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Profiting from Lean Principles

The Weekly Report – October 4, 2021
Enterprise Minnesota staff spent a full day reviewing Lean Principles to brush up on the basics. 

As you may know, Enterprise Minnesota helps over 200 manufacturers improve efficiency and grow profits annually. As a part of this work, our consultants emphasize absorbing the fundamentals of Lean because the Lean journey is the basis for any successful organization. It’s no different than championship football players who deploy the basics of blocking and tackling during each workout. The ability to be “the best” rests on a strong foundation.

Lean manufacturing can lead to significant improvements, both on the shop floor and throughout the front office. On average, manufacturers that incorporate the principles of Lean have reduced costs by $24 million while adding and retaining over 780 jobs. What a monumental impact for business.

Last week, a couple of our expert continuous improvement consultants, Greg Hunsaker and David Ahlquist, led several of our staff through the “Principles of Lean Manufacturing” as a reminder of how valuable this process is for clients.  David took on the role of the leader of an imaginary company, Buzz Electronics Enterprises to showcase how the process works.

Mr. Buzz (David) loves his company, but he doesn’t like the low profit margins the company achieves with a traditional manufacturing process. His company makes two different electronic components and uses numerous people, many who handle the products in his traditional process.

We took on the roles in a 20-minute production line simulation. The line was trying to produce both components at the same time.

The result was low production and confused workers. With few components being completed, Mr. Buzz knew he was spending too much, and the results didn’t justify his expenses.

People were running around, yelling for parts. It was chaos.

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We tried a second simulation, this time with Lean techniques. Our leaders’ changes included better workforce practices, reduced batch sizes, and a new point-of-use storage system.

The new workforce practices included rotation of specific jobs, cross-training, and team-based problem solving. The reduced batch size used a make-one-piece, then move-it-on process. The point-of-storage improvements simplified physical inventory tracking, storage, and handling.

These incremental changes yielded desired results. It made the process more efficient, made better use of workers, and improved our results. 

There was less chaos, and more finished components were shipped. Production was up and costs were down. However, Mr. Buzz was hoping for more. He was happy that he was filling more orders and making money, but he was a little disappointed that the results weren’t better

That led to a third line. This time we implemented standardized work and inspections at the source of production to reduce waste and improve quality. We also implemented a pull system with each worker handling the product only when there was a need to continue the flow of the production.

There was even less confusion and better communication. This new process eliminated the chaos, and we almost doubled our production. We were also using two to three fewer workers, who were able to attend to other tasks. That was another huge cost-saving outcome that improved productivity in other areas of our worksite.

It’s interesting that a few simple changes produced significantly better results. The improved production and improved use of workers increased Mr. Buzz’s profits.

Incorporating Lean Principles into your business leads to continuous improvement by eliminating waste, maximizing value, improving culture, and making better use of your employees.

To learn more about Lean, please visit our website. 

Lake Area Bank banner adEvents Calendar

October 7 – A Model for Manufacturing Excellence Using ISO 9001
ISO certification expert Keith Gadacz will be discussing ways to take your operation from average to excellent using the ISO 9001 business management system. Online via Zoom  Learn more and register

October 21 – Investing In Your People to Create Leaders At All Levels
Talent and leadership development expert Abbey Hellickson will be demonstrating why leadership development is critical in today’s environment and how to determine key competencies for your organization . Online via Zoom  Learn more and register

November 10 – State of Manufacturing® survey release event
The State of Manufacturing 2021 will be an excellent opportunity to celebrate Minnesota’s manufacturing industry with hundreds of your fellow manufacturers and all who work in support of the industry.  Learn more and register to attend

See more upcoming events

Industry News

Canadian solar manufacturer expands on Minnesota Iron Range
Canada’s Heliene, a 12-year-old solar-equipment manufacturer, broke ground this month on a $21 million expansion of its plant in Mountain Iron, Minn., which will roughly double capacity. September 25, Star Tribune  Read more

Osseo Area Schools to offer free manufacturing training sessions for adults
Osseo Area Schools is partnering with CAPI and Century College to offer a free manufacturing training class for adults this fall. September 24,  Read more

October is Manufacturing Month in Minnesota
The manufacturing industry is a cornerstone of the state’s economy, offering a wealth of employment opportunities. Governor Tim Walz has proclaimed the entire month of October as Manufacturing Month. October 2,  Read more

Southwest Initiative Foundation aims to help families through assisting parents at work
SWIF has launched the first Employer Resource Network in Minnesota, a program geared toward employee retention and recruitment by helping workers’ families. October 2, West Central Tribune  Read more

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