Total Flow Management

Euclides A. Coimbra and his associates at the Kaizen Institute have created a wonderful and detailed work on the application of continuous improvement to supply chains.  Here is a full exploration and application of lean from end to end of the extended value stream that they call Total Flow Management.  Two thumbs up!

Some of the graphics look to once have been powerpoint and when reproduced are to small and grainy to be able to read.  There isn’t an index so finding topics is limited to the table of contents.  The book is hard bound, and printed on good paper.

Some of the vocabulary is odd; “border of line” might be better said as” interface” or “borderline”.

Economic Order Quantity, or as referred to in this book, Wilson’s Formula, is treated in a refreshing way.

We can say that Wilson’s formula still applies today.  The only problem is when people assume that changeover time (or, generally speaking, ordering cost) is rigid and cannot be reduced.  Many people don’t think to do Wilson’s calculations because they are still misled by two strong paradigms: flow at any cost and efficiency at any cost.

The ‘flow at any cost’ paradigm is a rising paradigm that is currently gaining in popularity.  People hear about the wonderful Toyota Production System (TPS) and start to increase the flow by reducing the batch sizes blindly, without looking at Wilson’s formula.  What happens is that the CAPEX requirements explode, because the small batch sizes together with big changeover times decrease efficiency.  The result is that flow is indeed achieved – but at the expense of capital expenditure, not by internally reducing the changeover time and increasing equipment flexibility.  You can see this effect in many rich companies that are implementing Lean manufacturing and the TPS.

For a more in depth review check out Jon Miller’s posting on Gemba Panta Rei,
Review of Total Flow Management by Euclides Coimbra.

Replenishment Strategies

Determining an appropriate production model starts with Demand Profile and Demand Segmentation.  High volume low variability items, and low volume high variability items behave very differently.  How to decide if a particular product is a candidate for a one piece flow cell or a craftsmen job bench?  Look to the coefficient of variation for a clue.

Demand Segmentation - Volume vs Variability

 

Type 1 – Rate-base or Just-in-time

  • forecasting of the flow rate or takt time
  • RCCP – rough  cut capacity planning to monitor impact of mix and volume on pace maker operation
  • produce to rate (or TAKT) vs discrete order or customer pull
  • demand flow vs time-phased requirements planning
  • maintain flow priority and timing
  • no detailed Capacity Requirements Planning required
  • no or minimal shop order launch or inventory transactions
  • highly visual and standardized shop floor control
  • “one-piece” flow, zero inventory, standard WIP – work-in-process
  • seamless flow/pull of material
  • Dynamic cycle time (Little’s Law)

Type 2 – Pull

  • combination of discrete forecasting and/or demand rate-based forecasting
  • MRP planning — pull Kanban, Heijunka visual shop floor control
  • RCCP, but no detailed CRP
  • flat Bills Of Materials
  • more cellular manufacturing
  • point-of-use vs. central stores
  • inventory is strategic: standard inventory, time-based replenishment, pull based on consumption vs. push based on demand
  • based on statistically balanced rate, build to level-loaded demand with calculated standard inventory buffers

Type 3 – Push or Job Shop Discrete

  • discrete requirements planning (firm orders and long range forecast)
  • Rough Cut Capacity Plan
  • time phasing of requirements
  • application of order policies: lead time, safety stock & time
  • Capacity Requirements Planning
  • MRP shop order launch & order maintenance (message filters and “noise management”)
  • ability to aggregate disparate requirements across multiple products by work center, supplier, product
  • central stores of inventory
  • multi-level inventory: stores, pick, kit, move, queue
  • batch processing
  • demand leveling difficult and uneconomical

Building a Lean Fulfillment Stream

 

BuildingLeanFulfillment

 

Hot off the press from the Lean Enterprise Institute

Page 12 & 13 have a brief description of Coefficient of Variation and a SKU Scatter Diagram (weekly volume vs. SKU stability).  10 weeks usually isn’t sufficient for meaningful or statistically significant calculation of standard deviation.  25 data points would be better, and you might need a lot more if there’s any seasonality to deal with.

The guidelines given need to be tempered with the granularity of the data.  While a coefficient of variation of less than 1.0 can be considered stable for weekly data, it would be considered very noisy when using monthly data and quite stable when using daily demand.

This small quibble aside the authors Martichenko and von Grabe do a wonderful job describing lean principles for the supply chain, or as they prefer, the fulfillment stream.

