lean manufacturing 1-11-17

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MAKE AMERICA GREAT AGAIN

MANUFACTURESCAN

ManufacturingCompe66venessIni6a6ve

TAXINCENTIVESALONEWILLNOTCREATESUSTAINABLEU.S.JOBS

•  HighU.S.laborwagedisparityistheimpedimenttosustainabledomes6cjobsgrowthandeconomicexpansion

•  U.S.PRODUCTIVITYmustdrama6callyincreasetooffsetlaborcostdisparityandlevelthecostofgoodsplayingfield

•  Only2%ofU.S.companieshavedoubledtheirproduc6vitywithLEANManufacturing,whichreducedtheirlaborcostby>50%

•  Whiletheremaining98%ofU.S.manufacturer’swagesaretoohightocompeteworld-wide

•  A\erthetaxcreditwindfallcreatestheincen6vetomaintain,growandreturnmanufacturingjobstotheU.S.;produc6vitymustincreasedrama6callytopermanentlysecurethereturnofjobsandgrowtheU.S.economythroughcompe66vecostofgoods

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BOBCHAPMANCEOOFBARRY-WEHMILLER

BobChapman’spresenta6onattheAmericanAssocia6onofManufacturingExcellenceonPeopleCentricLeadershipwhereheexplainswhyonly2%ofU.S.manufacturershavereducedtheirlaborcostby>50%(8min.of36min.)Barry-Wehmiller’srevenueis$2.4billionwithatrackrecordof15%compoundannualgrowthinrevenueandsharevalueandsofarhasacquired70companiesacrosstheglobe

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TYPICALBENEFITSOFLEANfortheTOP2%

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“WorkingSmarterandNotHarder”•  Produc6vity Up100%orGreater•  FinishedGoodInventory Down50%to95%•  InventoryTurns Doubleto3X+•  Work-In-Process(WIP) Down80%•  ManufacturingLead-Time Down50%to85%•  FloorSpace Down30%-90%•  Quality Qualityisbuiltintoprocess i.e.3to6-Sigmaquality

defects<.3%to.0003%

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THE2%LEANMANUFACTURERSHAVE•  IncreasedtheirNet-Profit~215%•  Reducedtheirlaborcost>50%,whichreducedtheirCostof

ManufacturedGoodsby7.5%•  Andtheircostis15%-18%lessthantheircompe6torsthat

outsourcedmanufacturingtoChinaorMexico Labor,5%

Overhead,24%

ProductCost,71%

TeamEmpowermentandInternalQAChecks

Savings=7%LeanLaborSavings50%50%x5%=2.5%Savings

LeanReducesInv.67%Saving6%CarryingCost

Shi\QAtoSuppliersandRequiretheyImplementLean&SplitSavings50%


THEFACTSONOUTSOURCINGTOCHINA?2004LaborCostStudyforOutsourcingMilwaukee’sDrill•  Milwaukee’sUSlaborcostis$31.34vs.China’squoteof$17.10.i.e.a

perceivedsavingsof$14.24perunit(45.4%)•  “CostAdders”reduceChina’ssavingsby24%to$10.82(34.5%)•  IfMilwaukeeimplementedLEANattheirUSplantthesavingsis$15.67(50%)


WHATISDIFFERENTABOUTTHESE2%LEANMANUFACTURERS?Only2%ofAmericanmanufacturershaveimplementedLEANwith>50%savingsTheyaretotallycommiredtoLEAN;soitispartoftheircompanycultureAndequallyasimportant,theyarecommiredtothesuccessoftheiremployeeswithtraining,advancement,selec6ngthejobstheywant,andcompensa6onforimprovedquality,produc6vityandmee6ngthecustomer’sneed.Theyare‘employeecentric&customeris#1’.Theseemployeesenjoytheirjobs,theyareproudoftheirproductsandservices,turnoveris<1%,andtheyarecommiredtothesuccessoftheircompany1/20/17 7FederalManufacturingCompe66veness

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MANAGEMENTSTRUCTURES

Typical–98% LEAN–2%

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CUSTOMERIS#1WITHLEANFlatorganiza6onstructureQuickresponse

CEOVPs

Sr.Mgmt.

