TXM

TXM E-News AUSTECH 2012 Special Edition

tim.mclean — Thu, 17 May 2012 05:40:25 +0000

Strong Interest in TXM Lean Manufacturing at Austech 2012

Creating a Culture of Continuous Improvement – Lessons from Elite Sport

Many companies that approach TXM tell us that they want to create a “culture of continuous improvement. Some people tell us that “Continuous Improvement” and Lean Manufacturing are two different things. So what is a “culture of continuous improvement”, what does it mean and how does it differ from Lean Manufacturing? The behaviour of elite sporting teams provides a good model of continuous improvement that can be adapted to manufacturing and other businesses. More….

Smart Capital Investment – Lean Thinking First – Chequebook Second!

In manufacturing, technology constantly changes. New technology usually offers the opportunity of increased efficiency and lower costs to the machinery we have today. However technology is expensive and increasing the fixed asset base of the business means that returns also have to increase. Businesses need to ensure that the cash provided to them by banks and shareholders is used in the most effective ways and generates returns that justify the risks taken by the investors. Unfortunately manufacturing does not have a great track record in achieving outstanding returns meaning that many businesses struggle to attract investment. more….

Lean Leadership: You Can’t Recruit Your Way to Success

One of the most important skills in business is the ability to attract and select good people. In fact, in my time as a manager I decided that the single most important decision I would ever make is whom I gave a job do. The importance of this decision may lead some to think that the answer to a business’ problems is simply to recruit the best people and actively manage out people who do not perform. Sadly in our experience, this approach is frequently a root cause of business failure rather than success. more…

The Missing Metric – Productivity

In many of the companies TXM has visited over past number of years, productivity measusre are very hard to find. When enquiring about productivity, we are more often presented with a profit and loss statement, rather than a true ratio of operational efficiency. more..

TXM News and Events

TXM Opens Offices in Sydney and Brisbane

Ron Spiteri Joins TXM

TXM is pleased to announce the recruitment of Ron Spiteri to the TXM team. Ron will support clients in New South Wales and Queensland, providing TXM will a permanent presence in both of these markets and signalling our arrival as a national business more…

TXM Learns Lean Manufacturing Perspectives On GMP and Pharmaceuticals at Beijing ISPE Conference

As a sign of TXM’s commitment to the pharmaceutical industry, three of the TXM team attended the International Society of Pharmaceutical Engineers (ISPE) China Conference in Beijing on April 16-17. Like all ISPE Conferences this one was well organized, well attended and had a very high quality content. more…

TXM Visual Planning Board Clocks Up Seven Years in Operation in China

Strong Interest in TXM Lean Manufacturing at Austech 2012

tim.mclean — Thu, 17 May 2012 05:34:25 +0000

The Austech 2012 and National Manufacturing Week 2012 Exhibition at the Sydney Olympic Park was another outstanding success for TXM. We got the chance to meet leaders from over 120 companies across Australia and New Zealand and learn about the challenges that they are facing in their operations today. As always there was a strong interest in the lean manufacturing solutions that TXM can offer manufacturers large and small in order to reduce lead time, increase productivity, improve plant layout and engage the operations team in continuous improvement. The overall feedback from the show was that times are very very tough for manufacturers in Australia at the moment with the high Australian dollar combining with tight credit and increasing costs, especially for energy. Implementing Lean Manufacturing offers a cost effective way to recover competitiveness without the capital costs, debt and risks involved in automation or other capital investment. Our mantra at Austech 2012 is make the most out of what you have already got. This seemed to ring true with many Austech visitors and the TXM team, especially our NSW and Queensland Consultant, Ron Spiteri, expect to be meeting with and working with many of them for the rest of 2012.

TXM would specially like to thank our valued customers, Sykes Racing, Rosebank Engineering, Branach Manufacturing and Hilton Manufacturing who contributed their company names, their stories and their videos to the case study video that featured on our stand throughout the show.

Another feature of TXM’s Austech 2012 was our active engagement on Twitter. TXM Managing Director, Tim McLean tweeted throughout the show making TXM one of the most followed stands at Austech. Follow @TXMLean on Twitter to hear more.

