Applying Lean Principles in Process Industries

“Lean” has assailed our vocabulary the same way that it has attacked waste within a plant or process. From “lean thinking” to “lean enterprise” and “lean manufacturing,” the word has created many catchphrases. But what does it mean to be “lean”? It entails shedding waste in order to reduce costs and increase competitiveness.  

The two most popular process improvement methodologies in use today, lean manufacturing and Six Sigma, originated at Toyota and Motorola, respectively. These pioneering companies are discrete manufacturers.

Not surprisingly, the subsequent evolution and development of these two methodologies has focused mostly on improvements in discrete manufacturing. Each methodology has a central focus that has been the basis for its structure and tools.

For lean, it’s the delivery of value to the customer through the elimination of waste – anything that is non-value added from the customer’s perspective. For Six Sigma, the central focus is the elimination of defects – products or services that do not conform to the customer’s specifications.

How do these concepts apply to process manufacturing considering its differences with discrete manufacturing?

Process manufacturing is fundamentally different from discrete manufacturing in the way material flows. Material flows in a continuous stream in process manufacturing, while parts move in discrete batches in discrete.

Since there has been so much work done in developing these methodologies in discrete manufacturing and very little in process, it might seem logical to apply them “as-is” to process-manufacturing industries.

However, this approach is like trying to fit square pegs into round holes. The better approach is to adapt these techniques within a process improvement framework that identifies the various forms of waste in the process-manufacturing value stream, and manages the wastes with the appropriate concepts and tools.

Lean manufacturing defines seven types of waste that make a production system inefficient and costly. These are:

• Over-production: Producing too much, too soon.

• Inventory: Extra production required to buffer process variability.

• Transportation: Movement of materials without adding value.

• Waiting: Increasing production cycle time without adding value.

• Movement: Movement of operators without adding value.

• Defects: Product that does not conform to customer specifications.

• Over-processing: Processing a material more than is necessary to meet customer specifications.

The first three types of wastes above relate to a lack of material flow. By the very nature of process manufacturing, material flows in a continuous stream from one process to the next, without periods of stopping and waiting in between (the possible exceptions being some batch processing in the chemical and steel industries).

Therefore, the lean ideal of flow occurs by default. As a result, over-production, inventory and transport are either non-issues or only minor issues in process manufacturing. Movement waste is also less relevant to process manufacturing because operators typically monitor automated equipment. Their movement usually does not have an adverse impact on the ability of the equipment to continue processing the material.

However the three types of waste – waiting, defects and over-processing – do exist in process manufacturing and are fertile ground for the application of lean and Six Sigma methodologies. For instance, product changeovers, which in process manufacturing can sometimes take 18 hours or more, are an example of waiting waste.

Defects are the result of production of material that does not meet the specifications of the downstream internal/external customer. Over-processing occurs when the material is processed to a greater extent than is required by the downstream customer. All of these add to costs and can be reduced and/or eliminated through the use of these methodologies.

In the perfect value stream, products are produced reliably, efficiently, with good quality, and in sufficient quantity at the individual process level and throughout the entire value stream. A suboptimal condition with respect to any of these characteristics constitutes a type of waste.

Since no production value stream is perfect, all real-world process-manufacturing value streams will contain one or more of these wastes. These are targets of opportunity for any process-improvement effort.

The root causes of these wastes may be identified by means of fishbone (Ishikawa) diagrams (Figure 1). They can be used as “straw models” to identify the root causes of wastes in your specific value stream and then the appropriate methodology/tool can be applied to address it.

Figure 1

While the causes of process manufacturing waste vary, a few occur regularly:

• Equipment condition
• Suboptimal operation
• Design and technology
• Availability due to changeover and setup time.

Equipment condition refers to machines that are not properly maintained. Equipment in poor mechanical condition has poor availability, produces poor-quality product in inadequate quantities, and operates inefficiently. In short, they operate wastefully.

A maintenance kaizen event is the appropriate process-improvement tool to return the machine to an optimum mechanical condition. To sustain the improvement, a long-term maintenance program such as Asset Health Care (AHC) or Total Productive Maintenance (TPM) must be installed.

Suboptimal operation is a second major cause of waste. Typically, process manufacturing involves a combination of physical parameters. These could be a combination of temperature, pressure, density, flow rate, moisture level and chemical concentration that are set at the machine to process the material. If these settings are suboptimal, then the process operates sub-optimally in terms of throughput, quality, and efficiency. These types of optimization problems are ideally solved using the Six Sigma methodology and tool set.

Design and technology are two other major causes of waste. In brownfield plants that have been in operation for many years, it’s not uncommon to find equipment that is obsolete with regard to both design and technology. Such equipment can operate wastefully in terms of availability, quality, throughput and efficiency, much like those in poor mechanical condition. Improving/upgrading equipment design/technology is an engineering problem requiring technical analysis and designed experimentation.

Availability can also be adversely affected by product changeovers and by long setup times after a process has been taken down for maintenance. In this case, quick changeover techniques such as single-minute exchange of dies (SMED) may be applied to reduce setup times and improve availability.

There is, however, a word of caution before applying these methodologies and tools. In many companies, becoming lean seems to be primarily concerned with implementing tools such as “one-piece flow”, “value stream mapping”, “standardized work” or “kaizen events”, but the expected results have not always followed.

By contrast, Toyota has stayed focused on its principles and not the tools. At most Toyota plants, there are no dedicated change agents or black belts. Value stream maps are rare and only used in problem areas.

There are no value stream managers and only small portions of the plants contain actual standardized work charts and many of the daily tracking systems are highly computerized. For the last 50 years, “TPS at Toyota has been primarily concerned with making a profit, and satisfying the customer with the highest possible quality at the lowest cost in the shortest lead-time, while developing the talents and skills of its workforce through rigorous improvement routines and problem solving disciplines.”

This stated aim is mixed in with the twin production principles of just-in-time and jidoka (build in quality at the process).This emphasis on process improvement to obtain results rather than the implementation of tools is the main reason why Toyota has continued to see success on so many dimensions, where others struggle.

Nonetheless, the use of lean, Six Sigma and also Theory of Constraint tools in the right context can be very useful in process industries for improving, throughput, costs and customer service. The proper approach is to adapt the tools to the process after due consideration of the situation at hand.

In other words, focus on the advice of Takashi Ohno, the founder of the TPS methodology at Toyota: “Ask what the greatest point of need for improvement is and start from there.” 

Read more on lean manufacturing best practices:

Eight Easy Steps to Creating a Pareto Chart

How to Reduce Manufacturing Waste

Lean Manufacturing: Guidelines for Success

About the author:

Herb Lichtenberg is the senior vice president practice director for Strategic Asset Management Inc. Senior VP Practice Director. For more information, call 860-675-0439 or visit www.samicorp.com.