  • Invoicing
  • Procurement
  • Accounts Payable

For the first category we have done nothing to prepare, for the second one, we are working on it and haven’t quite figured out what to do, the last category we have implemented a cross training program. We started by identifying an alternate that would learn the job and be able to do it if the primary person was not here. How much training needs to happen? Setpoints view is, who ever the alternate is, has to practice enough that they can take over the job function if needed. That doesn’t mean that they know all the esoteric details of what can happen, but generally they can handle what needs to be done.

One example, we are an open books company which means that every Monday at 1:00 PM we gather together in what we call the “huddle” and review the key numbers on a big white board. Kara is our alternate for this and once a quarter she figures out the numbers and then puts them up on the white board. If there are intricate details that need to be adjusted for that week, she doesn’t do that, but she is confident enough through practice that she can deal with 95% of what it takes do the white board for our huddle. This has come in handy more than once when the primary person is out for the day.

Planning for these events in this way makes it easier for management to sleep at night.

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Setpoint’s Project Management Method Part 2

July 15, 2010 by Kara

In part 2 of our project management series, Joe Knight our CFO talks about why traditional project management doesn’t work.  Traditional project management uses accounting that measures revenue earned by the percent complete based on costs.  We believe this idea is flawed and Joe explains why.  Setpoint measures progress on a project by labor only, or by earned value rather than on a percent complete of materials spent.  Stay tuned for part 3…

Catch up on Project Management Part 1

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Has Computer Aided Design (CAD) improved our lives?

July 8, 2010 by Setpoint

We all remember how CAD would save the world and make our engineering lives more productive, error proof, and repeatable. Well the jury is in and it’s far from the end all be all.

CAD software is just one of many tools that we engineers use.  It has its value but I have found that it’s not for everything and in many cases it can hinder getting the work done.  It does not take the place of a thinking brain and sometimes it will lengthen the time line on certain projects.  When using CAD people will sometimes go into a black hole and design something that may be a bad idea to begin with, and instead of being trashed right then and work on the next iteration, there is now a beautifully articulated drawing complete in every way that is discarded and worthless. Sometimes something is designed in CAD that just needed a rough sketch.  In the past we could take paper and hand sketches over to a machine shop and work with them and get the parts more quickly than the time it takes to get a 3D model.

At one point one of our customers forced us to switch from one CAD software program to another product.  It cost us $60,000 in hardware just to make the change and we experienced a drop in performance since the engineers had to learn a new program.  The first year we looked at the mechanical engineering cogs for weldments, tools, machined parts, and sheet metal material, looked at the design and engineering hours and normalized the cost of living, cpi, and for everything we’ve bought since the conversion.  The ratio was dead steady and then there was a decline in productivity with a hard cost of $300,000 and a soft cost for training and learning of another $300,000.  Upgrading and going to new systems all the time is a complete waste of money.  If you think you’re going to be more efficient, you’re not.  The feature set increases faster than you can learn to use them and implement them.

Another time when using CAD software is inefficient is concepting.  This is the initial phase of design and it doesn’t replace a good artist or hand sketcher and a competent engineer. In concepting scale reviews aren’t important.  For example designing a car in CAD isn’t as good as building a model on the floor where several people can walk around it and look at it.  Way too many people have only one tool in their toolbox, CAD.  It replaces thinking for action and they can struggle all day drawing some image rather than going and getting a piece of wood and testing it.

What has your experience been?  Has CAD software improved your workplace?

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