The TXM Team Talk Lean Manufacturing with Austech 2012 Visitors on our stand.

TXM E-News May 2012 – Continuous Improvement – Lean Capital Investment – Lean Leadership – Productivity

tim.mclean — Fri, 04 May 2012 00:23:24 +0000

Strong Interest in TXM Lean Manufacturing at Austech 2012

Creating a Culture of Continuous Improvement – Lessons from Elite Sport

Smart Capital Investment – Lean Thinking First – Chequebook Second!

Lean Leadership: You Can’t Recruit Your Way to Success

The Missing Metric – Productivity

TXM News and Events

TXM Opens Offices in Sydney and Brisbane

Ron Spiteri Joins TXM

TXM Lean Manufacturing to Feature at Austech 2012 – Stand C123

Leading Australian Lean Manufacturing and Project Management company TXM will demonstrate how lean manufacturing techniques can help Australian advanced manufacturers become more efficient during Austech 2012 in Sydney, stand C123 from May 8th to May 11th 2012. more..

TXM Learns Lean Manufacturing Perspectives On GMP and Pharmaceuticals at Beijing ISPE Conference

TXM Visual Planning Board Clocks Up Seven Years in Operation in China

Ron Spiteri Joins TXM

tim.mclean — Fri, 04 May 2012 00:08:59 +0000

Ron has had an outstanding career working with some of the worlds most respected companies, notably Boeing and United Technologies Corporation (UTC). In both businesses Ron was coached in lean by respected Japanese Toyota Sensei and as a result Ron has an excellent understanding of Lean Manufacturing. However, like the rest of the TXM team, Ron combines this lean knowledge with a wealth of practical business experience in manufacturing and industrial services. At Boeing, Ron held roles encompassing product design, customer support (in Boeing Seattle), project management and manufacturing. At Boeing, Ron ultimately led Boeing’s sophisticated composites manufacturing in Sydney and Melbourne. At UTC Fire and Security Ron lead the implementation of UTC’s globally recognised Achieving Competitive Excellence lean program across Chubb Fire and Security, driving a dramatic change in the culture of that organisation. Ron then moved back in to line management with Spectrum Fire, firstly as the New South Wales Service Manager and then the General Manager of the Queensland business, before deciding to pursue his passion for lean manufacturing and improvement by joining TXM.

Ron is already making an impact for TXM clients including Atco Structures and Logistics, Kimberley Clark Professional and Chep as well as bringing process excellence to outstanding medium sized manufacturers including McNaught and Hilton Manufacturing.

TXM Opens New Offices in Sydney and Brisbane

tim.mclean — Fri, 04 May 2012 00:05:34 +0000

After seven years as a Victorian based business, TXM has recently moved to expand its national presence establishing offices in Sydney and Brisbane. The business has for several years managed projects in these states out of Melbourne. However the establishment of offices signals our intention to expand our presence and increase our competitiveness by being able to provide high quality local resources to support these important markets. The local presence has already been received positively in these markets with customers and industry representatives we have spoken to welcoming the arrival of a lean consulting company in Sydney and Brisbane with an outstanding record for delivering lasting results, like TXM.

TXM now has office in Melbourne, Sydney and Brisbane in Australia and Shanghai in China. We also have a Senior Consultant located in Christchurch, New Zealand. We have successfully delivered projects across Australia, New Zealand, China, Singapore, Malaysia and Thailand. To contact us in our new locations:

Australia

Head Office (Melbourne)

