Jeff Cederstrom, President of the Cutting Tool Division of Arch Global Precision, talks about how Protected Flow Manufacturing helps to resolve the production scheduling priority battles they face having both make-to-order and make-to-stock jobs fighting for similar shop floor resources. Watch Full Video Here
“I’m gonna spend a few minutes and share our experience with Protected Flow Manufacturing, again my name is Jeff Cederstrom. I’m the President of the cutting tool division of Arch Global Precision. I have responsibility for seven business units that manufacture cutting tools. So, when I talk about cutting tools think about the business end of a CNC mill. We make the carbide tools that go into the machine that machines out the other part, so all seven companies make cutting tools in all various shapes and sizes.
I’ve been in manufacturing most of my career, and what I would say is I’ve been in very few locations that I would say planning and scheduling is a strength, and the business units within Arch cutting tools group is no exception; it’s definitely not a strength. Each of the business units are profitable. We’ve got customers that rely on us and love us and have been with us for many years, so the businesses are good and healthy, but scheduling, planning and scheduling, is still not a strength.
“We had some scars trying to use the scheduling systems that were given to us in our ERP system.”
We decided at the at the highest level in the company that we were going to implement a standard ERP platform and we’re about halfway through that with Syteline 9, and cutting tools was on the bleeding edge of that, and the next quote that you see on there is the politically correct version of that statement, is that; “We had some scars trying to use the scheduling systems that were given to us in an ERP system.” Having said that, the plant that I’m going to talk about had their own way of scheduling which was called the rainbow system, and they use Foremen and this ‘rainbow’ prioritization system. We had been evolving into more of a work center, empowered work group type of a leadership in the plant so we had evolved to a different scheduling system and then we were trying this one on for size and we were having a hard time with the one that came with the package. And again, this was the politically correct version of saying that. The plant I’m going to talk about, UltraDex, has the experience with Protected Flow Manufacturing and prior to our implementing PFM in December they had what I would call “controlled chaos”, so in full disclosure we only have essentially three months plus of using this tool, so it’s a very limited experience and I’m going to go on to tell you that we implemented it in a pretty rough time frame as well.
“We’ve heard this before, and isn’t it true that we were supposed to have a version of something like this in our existing ERP system?”
So, Mike Lilly, Co-President of LillyWorks, came to one of my leadership team meetings and presented Protective Flow, and I had all my manufacturing leaders in the room and they were all very excited about what they heard. But then we have break, we hear comments like “We’ve heard this before, we’ve seen this before, and isn’t it true that we were supposed to have a version of something like this in our existing ERP system?” So, you kind of get this doubt that comes out even though you know Mike did a good job of explaining to my leaders exactly as he explains to the rest of us and they kind of walked out of there excited, but then you know the reality and the doubt sets in to some degree after afterwards.
I can’t emphasize this enough, the importance of change management when you’re working on implementing a process like this.
Mike spoke about this topic, and I can’t emphasize this enough, the importance of change management when you’re working on implementing a process like this, because as I mentioned, I’m a manufacturing person and all the folks that Mike presented to in my group are all manufacturing folks and they’re very proud. Mike doesn’t understand this business the way we do. I’ve been here for twenty years, so we’re very proud. We all know what we’re doing through this intuition and experience, and here comes a new tool and someone we don’t know that’s trying to help us do our jobs better. So, I can’t emphasize the importance of change management enough, having strong IT support, ideally, you’ve got strong leader support that sometimes ebbs and flows a little bit depending on you know the day, but I wanted to make that that point extremely clear.