 

 

Coefficient of Variation

A measure of the volatility of customer orders (or any time series), aka Demand Linearity

  1. Calculate the standard deviation (s) of the historical demand, use appropriate time buckets (daily, weekly, monthly)
  2. You might need to discard abnormal demand
  3. Calculate the historical mean (x) (or average) or use the forecast mean
  4. Then calculate the coefficient of variation (Cv)  Cv = s/x
  5. Low variability is a Cv less then 1.0, very stable demand is a Cv less than 0.5

Demand Profile

Maslow’s hammer, or a golden hammer is an over-reliance on a familiar tool; as Abraham Maslow said in 1966 in A Psychology of Science, “It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”  So, must every product in every business segment be set up in a one piece flow cell? Or put on kanban with an heijunka to smooth demand? Or run on a rate-based assembly line? Certainly not!  One size rarely fits all.  But how to know which techniques make sense?

One place to start is to look at customer demand. All lean practitioners know about Takt Time, or the customer drum beat, that is used to match the pace of an operation with customer demand.  Takt Time is calculated as Available Time/Demand, and is by definition a ratio of averages.  But customer demand is anything but average, and so we need to understand the variation or range of demand placed on our process.

Here’s an example …

To build a demand profile take the following steps:

  1. Pick a product, product family, customer, customer-item pair, or business unit of interest.
  2. Determine an appropriate time unit – hourly, daily, monthly.
  3. Gather the true demand as best you can.  Be careful about using promise dates instead of requested dates, and be doubly cautious of schedules which are often smoothed, filtered, or otherwise manipulated.
  4. Create the graph or time series plot as above.
  5. Now calculate some simple descriptive statistics – range, minimum, maximum, standard deviation, etc.  In this example the average is 17 with a range of 49 and a standard deviation of 11.

What can we conclude?  Should we design our operations control around a demand rate of 17 a day?  Is the variation in demand something we can deal with?  How?

 

 

Improve Turnaround, Shutdown, and Outage Duration: After Action Review

The practice of After Action Review, AAR, comes from the military, as in the US Army’s TC25-20 “A Leader’s Guide to After-Action Reviews” 9/93.  The approach is a classic example of Plan/Do/Check/Act and after an activity, while events are still fresh we ask five questions as follows:

  1. What was the plan?
  2. What actually happened?
  3. What went well?  So we can be sure to do it again.
  4. What went wrong?  So we can figure out how to do better.
  5. What are we going to do now?

Guest Post – Minarai: apprentice, beginner; learn by observing

Guest post by Larry Loucka about minarai: apprentice, learner on Mark Hamel’s blog Gemba Tales:

As I ready myself for a new mentoring relationship in a few weeks, I’ve been pondering roles and approaches. What will I do the same, what will I change as I help facilitate a new lean transformation?

My job, as teacher and coach, is to assist the organization make change. Their chosen strategy is to implement lean and six sigma. The knowledge transfer approach I prefer is see one, do one, teach one.

At first the apprentice just watches me do my thing – plan the calendar, roles, objectives; do the training, explain the principles, and run the events; check the metrics and take everyone’s pulse; act on what I see. Usually I don’t explain what I’m doing; I just run the kaizen event; form subs teams, hand out assignments, train-and-do.

After a time, the student is called upon to perform some of the routine activities, give some of the lessons,  and apply some of the tougher tools. Then comes the day when the roles start to reverse; the student tries to run a kaizen and the teacher observes, intervening off-line, giving feedback quietly, and asking questions, checking comprehension. As confidence and experience grow the student becomes the teacher.

Asked the other day, “What’s the difference in your approach and Shingijutsu?”  I was reminded of something James Womack once wrote. It’s a lengthy, but insightful quote,

“We’re now trying to write down all of the techniques you need to actually become lean. The Toyota teaching method is what we would call sensei-deshi, with the sensei being the great teacher and the deshi, the student. Basically, here’s how it works at Toyota: The kids get out of the university and join the company. Then they’re told, ‘Okay, you know how to do math, and you know how to read. Forget all the rest of the crap. We hope you had a lot of party time because now you’re going to be working long hours for the next 40 years, and we will teach you what you need to know. We’ll start by having you stay right here and look around for waste—muda in Japanese— and we’ll be back in a few hours.’ When the teacher comes back, he’ll ask the employee to tell him all about the waste he sees. It’s an empirical teaching method in which the sensei simply asks questions: ‘What do you think about this operation?’ ‘Why aren’t you looking over here?’ ‘Over there?’ ‘Why is something happening this way?’ They start with applications, and let you figure out the principles. Generally, the way we teach in the West is to start with principles, and then let the pupil to work out applications.”