211/134 Cambridge Street, Collingwood, VIC 3066, Australia

P: +61 3 96078241
F: +61 3 9419 2572
E: info@txm.com.au

Sydney

Level 9, Avaya House
123 Epping Road, North Ryde, NSW, 2113

P: +61 2 8985 7393

Brisbane

L27, Santos Place
32 Turbot Street, Brisbane, Queensland, 4000

P: +61 7 3181 5684

TXM Visual Planning Board Clocks Up Seven Years in Operation in China

tim.mclean — Thu, 03 May 2012 23:28:03 +0000

TXM Visual Planning Board when it was first Established at Funwick in 2005

TXM Managing Director, Tim McLean, returned to the location of his first ever lean consulting project at Funwick Manufacturing’s Fire Extinguisher manufacturing plant in KunShan, China last month. Over the seven years since Tim first worked with Funwick, the business has seen many changes of personnel and equipment and had relocated to a new site. However Tim was pleased to see that key elements of the lean planning systems that he established with the Funwick team in 2005 were still in place and providing benefits to the business. In particular the visual planning board that Tim helped Funwick to establish was still in active daily use along with a kitting process for raw materials for assembly. On the latest visit Tim was able to introduce TXM Senior Consultant, Justin Tao, who further improved the planning and kitting process and introduced a higher degree of lean rigour. Justin also helped Funwick establish kanban systems for key internally manufactured plastic mouldings.

Over the seven years, Tim was pleased to see that Funwick had developed in to a sophisticated manufacturing operation supplying high quality products to global companies including United Technologies and Cummins. Funwick’s processes and commitment to quality now put in the top tier of Chinese manufacturers.

The Funwick team study the visual planning board during the TXM Kaizen Event in April 2012

ISPE Conference in Beijing Shows the Way for Lean Manufacturing in Pharmaceuticals

tim.mclean — Wed, 02 May 2012 09:55:10 +0000

Strict GMP gowning requirements can make shop floor kaizen challenging, but the discipline of GMP controls support Standard Work.

The major focus for pharmaceutical manufacturers in China right now, particularly Chinese companies, is GMP compliance. GMP standards in China are quickly catching up with global best practice and many presenters talked about the challenges of implementing GMP in China. Many would think that GMP rules, with their requirements for product isolation, gowning rules and inspection are inconsistent and hard to reconcile with lean manufacturing approaches. Our view is that the opposite is the case and that clashes between the requirements of lean manufacturing and GMP rarely occur. Andreas Bahne from Boehringer-Ingelheim reinforced the synergies between lean manufacturing and GMP in his presentation. Andreas has lead the Boehringer-Ingelheim team who have applied lean principles right from the start of the design process in their new packaging facility at their Pudong, Shanghai plant. Specifically Andreas compared lean and GMP Objectives. Lean manufacturing aims to eliminate non-value adding activities, while GMP applies controls to ensure the delivery of safe medicines. Both share an overarching goal of controlling the manufacturing environment. Lean tool such as standard work, 5s, simplified flow and PDCA problem solving support both the elimination of waste and the elimination of risk and therefore enhances lean. In fact Andreas pointed to specific clauses in the GMP rules that encourage lean manufacturing approaches.

One of the international keynote speakers, Lars Bang from Lundberg Pharmaceuticals told a great story about how lean manufacturing has transferred Lundberg. Lars explained how the lean manufacturing program matured over three years and three phases. Initially Lundberg looked to tools to transform processes. It was then necessary to fully engage leaders in applying lean approaches and demonstrating lean behaviours. Finally Lundberg have focused on engaging all employees. Employees now generate at least 30 ideas per year and are empowered to implement many of their own ideas. As a result Lundberg have almost doubled productivity across the business and cut the cost of good sold from 25% to 20% allowing the business in invest the savings in R&D to develop new medicines.

In some ways the most interesting lean presentation at the conference was not badged as “lean manufacturing” at all. Gordon Muirhead, Technical Director for Glaxo Smith Kline explained GSK’s development of continuous manufacturing of pharmaceuticals. This is effectively going from batch to one piece flow production where product is manufactured in small 1kg “plugs” that flow in a continuous stream through dispensing, granulation, drying, blending and compression. Control of this process is highly complex and GSK have formed a partnership with the McLaren Formula One team to share knowledge about he processing of data. As Gordon told me, in manufacturing we are happy if we process production data and act on it in a day – in Formula One they need to analyse car performance data and take action by the next lap of the track! The result of this continous approach is a dramatic reduction in plant footprint and large increases in productivity and reductions in waste. From a lean manufacturing perspective, it challenges the notion that ‘one piece flow” is not possible in traditional batch process manufacturing.

