Continental Design & Engineering Newsletter
Are You "Leaving Money on the Table" in Mexico?
kaizen Activity Leads to
47% Increase in Productivity
If you hold a winning hand in poker yet fold your cards due to someone's bluff, the players call it "leaving
money on the table", because you could have won the pot. In other words, had you played your cards right, the
ones you already had in your hand, all of the money in the pot would be yours.
Many manufacturers are
"leaving money on the table" by failing to implement Lean Manufacturing principles in low labor rate areas.
However, the really smart players utilize Lean to reduce their waste and maximize their profits.
A recent example: a large remanufacturing company relocated much of their operations to Mexico a few years ago.
Many other companies may have decided this activity alone provided enough cost savings for the decade and simply
rested on their laurels. But the senior management at this firm knew that implementing Lean principles in the Mexican
operation would provide even further cost savings and they weren't content to leave that "money on the table."
Continental Design & Engineering had been very instrumental in implementing Lean principles in the firm's
US operations, so were again called in to assist in the Mexico plant. The first task was to select a Change
Agent. The recently promoted Plant Manager was the obvious choice. The next task was to form Lean teams and
select a Sensei. The teams were easy, but it was obvious there was no qualified Sensei on
the staff. However, Dolores, a young, relatively inexperienced engineer, was willing to learn and also enjoyed the
respect of the teams. She stepped up to the plate and volunteered to become an apprentice Sensei. Randy Dunn, Continental's
Sensei, agreed to take her under his wing and train her as they proceeded with the kaizen
Five separate kaizen teams were formed for five different product lines. Each included the Production Supervisor,
the Quality Engineer, the Process or Tool Engineer, the Maintenance Supervisor and the apprentice Sensei, led by
Randy Dunn. Each kaizen activity would start on a Monday morning and be completed by the end of work on Friday.
With a break in the middle of the kaizen events, the entire process was scheduled to take six weeks.
On Monday the first team started off by studying the current state. The team observed the time it took each
operator to perform their job, which included both the machine time and the operator time. The team then calculated
the Takt time based on the requirements of the customer. The team graphed their findings as
From the graph, the team quickly realized that of the 23 operators, some were performing little or even zero
work while several were unduly burdened with more work than could be accomplished within the takt
time. They also knew from past experience that this line was not able to meet customer demands. Clearly some
change was needed.
Now the team really went to work; relocating equipment, rebalancing jobs and removing stockpiles of parts between
operators. The smaller equipment was easily relocated during the day shift. The off-shift hours were used to move
the heavier equipment so as not to disrupt current production. Day by day the area looked more and more like the
Lean Cell envisioned by the team.
Surprisingly, there was more resistance to removing the piles of stock between operators than there was to relocating
equipment. But by Thursday the operators were very comfortable with both the prearrangement and the one piece flow.
The chart below demonstrates clearly the results of their hard work.
The amazing part of this story is the fact that before the kaizen, 23 operators could not meet customer's demands.
After the kaizen, which involved only a handful of staff personnel and two engineers from Continental, 15 operators
could now make takt time and easily meet the customer's requirements.
Work in Process Inventory (WIP) went from 174 pieces to 21 pieces. With only 15 operators, that is very near
perfect one-piece flow.
The other kaizens occured in subsequent weeks and achieved similar results, which will be detailed in further
This company proved that the principles of Lean Manufacturing know no country borders. Waste is waste whether
in a high labor rate area or a low labor rate area. So the question one must ask is "Am I leaving money on
Contact Tom Epply, President and Director of Lean Manufacturing Engineer, by telephone or by filling in the email
form below -- or visit our Lean Manufacturing section to find out more
about how you can implement Lean in your plant.
How to Use Lean Manufacturing to
Dramatically Cut Waste and Increase Your Profits
Continental's Lean Manufacturing Implementation moves lean manufacturing from a business philosophy to a money-saving
In the global race to compete, Lean Manufacturing is the essential method of removing "fat" or waste
from the manufacturing process. Waste can be defined as ... Read
Change Agent: Someone who will lead the company from the traditional manufacturing mentality to becoming
a Lean organization. This person may come from within or outside the company.
kaizen: The Japanese word for continuous improvement to eliminate waste. As the name implies, with continuous
improvement you are never done; even the improvement can be improved.
Operator/Machine Balance Charts: A systemic method of measuring the work being done within the cycle
time of the operation. The work is then divided into:
- Value Added Time
- Incidental Work
- Waste (MUDA)
Then a conscious effort is made to eliminate the waste and reduce incidental work.
Sensei: The Japanese word for teacher. In acquiring Lean Knowledge the Sensei often is personally involved
with the student.
Takt: The German word for Pace or Rhythm. Used in Lean as the rhythm of the plant. I.E., if the customer
wants a part every 30 seconds, the plant (or the Lean Cell) should feel the heart beat of producing a part every
Takt Time: Total available production time divided by the customer & requirement.
Note: Include all planned activities such as cleanup, safety meetings, etc.
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