Which way is better?

Comment by Zane Ferry added great insight.  Zane wrote …

Congratulations, Larry, on your new “relationship.” Good word. I appreciate the humility it conveys together with a sense of anticipation and even mild anxiety. It’s refreshing for a consultant to reveal his internal dialogue – as I sense you might be doing here – in this particular context without a lot of posturing and coded language (consultant, client, contract, deliverables, performance, etc.). Uttered reflexively, that language sort of language, nonetheless, undermines the potential of the fresh student/teacher encounter before it’s even begun. Kudos, Larry, for not succumbing to that impulse if you did happen to feel it coming on.

I mention this because I think that this impulse is a defensive one that cuts two ways, both damaging. First, it works to impersonalize a relationship that we know, in our heart of hearts, is likely to expose our own vulnerabilities and weaknesses in a context with considerable professional risk. Yeow. If something happens to go sideways once we’re deeply involved, well, the impersonal characterization of the relationship has already numbed our ego slightly to the sting of potential embarrassment. Alright, that’s just human nature; however, a really unfortunate and counterproductive consequence of the same posture can be a sense of blamelessness on our part for “the break up.” Introspection that should occur naturally upon the loss of an important relationship is blunted; the law of cause-and-effect is denied; root cause analysis (our cherished tool) is never applied. The lesson is lost on the teacher, so to speak, and our potential for becoming genuine “mentors” is stunted.

The second cut is, in fact, the cruelest – a deception right on the threshold of the fledging relationship. The language and posture we’ve drawn as a defensive foil, perhaps even unconsciously, now functions aggressively by establishing an imbalance of power in the student/teacher relationship. The very pointed message it delivers is: You (student) are the one “subject to change” in this exchange; I (teacher) am the “agent of change” here. In essence, we say to our earnest disciples: ‘I am not really in this with you equally. Sure, you’ll have to make huge investments on many levels. You’ll need to change in all kinds of ways to mature. But me, I’m there already just trying to help you catch up.’

Other obstacles to growth accompany this type of flawed commitment, but the point is that arrogance, insecurity, callousness, and pride will undercut even the most knowledgeable mentor if s/he is afraid to lay it all on the line alongside their student’s good faith offering.

But back to your real question, Larry – whether to lead with principles or applications. Over the course of many years spent with Shingijutsu consultants, I think I’ve consistently seen a PDCA approach on their part to mentoring us. In the best examples, the sensei always seems, first of all, to be very conscious of the idiosyncrasies inherent in his path to understanding, application, and then what you might call mature knowledge or “wisdom.” Yes, idiosyncrasies. The best mentors are definitely aware of them – their own and, incredibly, ours too. By this I mean, they’ve been students of American cultural and intellectual biases for decades now. (A number of them have actual memories of their hometown’s bombardment by Boeing-made B-52s and their country’s surrender to the US in WW2.) They see the strengths/weaknesses of the biases in our daily environment and then in the unique behavior of their individual students. They listen far more than they speak so that when they see a meaningful “learning-opportunity” arise for, say, me (not the same thing as a “teaching opportunity”) they’ve already discerned my innate predilections – what appears to make Zane tick – and are at the ready with what they believe is the right words, actions, request, blunt objection or abject lesson in first principles that will work…then and there for me. I’m convinced this preternatural sensitivity is the result of many years spent in the explicitly humanistic systems deriving from the Toyota Production System itself.

Just a few days ago, in fact, I was commenting to one such consultant about the noticeably positive change in a particular team member’s involvement. That member, a respected engineer, had been noncommittal, even combative at times to the simple team objectives as part of a new product design modification and review process; specifically, the need to involve a sub-assembly vendor in the equipment design phase. In spite of that obvious “bad attitude,” the consultant had appeared blithely unaware of the fellow over a period of 2 months no less. Then, out of nowhere, the consultant posed a seemingly mundane (obvious) question to him: “Do you think the vendor would want to produce this whole sub-assembly for us if we designed the right fixture?” It worked! A new change-agent was ushered out of the darkness and cooperative design efforts ensued just like that.