We are looking forward to the next ISPE Conference and continuing to promote lean manufacturing in this vital and growing industry in China and the Asian region.

Learn what Formula One Can Teach us About Continuous Improvement

TXM presents about Lean for a GMP Environment in China

Creating a Culture of Continuous Improvement – Lessons from Elite Sport

tim.mclean — Wed, 02 May 2012 08:54:42 +0000

By Tim McLean, TXM Managing Director

McKinsey Consultant, Marvin Bower one described culture as “The way we do things around here”. Therefore a continuous improvement culture is one where continuous improvement is “the way we do things around here”. This means that is a mindset rather than a set of tools or a methodology.

Red Bull are World F1 Champions but look to continously improve performance every year, every race, every lap

I believe the best examples of continuous improvement culture are to be found in elite sport. Formula one motor racing is a great example of this. The best teams such as Red Bull or McLaren do not win every race, but they learn from every race and are systematic and rigorous in applying those learnings to ensure that they perform better in the next race. They also never stop improving. Even when they are world champions, their cars are the fastest, their pit crews the slickest and their drivers the best, they still analyse every aspect of every performance to find an extra edge of performance so they

can stay in front. They do this based on data, not gut feel and apply scientific method to ensure that they check that changes lead to the desired improvements and then lock in the successful changes in to their designs and methods. This process of improvement is not just the job of the Chief Engineer, but instead is the role of every single individual on the team from the drivers to the pit crewmmembers.

This culture of improving every aspect of performance every day is not unique to motorsport. To quote, John Buchanan, the coach of Australia’s most successful cricket team:

“They are the perfect team because they do want to improve every day,

so it doesn’t matter who comes in….Its a culture within the group

so they’ll improve, they’ll always get better”

Therefore we can learn from sport several elements of what makes up a continuous improvement culture:

A relentless focus on improvement in every aspect of the enterprise.
A determination to keep getting better even when you are already the best.
A willingness to learn from every performance good or bad.
The use of scientific method to solve problems, known in lean manufacturing terms as the “Plan Do Check Act” approach.
The involvement of every team member in solving problems and continuously improving their own and the teams performance.
The improvement culture transcends individual team members or leaders and is simply part of the way the team always approaches things, ie. it is part of the culture of the team or organisation.

So what about lean manufacturing? Lean manufacturing is system of management based on the Toyota Production System. It is a means of achieving a continuous improvement culture. In fact achieving such a culture in the organisation is THE objective of lean manufacturing. In our experience companies only sustain and grow the success of their lean manufacturing production system when they get in to the habit of always striving to improve the system. Lean manufacturing will teach you how to find and eliminate waste in your process, how to create flow, how to see and solve problems. Lean leads to a culture of continuous improvement when the organisation then looks to further improve the gains they have made, when the future state value stream map becomes the new current state map, and when the best set up time or OEE you have achieved becomes the new baseline for improvement.

In summary, a culture of continuous improvement is one where an organisation looks to improve every aspect of its performance every day at every level. Lean Manufacturing is a system of management, which is highly effective in developing this culture of continuous improvement.

Smart Capital Investment – Lean Thinking First – Chequebook Second!

tim.mclean — Tue, 24 Apr 2012 03:59:04 +0000

By Tim McLean, TXM Managing Director

In manufacturing, technology constantly changes. New technology usually offers the opportunity of increased efficiency and lower costs to the machinery we have today. It is often breathtaking to tour trade shows such as the Austech Show about to open in Sydney or the Shanghai Machine Tool show and see the capabilities of the machinery now on offer.

Robots have revolutionised some manufacturing processes such as body welding, however they are complex, capital intensive and can reduce flexibility – approach with care!

However technology is expensive and increasing the fixed asset base of the business means that returns also have to increase. Businesses need to ensure that the cash provided to them by banks and shareholders is used in the most effective ways and generates returns that justify the risks taken by the investors. Unfortunately manufacturing does not have a great track record in achieving outstanding returns meaning that many businesses struggle to attract investment. On the other hand, a failure to invest in new capital has lead to the decline of businesses when the technology used has become too old and uncompetitive and the cost of replacing it too hard to justify. Careful decision making about capital investment is therefore critical to ensure the long-term prosperity of the business.