Supervisors

Employees

Customers

Customers

Employees

Mgm’t

CEO

Nomorethan3layerstostayclosetocustomer

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76%OFU.S.EMPLOYEESDISLIKETHEIRJOBS

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Reasons:1.  Co-workers2.  Workassignment3.  Supervisor4.  Lackofapprecia6on

24%

76%

LikeJob

DislikeJob

Whiletheemployeesatthe2%LEANcompaniesliketheirjobs,becausethecompaniesare“employeecentric”andthey“empower”theiremployeeswithoutsupervision

WHYMOSTMANUFACTURERSAREINEFFICIENTWhenyouaskwhytheyhaven’tchanged,theytellyou“becausethisishowwehavealwaysdoneit”ManycompanyleadersaregenerallynotawareofthebenefitsofLEAN,orunwillingtomakethecommitmentimplementLEAN;orlookfortheeasiestwaytoincreaseprofit61%ofU.S.manufacturershavearemptedtoimplementLEANontheirownwithnoassistancewhichresultedinmodestanddisappoin6ngresultsHenryFordandJackWelchofGEwerewereobsessedwithelimina6ngwasteandimprovingtheirproduc6vityandquality

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LEANREQUIRESACERTIFIEDCOACHLeanbythebookdoesnotwork!ThereareexcellentbooksonLean,andyouwilllearnalotfromthemincludingthechallengesofLean.However,casestudiesareonlyexamplestolearnthebasics,i.e.aLeanprimer;buttheydonotprovidetheprocessingengineeringdocumenta6onofhowitwasachieved.AndeverysuccessfulLeanprojectisunique.Youstartwithacleansheetofpaperanddesigntheprocessesfromthegroundupbasedonthelaborcontent,processsequences,inventoryrequirements,dailyproductvolume,andforecastedgrowth.Tosucceedyouhavetohaveacer6fiedcoachwithprovenperformance,thatknowswhatworksandwhatdoesn’t


LEANPHASESI.   “Kaikaku”orradicalLEANofproduc6onprocessisthefirstphase

ofLean.TypicallyKaikakudoublesproduc6vitywith>50%laborsavings.

II.   “Kaizen”orcon6nuousimprovementisthe2ndphaseofLEAN.Itshi\stheresponsibilityofelimina6ngwastefrommanagementandprocessengineeringtotheteammembers;thusgenera6ngongoingimprovementsofLEAN

LEANsuccessisdirectlylinkedtoaCEO’slevelofinvolvement,commitment,andup-frontleadershipoftheproject.TheCEOhastobeachonable,accountable,responsible,andinvested.


LEANEXPERIENCE&PERFORMANCECombined Experience: Over 73 years of LEAN training and implementation at 189 manufacturing and service companies with average labor cost savings of 70%

Certifications: Teach and implement Demand Flow Technology “LEAN” by the John Costanza Institute of Technology (Hewlett-Packard legacy, Master Black Belt Lean Six-Sigma, Data Science, ISO Certification, Supply Chain Management, and Overall Equipment Effectiveness


TAXINCENTIVESPLUSLEANWILLINCREASEU.S.JOBS&GROWTHEU.S.ECONOMY

LABORRATEDISPARITYBETWEENU.S.ANDOFFSHOREOPERATIONSREQUIRESPRODUCTIVITYINVESTMENTANDIMPLEMENTATIONTOCREATEALEVELPLAYINGFIELDFORU.S.WORKERSANDU.S.PRODUCTSTAXINCENTIVESMARRIEDTOPRODUCTIVITYINVESTMENTCREATESASUSTAINABLEECONOMICENVIRONMENTFORPRODUCTSAGAINLABELED“MADEINAMERICA”

LEANISTHEINGREDIENTADDEDTOTAXINCENTIVESTHATDELIVERSTHEU.S.JOBSGROWTHOBJECTIVE


LEANMANUFACTURINGFindingCash&ProfitHiddenontheProduchonFloor

Tom Hildreth (303) 588 – 1447 [email protected]

Hildreth & Associates LLC

Broomfield, CO 80023


lean manufacturing 1-11-17

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