“Why did your comment have such an impact on him after all this time?” I asked. “Oh, that? It wasn’t what I said,” sensei chirped. “It’s what he heard. He’d quietly realized the primary aim of HIS design idea wasn’t going to work after all. To him, my comment represented a way out and he seized it.”

Win-win. Of course, I thought to myself. The consultant had seen that member’s principle-based learning bias, placed it squarely within that company’s organizational culture, accurately foreseen that member’s final dilemma, and then patiently waited to inconspicuously and sympathetically present a lifeline. Here, it was a lesson in “application” based on “principles” of human behavior that resonated when it mattered.

May the Force be with you, Larry.

Improve Turnaround Outage Duration: Command Center

“Command Center” brings up images of NASA or maybe a natural disaster response team.  For a large planned maintenance turnaround the furniture and technology may be different but the concepts are much the same. The command center is the place where the outage leader directs the resources of the turnaround.  To do this successfully:

  • The Plan is available for all, and is easy to understand
  • Status of all work is constantly up to date and where exceptions, deviations stand out
  • Missing or stale information is obvious, as is who is responsible
  • Information ownership, source, and ‘freshness’ is easy to see
  • Deviations have pre-planned countermeasures clearly displayed
  • Information gets updated before or after not during meetings
  • When the critical path inevitably changes a new plan is in place in minutes not hours

Improve Turnaround Outage Duration: Scope Change Management

Uncontrolled scope change is unplanned work and this is a failure of either planning, reliability engineering, or management. Scope Change Management countermeasures include:

  • Scope freeze, scope change cutoff
  • Single point of authority to add/drop/change scope
  • Risk-based decision making on ‘found’ or ‘discovered’ work
  • Cost and duration offsets
  • Post shutdown root cause analysis and corrective action

So, when scope change happens we celebrate because this is an opportunity to learn and improve.

For part shortages, we pre-stage and confirm parts be fore needed.

For ‘found work’, we freeze the scope.

Over runs and delays can happen, and so the turnaround plan has a single delay buffer.

 

Improve Turnaround Outage Duration: Milestone Reporting

That’s a “GT” on the milestone, as in 10 miles north of Grahamstown South Africa.  Milestones were originally stone markers used by Roman road builders as a series of numbered markers provide reference points along the road.  Milestones can be used to reassure travelers that the proper path is being followed, and to indicate either distance traveled or the remaining distance to a destination.

Funny story – on Nantucket Island, located off the coast of Cape Cod in Massachusetts, USA the road from town to Siasconset is named the Milestone Road.  They have a Pi Milestone at 3.14 miles from town.

In a plant maintenance turnaround keeping track of the outage events and issues is a vital way for the organization to learn where they are and where they are going.  Its almost impossible to reconstruct the battle after the fact; memories fade, rationalizations creep in.  If you aren’t paying attention to the road markers and something happens how do you know where you are?

When all you measure is when the shutdown started and when it ended all you know is the total lost production time.  When key steps along the way are planned and recorded you can learn where the time goes, and then take steps to attack the biggest deviations.

Improve Turnaround Outage Duration: Non Stop Critical Path

Maintenance outages, turnarounds, or plant shutdowns are complex, and can involve hundreds or even thousands of temporary workers, and are very costly.  In our work we have been successful applying non stop critical path analysis in helping reduce large facility outage duration.  The immediate benefits are increased process availability and corresponding revenue and profit.  Typical outages are planned and scheduled months in advance and last anywhere from a week to a month or more.  Outage duration tactics include streamlining processes such as the shutdown and startup processes, improving the decision making and communications methods, and controlling scope.  Another tactic is externalizing tasks, which is by doing work before or after the process goes down, tasks such as pre staging tools and materials, preparing the work site.  We’ve also been working to better understand the nature of planning and executing Critical Path work.

We believe that a shorter critical path means an overall shorter outage.  To get a shorter critical path you often have to add additional resources which increases turnaround costs.  What we want to better understand are the conditions where a shorter outage actually costs less.  Typical contractor schedules are 2 ten hour shifts per day.  Productivity is believed to drop off significantly after 10 hours due to additional breaks and fatigue.  We have applied longer shifts to the critical path and have seen overall duration reduction.  We have also had mixed results with the concept of Non Stop Critical Path, also referred to as “tool to tool”.  Some types of work are machine rate based, for example tasks such as pipe welding or sand blasting.  For this type of work the value is in the “wrench or tool time”.  The concept is that the tool never stops.  The welder stays on the tool until someone comes, taps the worker on the shoulder, takes the welding rod and keeps on welding.   While working spotters make sure the value adding worker never has to go searching for weld rod; an assistant keeps the worker supplied.  The tool never takes a lunch break, or goes on treasure hunts; the tool works as close to 24 hours as possible.  To do this we have spotters filling in for the workers when they take their breaks, and stagger crew start times.