Don’t Substitute Money for Brains!

Another way of saying this is “don’t substitute money for brains”. Often automation is seen as the easiest and most effective way to reduce costs. However before ordering the robots, consider some detailed analysis of the current process. Use standard work analysis to highlight areas of waste and look for low cost alternatives to expensive automation such as improved layout, jigs and fixtures and eliminating tasks all together. If you still consider automation necessarily consider the level of automation. Enabling machines to automatically eject a completed part is often cheap and will avoid the need for the operator having to wait for the machine cycle to complete. Automatic loading of the next part is usually more complex and expensive (depending on the process), but can then allow the machine to continue one or more cycles while the operator completes other tasks. Automation to transfer the completed part to the next process is usually very complex and expensive and should be the last option considered.

Consider also the risks of automation. No machine is perfectly reliable and you should anticipate that the automated machine would have some downtime. I once observed a pump assembly line where a robot was used for packing at the end of the line. During my visit the robot malfunctioned leading to 10 assembly workers upstream of the robot having to wait while it was repaired. Consider these costs before pursuing automation.

Consider the Whole Value Stream and avoid “Monuments”

In many businesses a simple equation is applied when calculating the cost justification of investment. It goes like this: “if I double the machine speed and halve the number of operators I will make a labour saving of 75%”. That is usually true – for that machine. However the saving only reaches the bottom line if it applies across the whole business. Often the new fast machine becomes what we call in lean manufacturing terms a monument. The fast machine typically produces large quantities of product at high-speed. Efforts are then focused upstream to feed the new machine and then this typically leads to overproduction downstream. Batch sizes are usually increased in the name of “efficiency”. As a result downstream and upstream processes are forced to run less efficiently. High levels of work in progress are generated leading to considerable movement and transportation waste and the “monument” has to frequently stop to allow other processes to catch up. Therefore, when considering new equipment consider the impact on the whole value stream, not just a single process, and make sure that you aim to level the rate of production to customer demand (takt time) rather than focusing on maximising the output of the “monument”.

Make sure that the Equipment you choose Matches your Market – Biggest is not Always Best

Following on from the point about matching output to takt time above, it is important that the equipment you select matches the real current and future needs of your market. Again the typical cost vs. output equation may lead you to select the biggest the fastest and the most automated machine, but this machine is often the least flexible. To achieve the required cost savings may require big batches when the market trend may be towards shorter runs. The result will be greater inventory, reduced efficiency or both. Often two or three smaller, more flexible machines may provide a more agile and flexible result with lower capital cost and perhaps a slight increase in production cost. For example in injection moulding, the temptation is to go for large machines with higher cavitation (more parts per shot), however this greatly increases tooling and machine cost, increases the complexity and unreliability of tools, leads to large batch sizes and increased inventory. A series of smaller machines with smaller dies can often provide a simpler, cheaper, more flexible and more reliable alternative. Cost savings from the bigger machine are also often illusory since the same number of employees continues to be employed or labour savings get offset by increased maintenance and working capital costs.

Remember once you get the big machine you are stuck with it. Usually smaller, simpler machines are much easier and cheaper to adapt to new products or new uses or to move to new locations.

The Case for Maintenance Capital

So far I have argued in in favour of moderating capital investment, however it is important that businesses do invest in new capital. One of the key reasons that European manufacturers have maintained their competitiveness is their willingness to continue to update their technology. This investment should focus first on renewing the assets that create value for the customer rather than on adding labour saving automation to old machines. Investment in new machines that enable you to produce better quality, a better range of products and greater flexibility will support the growth of your business. In our experience, privately run manufacturers understand the need to renew key technologies, while larger corporates in English speaking markets such as Australia often tend to focus on labour saving automation as this will give the short term profit benefit. A good rule is to maintain capital investment at the rate of asset depreciation. This has the effect of maintaining your fixed asset base at the same level, while ensuring that assets are renewed within their expected life. Businesses that rely on the gradual depreciation of their fixed assets in order to achieve improvements in return on assets will not have a long-term future. Eventually their aging assets will make them uncompetitive and they will either need major reinvestment or (more likely) close.

