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(+)+(+) S.M.I.L.E(sm)
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(+)+(+) Setup Minimization Improves Line Efficiency
(+)+(+)
(+)+(+) The Quick Changeover e-letter
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(+)+(+) Published monthly by Changeover.com
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(+)+(+) Written by John R Henry, CPP
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### OCTOBER 2003
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SOME THOUGHTS ON...
"QUICK CHANGEOVER: AT THE INTERSECTION OF MASS AND LEAN"

As I mentioned in previous newsletters, last week I presented at PackExpo
in Las Vegas. My presentation was titled "Quick Changeover: At the
Intersection of Mass and Lean" for those who are interested, the slideshow
is available at www.changeover.com/mass.ppt

One of the best books I have ever read on manufacturing management is
"Today and Tomorrow" by Henry Ford (1923, available from
www.productivityinc.com) Ford believed that changing over to make different
products or even different components was wasteful and he was right. He
designed the Model T as the only model that Ford Motors produced. All
components were manufactured on dedicated machinery. In other words, he
never did a changeover. While he took it to an extreme, he was hardly the
only one to do this.

Coca-Cola, for much of it's history or until 1965 or so was available only
in a single flavor in a 6oz glass bottle. Sneakers, or what we today call
athletic shoes, were available in very few styles. There was generally a
limited variety with most products being manufactured on the philosophy
that one size should fit all.

So what has happened today? Coca-Cola is available in a wide variety of
flavors (Classic, New, Diet, Lemon, Vanilla and so on) and sizes. In total,
there are more than 120 variations according to one Coke executive I talked
to. "Sneakers" come in so many variations that they tend to have
specialized stores stocking literally hundreds of different shoes. Nike has
taken it to the extreme and if you visit their website, you can order
custom made shoes with colors, sizes and 6-8 other design features that the
customer can select.

In short, the customer has become a customizer with the ability to demand
products made to their specifications. This trend is called "Mass
Customization" and is defined as the mass production of customized products.

Why do manufacturers engage in mass customization? There is really only one
reason and that is that customers demand it. Not only do customers demand
it but there are also other alternatives available that allow them to have
it their way. If Coke does not satisfy the demand for a caffeine-free diet
cola, Pepsi will. A related factor is Wal-Mart. Wal-Mart is a monster at
finding out what their customers want. They then take this information to
their suppliers and demand products that will satisfy their customers.
Wal-Mart is not the only one doing this, of course, they are just the
biggest and most successful at it.

As customers, it is a great thing since we no longer have to settle for
something that is not exactly what we want. As manufacturers it is a
terrible thing since it means either many short production runs of a
variety of products or, long production runs but with high inventory
levels. In short, mass customization is diametrically opposed to the other
initiative driving manufacturing today, "Lean Manufacturing". Lean
Manufacturing is defined as the elimination of all waste, including wasted
time, from the manufacturing process. Changeover, caused, or aggravated by
mass customization, is often major source of waste.

So what is today's manufacturer to do? They are caught between the
conflicting demands to be more lean (from upper management) while, at the
same time, producing a greater variety of products. The only way to resolve
this conflict is to reduce changeover time. It is only by reducing the
downtime between products that overall costs can be reduced while
simultaneously increasing the number of products produced. If it were
somehow possible to reduce changeover time to zero, manufacturers could
efficiently produce products in lot sizes of one. An economic lot size of
one would allow for almost perfect customization.

Changeover time reduction, where it has been considered at all, has tended
to be a tactical issue implemented at the line level to reduce operating
costs. This is no longer enough. Changeover must be viewed as a strategic
issue essential to a company's long term competitiveness or even survival.
Viewing changeover as a strategic issue requires a change in thinking in
several areas. Perhaps it is not correct to say that it requires a change
in thinking. Perhaps it would be more correct to say that it requires
thinking. Too often, changeover has been ignored.

Readers of this newsletter will know that I have always said that
changeover requires companywide involvement.

Top Management support is essential for a couple reasons. They are the ones
who set the goals and policies for any company. Employees then do their
jobs to help the company meet the goals. If management does not support the
program, there is no way it can succeed. Support is not limited to a
directive to "Reduce changeover time". It must include making the necessary
resources available, including training, as well as keeping an ongoing eye
on events and recognizing achievements. It's like a chicken roaster where
you can "set it and forget it".

Product designers must be sure that products are designed to be compatible
with quick changeover. One client has 2 glass vials, 5 & 10cc. Instead of
the product designers selecting vials of the same diameter but different
heights, they selected a 10ml vial that is very slightly larger OD than the
5ml. Instead of a 5 minute height change between sizes, this company faces
a 1 hour full changeover. Another company packages about 700 SKU's of a
similar consumer product on a card. Instead of all cards being the same
size, a number of them are about 1/8" longer than the rest. A product
changeover which should involve simply replacing cards in a magazine
requires 10-15 minutes to adjust the machine for the different size.

Personnel training must take place. It is no longer enough to simply let
the mechanics and operators do changeover as they think best. First of all,
they need to be trained as to why changeover downtime is a problem and why
it is to their personal benefit to reduce it. Second, optimized changeover
procedures and processes must be developed and the personnel trained in how
to do them. Hint: If they take part in developing the procedures,
compliance will be much easier.

Manufacturing equipment is purchased for a lot of different reasons
including speed, flexibility, cost or other factors. The time it takes to
change the machine over is often way down the list if it is considered at
all. With changeover downtime typically in the $10-20,000/hr range,
spending a bit more upfront to minimize changeover will give rapid
paybacks. The people who purchase machinery must be aware of this and must
take it into account in their decision making process.

The above is not all that has to be done, there is much more. I've written
tens of thousands of words on various aspects of changeover as have others.
Reducing changeover time is not an easy process. It is a necessary process
if a company is to be able to simultaneously increase efficiency and reduce
costs while supplying the customized products that their customer is
demanding.

TIP OF THE MONTH...
LASER LEVELS

Occasionally it will be necessary to align different parts of a machine or
even different machines. I once found this to be a necessary part of
changeover on a large format cartoning machine. Rather than doing this by
eye or with a ruler or string, consider a laser alignment tool. These are
readily available at Leowes, Home Depot or other stores for under $100.
They can be mounted in a cradle in a known position and project a laser
beam to which the downstream component is aligned.


Best,

John R Henry CPP