Shutdowns can have a range of % critical path work.  Sometimes the critical path is almost the entire outage work scope; in other cases the critical path work can be as little as 5% of the overall outage effort.  We believe that when the critical path is narrow, or a small portion of the overall work, then applying additional labor to the critical path can greatly reduce the overall cost and duration of the outage.

Staffing Non Stop Critical Path of course takes more resource and is a higher operating expense then the normal 2 ten hour shifts.  Non Stop Critical Path provides not only an additional 4 hours of shift time compared to 2 Tens, it also adds back two lunches, 6 breaks, and 2 sets of getting to and from the work face, or some 7 or more hours of tool time per day.

The combination of shift patterns, over time, mix of critical path work, equipment rentals, etc. makes it difficult to apply a general rule for all turnarounds as to whether extending shift length or adding labor to the critical path increases or decreases overall outage expenses.  So a model is needed to answer the question of under what conditions does applying extra labor to get a shorter outage actually cost less.

Improve Turnaround Outage Duration: Parallel Planning

 

Outage readiness is better when all the right people give and receive input at the earliest effective date; bust the silos, jump the walls, and use parallel planning …

  • Everyone shares the goal of being ready to go fast (and safely) when the outage begins, so we’ll benefit from bringing the right people together to ensure we have the right inputs and everyone is working from the same plan
  • Close to the shutdown date many key decisions are made and people from a lot of groups are preparing – they all need to be in sync
  • Hear one message and one answer to key questions, and those with input have a channel for sharing

 

What’s different with parallel planning?

  • Draft schedule available earlier; honest, because when developed in parallel there’s less rework
  • Earlier involvement of key contractors learning about plans and schedules and giving input on what will work
  • Greater turnaround leader and scheduler interaction
  • Earlier involvement and input from all support groups
  • Wider understanding of preparation and externalization efforts
  • More focus on any scope changes that occur inside of the gate reviews due to greater exposure to the plan and schedule

Improve Turnaround Outage Duration: Shutdown & Startup

All too often the battle for managing the duration and cost of a planned plant maintenance shutdown is lost in the stages of shutting down or the starting up of the operation.  While a lot of planning effort usually goes into understanding and coordinating the maintenance work it is the unknowns that that pop up as the process is coming off line, or perhaps more often the surprises that occur when starting up that can throw the best made plans out the window.

Checklists and SOP’s are always good things to have.

Here are a few more things to have on your Startup to-do list …
  1. As Built plant configuration
  2. Post maintenance inspection of equipment condition
  3. Verify and validate maintenance work completion
  4. Visual and physical checks for leak and pressure
  5. Instrument performance and controller checks
  6. Safety and relief valve checks
  7. Lockout-tagout de-blinding activities
  8. Utility (steam, air, power, fuel, refrigerant, solvent) availability checks
  9. Commissioning of units as per Standard Operating Procedure
  10. No load testing of pumps, motors, compressors, turbines
  11. Start-up – cold circulation
  12. Warming up

But even with all of these precautions things can still go wrong, and when they do the clock keeps running.  So what to do to reduce risks?  How about planning for the unexpected?

  • What-if and Failure Modes & Effects Analysis
  • Checklists and planned countermeasures
  • Dry runs & simulations
  • Postmortem and After Action Review – to capture learnings and drive continuous improvement

Improve Turnaround Outage Duration: Constraint Busting

Scope and Gantt scrubs, reliability engineering equipment improvement  projects, and new technologies are steps we can take to extend the life of equipment or to mitigate obstacles to minimizing outage duration.  Some examples of constraint busting include:

  • Deferring work based on observation, inspection, and risk assessment
  • Installing new man doors can save time by opening up more work faces (parallel work) or making installation easier for utility or handling access (air lines, electrical cables, cranes for lifting)
  • A great engineering project example is the practice of swapping equipment rather than repairing in place
  • Working non-stop on the critical path, although not easy to do, can also have a big impact on outage duration and costs

 

The methodology we apply is Goldratt’s classic Theory of Constraints:

  1. Identify the Constraint – find the critical path and focus on it
  2. Decide how to Exploit the constraint – optimize resources
  3. Subordinate everything else – critical path gets top priority
  4. Elevate the constraint – open new work faces, overlap shifts
  5. Repeat – start over

Improve Turnaround Outage Duration: Externalize

Externalize: when looking at all of the tasks that occur leading up to, during, and after a planned maintenance shutdown it can be helpful to categorize each task as internal or external.  Internal tasks are those that can only be performed when the process is stopped, while External tasks can be done either before shutdown or after starting back up.