Finally, the assumption in this final paragraph is that you will replace your old machines with new machines. In the words of the Finance Director of the German chemical company where I started my career, “Second hand equipment is only slightly more expensive than new equipment” [when you consider the whole life cycle]

Lean Leadership: You Can’t Recruit Your Way to Success

tim.mclean — Thu, 19 Apr 2012 13:44:43 +0000

By Tim McLean – TXM Managing Director

Coaching Managers and Supervisors to Regularly Communicate with their teams is a key tool for solving problems and developing leaders.

In any business the quality of its leaders will vary. This will depend on innate ability, but also on management perceptions (which can often be self fulfilling), the level of training and support provided, the design of the role itself and transitory factors such as personal issues and short-term business issues. By definition the average business leader will be of average ability. This is simple statistics. No business sets out to recruit below average leaders, and few are successful at always finding the “upper quartile”. Therefore chances are that the team of managers you have are “average”. Importantly, it is equally likely that person you recruit after you fire your last “average” manager will also be “average”.

However by firing one leader and recruiting another you expose your business to considerable cost and risk. Firstly, the recruitment process will typically take three months and a further three to six months is usually required before the new manager is fully established and able to start driving the improvement of the business. It is likely too that the new manager will shift the focus of his area of responsibility, meaning that the previous manager’s initiatives and improvements will be lost or fail to reach fruition, regardless of whether they would have been ultimately beneficial to the business. We very frequently see this with lean manufacturing initiatives in large corporations which often fall down after a change of leadership, leading to the “unlearning” of many of the improvements previously made and cynicism and apathy among team members. This is why W. Edwards Deming highlighted management mobility as one of his “Seven Deadly Diseases”. Finally, even with the most rigorous selection processes, there is a high risk that the new leaders will not be more effective than the previous one.

So what is the alternative? If business performance is not satisfactory then surely this is the responsibility of the manager? There is no argument is that the performance of a department or business should be the responsibility of the leader, however the manager is usually not the root cause of the problem. Lean Leadership approaches would suggest that the causes are usually deeper than that. In the words of one Toyota executive,

“We get brilliant results from average people operating and improving brilliant processes. Our competitors get mediocre results from brilliant people working around broken processes. Then, when they fail, they hire even more brilliant people [and still get worse results].”

Businesses should therefore strive continuously for process excellence. This includes processes for developing people. The best source of leaders for your business should be your own company since existing employees will best understand your technology, your customers, your people and your culture. Therefore focus must be given to developing existing staff by providing them with training, new projects, new challenges and constant feedback (not just the annual performance review – another of Deming’s “Diseases”).

But what if things go wrong? There is no doubt action needs to be taken when performance slips. However that action needs to be to first ask “Why?”, not “Who”. The business should use problem solving techniques to find and address the root causes of problem to learn from its mistakes and use the mistakes as an opportunity to improve processes and prevent re-occurrence. This is how above trend performance is achieved and sustained.

There will be occasions when we do have the wrong person in a leadership role and need to move them on. These are the individuals who do not learn from their experience, who do not develop their people and who consistently fail to apply rigour in finding and addressing the root causes of problems and poor performance. We should try help these individual to develop the skills of a problem solver, but sometimes individuals are unable or unwilling to learn. These individuals are not suitable for leadership roles, and should be moved on. Even if short term business performance is good, the manager who does not want to learn and does not develop his or her people will be a threat to the future performance of your business.

Unfortunately too often with our focus on short term results and business outcomes rather than process, individuals get promoted for making decisions quickly, for responding to short term issues, by restructuring, reorganising, outsourcing, divesting and acquiring and hiring and firing. This kind of action is mistakenly regarded as leadership and is seen to be more effective than the slow and painstaking tasks of solving problems using scientific method and developing people. To quote another Toyota specialist:

The Japanese used to describe Toyota as a bunch of farmers in their factory out in the country, doing what farmers do: plowing a straight furrow, mending the fence, fixing their own tools, milking the cows every day, and obsessing about the weather.

Like farmers, in business we reap what we sow!