Lean Implementation in Job Shop, Continuous Processes, and Discrete Process Businesses

First and foremost, it’s important to emphasize the 5 Lean Principles need to be followed in any type of lean implementation:

1. Specify Value

2. Map the Flow of Value

3. Achieve Continuous Flow (Flow Where You Can)

4. Install Pull (Pull Where You Can’t Flow)

5. Seek Perfection

It’s the application of these 5 principles, particularly Principles #3 and #4, that changes based on the type of business you have.

One more thing. Most companies think they’re unique, when, in fact, they’re really quite similar. For example, continuous processing industries are typically characterized by large-scale fixed capital equipment. Discrete industries are usually those with high labor content manual assembly operations. Job-Shop industries often have a large amount of materials inventory and exceptionally long lead times.

Discrete/Repetitive High-Mid Volume Businesses:

These are the businesses where Lean is most easily applied. Here we’re talking about basic machining and bench top assembly operations where you’re making parts, subassemblies, or final product assemblies (including packaging) one-piece at a time (even if you’re currently doing it in batches, and you’re running your processes at a high rate of speed, you’re still only making one piece at a time). It’s easy to see the product flowing, or sitting, in these types of operations.

Here it’s fairly straightforward to rearrange machines and workstations into one-piece flow cells, and, thereby, achieve continuous flow in this part of your business (Lean Principle #3).

Where you can’t flow you can set up Kanbans and Supermarkets to enable Pull (Lean Principle #4) in your Value Stream(s).

So the solution here is to implement Lean the way Toyota and others have been doing it. What’s stopping you?

Continuous Processing High-Mid Volume Businesses:

This is where you run into what Lean calls “Monuments”, large fixed assets (capital equipment) that are difficult and expensive to change. The product or material is often contained in large vessels or pipelines and delivered directly to the base machines without being touched or seen by operators. And it’s often impossible to see one piece at a time being made. Primary metals (steel, aluminum, etc) manufacturing is done this way, as is papers, plastics, fabrics, petroleum, chemicals, food processing, and other industries.

Here it’s not an easy task to convert these “Monuments” to enable one-piece flows. It’s even difficult to determine what a one-piece flow size would be.

One large consumer products company we worked with determined, after a considerable amount of careful thinking and calculations, their one-piece flow was going to be a case size quantity of product. Once this was established, it became immediately apparent the Monuments on the front end of their business (the making end) were all designed, built, installed, and operated as fixed assets that needed to be run “flat out” at the rate of 168 hours per week. So was the packaging end of their business….all high speed lines. Overall Equipment Effectiveness (OEE) and Cost Per Case were the two primary metrics the plants were measured on. The result was a whole string of highly efficient manufacturing plants…..and mountains of inventory! So while the production plants were efficient, they weren’t flexible at all. The efficiencies at the plant level were swallowed up by the huge inventory costs! This wasn’t apparent until they started looking at their Macro Value Streams and their costs of doing business this way.

Now it became clear the monuments were barriers to “going lean”, and would need to be changed. The cost of changing these monuments was significant. But so was the cost of not changing them! The answer, in this case, was to spend capital on designing, building, installing, and running (operating and maintaining) smaller batch-size equipment on the making end and smaller packaging equipment on the finishing end of these value streams. The avoided and/or reduced inventory costs justified this investment.

So that’s the solution in these types of businesses: invest in capital to right-size the equipment to better match actual customer demand, and to make it flexible so you can easily switch over (changeover) to other products when customer demand changes.

Job Shop Very Low – Low-Mid Volume Businesses:

These businesses are characterized by custom orders of very low quantities of product, often by a customer who doesn’t want to wait a long time for delivery.

How does Lean apply here? You might be thinking that it doesn’t and that you’ll have to respond to actual customer orders using a “push” scheduling system, and do the best you can with lead time.

Well…..you can use Lean Principles in a Job Shop business just as effectively as in high-volume repetitive discrete businesses. The difference is in your flexibility. In a Job Shop environment you’ll need 10X more flexibility!

We find in many of these job shop enterprises, after developing product family matrices, that a number of products are repetitive anyway. If they’re repetitive, you can set up dedicated cells, pull systems, and short lead times to respond to these customers. This will probably cover about 80% of your volume, but only about 20% of your customers.

The other 80% of your customers (and 20% of your volume) probably is true “job shop” demand.

For these customers you’ll need to set up and run a highly flexibly value stream that can easily changeover (<100 seconds) based on rapidly changing low volume demand. I’ve working in places where we’ve simply called these our “all other” Product Family Value Stream. This is the one you’ll need small-scale flexibly equipment, a lower level of automation, a high degree of cross-training, and flexible people who’ll instantly move from cell to cell and line to line when required. One other difference between Job Shop and Repetitive is the cells may not be staffed anywhere near 100% of the time. “Staffing to the Interval” is the issue in Job Shop businesses.

And we still need to apply 1. Value, 2. Map Value, 3. Flow, 4. Pull, and 5. Seek Perfection to these Job Shop value streams.

So there you have it! Lean applies to any type of business. You are not as unique as you think!