Here are examples of tasks often found happening during an outage that, some of or all, could have been done while the process was running:

  1. Repairs to work done during the outage
  2. Reinspecting someone’s work
  3. Waiting for parts, tools, work instructions
  4. Waiting for a ride to the work face
  5. Waiting for inspector, permit writer
  6. Building scaffolds
  7. Moving materials or tools to the point of use
  8. Treasure hunts, scavenger hunts
  9. Preparing reports, making presentations
  10. Rerunning ‘the schedule’

Being able to see tasks as internal or external is the first step toward reducing the planned shutdown duration.

Tips for warehouse sizing


Tips for warehouse sizing:

  • Don’t get fooled by “averages”
  • Consider using statistical tools, such as standard deviation, and P.90 probability to analyze operational data – both in and out bound
  • Understand which system components can expand capacity by adding labor, and which can’t
  • Design expansion capability in from the start; SKU count almost always goes up, not down over time
  • Get executives to sign off on future sales projections that will serve as the basis of the design; if they won’t or can’t, then round up
  • Be very leery of unrealized plans to increase inventory turns; easier said then done
  • Consider ability to add overtime and additional shifts to expand initial system capacity
  • Recognize more companies regret having less capacity than those that think systems were over-specified
  • You can usually add labor to increase throughput in pick modules, but if a sorter is maxed out, there is not much you can usually do

Plant Shutdown Readiness

Shutdown readiness … You’ve heard the sayings “What gets measured gets better” and “Inspect what you expect”, well here’s a management control tool you can use to help drive the right behaviors leading up to and during your plant shutdown.  As a lean thinking leader take one of the cards, grab one of your people, and go for a walk. Then do something with what you find.

Turnaround Readiness Observation Cards

Download a copy of these checklists here.

ABC Analysis: how to

ABC Analysis is a common approach for prioritizing, classifying, or categorizing inventory management techniques. Classification is usually based on price or cost times usage or consumption volume. Typically ‘A Items’ are the highest dollar volume and represent 5 to 10% of the items and 50 to 70% of the total dollar volume. The ABC Analysis Principle is that A items are treated differently than C items.  A Items might be counted more frequently and have different planning parameters, higher inventory turns, higher safety stock and customer service levels.

  1. Make a list of part numbers
  2. Determine total quantity used over some period of time
  3. Obtaining the cost for each part
  4. Calculate usage $ value for each part by multiplying the quantity and the cost
  5. Sort the list from high to low $
  6. Calculate the total usage $ value for all items
  7. Calculate each item’s percent of total usage $ value
  8. Select percentage cut offs for each ABC group, for example:

 

Here’s an example …

Example of ABC Analysis

 

Next steps

Once you have classified your parts you can use this data to drive key materials management activities. For example, coordinating your perpetual inventory cycle counting program – you might routinely verify your Category A parts on a monthly basis but only review your category C parts twice a year.

You might use flow orders, kanban, or VMI for your C parts but require detailed negotiated purchase orders for your A parts.

In a warehouse you might want to be sure the A items are near the shipping dock and the C items are toward the back.

You might even want to take a close look at the C items and purge a few.

The main point is – one size doesn’t fit all parts, choose the materials management approach that best serves each inventory category.

Lean Plant Shutdown Strategies

Whether you call it a plant shutdown, outage, or turnaround getting the right work done, safely, and in the shortest time can be tricky.  Here are a few Lean Plant Shutdown Strategies we’ve taken that have helped make dramatic improvements in reducing planned and unplanned downtime:

Externalize – do nothing during the shutdown that can possibly be done while the process is running

  • SMED 101 – separate internal from external
  • Staging supplies – no ‘treasure hunts’
  • Prepare tool fixtures
  • Prepare work areas
  • Dry run, dress rehearsal, walk through, simulations
  • Checklists

 

Constraint Busting – find the constraint(s) and exploit/subordinate/elevate

  • Work scope scrubs – select work base on probability of failure and risk impact
  • Schedule scrubs – eliminate, combine, rearrange, simplify

 

Shutdown & Start Up – making the plant ready for maintenance work

  • Checklists
  • Dry run & simulations
  • Labor plans
  • Safety permits – lockout tag out efficiently
  • Parallel teams, chase the rabbit

 

Parallel Planning – bust organizational silos with concurrent cross functional teams

  • Work scope and schedule iterations and scrubs
  • Risk-based work selection
  • Contractor work reviews
  • Dry run dress rehearsals

 

Non Stop Critical Path – understand the trade offs when applying additional labor

  • Separate man and machine – machine based operations never stop (welding, blasting), man based operations suffer fatigue (demolition, fabricating)
  • Overlapping shifts
  • Relief crews
  • Runners, spotters, observers

 

Milestone Reporting – what gets measured get better

  • Categorize activities
  • Sequence prerequisites
  • plan vs actual
  • deviation, root cause, and countermeasures

 

Scope Change Management – unplanned work is a failure of planning or reliability engineering

  • Scope freeze, scope change cutoff
  • Single point of authority to add/drop/change scope
  • Risk-based decision making on ‘found’ or ‘discovered’ work
  • Cost and duration offsets
  • Post shutdown root cause analysis and corrective action

 

Command Center – transparency

  • The Plan is available for all, and easy to understand
  • Status of all work is easy and quick – exceptions, deviations stand out
  • Missing or stale information is obvious, as is who is responsible
  • Information ownership, source, and ‘freshness’ is easy to see
  • Deviations have countermeasures clearly displayed
  • Information updated before/after not during meetings
  • When the critical path change inevitably happens, new plan is in place in minutes not hours

 

Management Controls – inspect what you expect if you want to sustain

  • Preparation reviews
  • Gemba walks and paired observations
  • Site inspections
  • Checklist reviews
  • Performance metrics and countermeasures

 

After Action Review – no shutdown is flawless; learn and improve

  • What was the plan and what actually happened?
  • What went well?  What went wrong?
  • Separate common from special cause
  • Find solutions for common cause, buffer risks for special cause

Lean Shutdown Management

Shutdown, outage, turnaround, or whatever you call it can vary dramatically in effort, duration, and cost, for example:

  • Months off line and millions of dollars in contract labor for a turnaround in an oil refinery
  • Days or weeks for a chemical plant shutdown
  • Hours for a recurring changeovers in many process industries

burton-pit-crew-051409NASCAR is a good example of what can be accomplished through planning, scheduling and execution.  Major contributors to pit stop or shutdown performance include communication between production and maintenance and continuously working on improving the basics of planning and scheduling, execution and root cause problem solving.  In the 1950s, a good pit stop lasted 4 minutes.  If nothing had been done to improve these events in the years since (because everyone thought a four minute pit stop was good), we would still be watching them.  Interestingly, a NASCAR driver is in constant contact with the pit crew.  The driver doesn’t suddenly show up in the pit and complain about a problem with a right front tire, only to have the crew answer: “Let us go to the store and check on a spare tire.”  Unfortunately, this happens daily in most plants.  In NASCAR competition, there’s a strong motivation to win races; in our plants and facilities, there might be completely different factors driving motivation.

In addition to driving Planning and Scheduling to precision and excellence, NASCAR pit crews are continuously working on improving the basics.  This includes, among other things:

  • Analyzing problems and successes
  • Training 20 hours per week for 20 seconds of work on Sundays
  • Doing work right before doing it fast

Regardless of the length of a plant shutdown, the same principles apply in making these events more effective or leaner.

  • First and foremost, problem-free operation should be possible between scheduled shutdowns.  Mean time between production losses including quality, time, and production rate should be as long as possible.
  • Shutdowns should be performed with the right quality on all jobs, as quickly as possible.

The combination of how many shutdowns you have and how long they are affects both your production volume and your ability to deliver product on time.  It is a given that the shutdown must be scheduled (when and who executes what) and that all the jobs must be planned (what, how, all tools, spare parts and materials, lockout/tagout, etc.) before the shutdown begins.  In addition, all shutdowns should have a set time for freezing the schedule.  After the freezing point, no new jobs will be accepted without harsh criticism, and a corrective action plan.  Consider post freeze work requests to be an outage planning and reliability engineering process defect, and act accordingly.