The next bullet really kind of epitomizes a point that Mike was making as it applies to change management and the trust. The foremen said; “Hey, we’re going to implement a new system and I don’t necessarily have enough time to explain it all to you but we’re gonna follow this new schedule that’s about to come out”. As you can see, I had support all the way down to the foreman, but when we took it out on the shop floor and all of a sudden this looks different, and so their approach was “I’m was told to do this and I’m gonna follow it”. However, when the foreman wasn’t there, the operations folks, caring as much as they do, start looking behind the scenes and pulling the curtain back. They start checking for themselves whether this makes sense. Here is an early quote from what I’ll call an opinion leader, a very highly skilled operator in our milling Department that says; “Hey, I looked into a couple of these jobs and I had no idea, I look at the due date every day, but I had no idea that this particular job that just boomeranged back to me has two external operations that we hadn’t have been accounting for. We were just looking at the end due date and were putting it off, but it’s got to go outside the plant two times.”
They went and they proved PFM was working themselves
Production Execution Window
So at the end of the day it wasn’t me, it wasn’t the general manager, it wasn’t the foreman that helped the folks on the floor understand that this tool works, they went and they proved it themselves by pulling back the curtain and looking at a job or two. So that was a bit of an inflection point and we started to get some momentum again in a relatively short amount of time here. I made the comment about us implementing Protected Flow at a really bad period of time and we insult tested this.
The plant was growing and its on-time delivery was slipping quite a bit, so we needed to do something different.
One thing I forgot to mention is that the plant I’m talking about was growing and its on-time delivery was slipping quite a bit, so we needed to do something different. So, I wasn’t going to wait for a great time in the year, and what happened is this got implemented in the beginning of December which is right after Thanksgiving and a statewide holiday we call deer hunting in Michigan, so we were behind, and then it got implemented in December and we had more holidays, we got farther behind. We took a two-day outage to do inventory count, but it put us more behind and these really added up to some delays. When I say we “insult tested” Protected Flow, we really insult tested it.
We came back after the first of the year and the plant manager pulled me aside and said: “Hey, just so you know, with the new tool that we’re working on here, we’re over a hundred jobs behind and the production schedule is at least two to three weeks behind, but don’t worry this is not Protected Flow’s fault because this is this way every year when we come around. So, I’m not blaming anyone, I’m just letting you know where we stand.”
“This is not the job I would pick. I’ve been here 20 years. I would never do it this way, but we’re gonna trust it.”
So, we insult tested this, and we stuck to it and we told everyone that the only way this is going to work is if you follow it and don’t try to out think it. Don’t try to use your intuition, please try to follow the way it’s set up. We had quotes like the one that’s up there; “This is not the job I would pick. I’ve been here 20 years. I would never do it this way, but we’re gonna trust it.” I had talked before about how they went and they checked on it, and how they believed in it. Then when we kind of had a turning point in the beginning of January where there was a handful of customers that were really screaming, and we started to do what we normally do; we take those jobs out into the plant, management does, and we start walking around and say; “See this.” And the folks on the floor knew that if we started to make changes around the schedule that we had established, they knew that it was kind of garbage in garbage out, and all of a sudden that was going to degrade. To their credit, and this was the turning point, the operations folks said; “All right, time out. Are we going to do it this way or are we going to do it the old way? Because we can’t do it both.”
“Are we going to do it this way or are we going to do it the old way? Because we can’t do it both.”
That was a turning point for us, and so the trust continued, and it moved forward, and we figured out a way to get those jobs put into the schedule so that they were in there, as opposed to going around the schedule on the shop floor using that type of communication.
I need to mention that UltraDex is both a make-to-stock and a make-to-order plant, and one of the benefits that we’re seeing is that, in addition to the timing for the jobs, we have now clear priority between the make-to-order and the make-to-stock. So, Protected Flow Manufacturing clearly lays out the priority not just of the date that we’ve told the Customer, but also between to make-to-order and the make-to-stock, it’s all built in there. I’m not saying that UltraDex is the most complex business unit in the world, but we have shared people and shared machine resources to make the make-to-order and the make-to-stock, so decisions do need to be made.
We have now clear priority between the make-to-order and the make-to-stock
So, results so far: I mentioned that we came back January 1st we were one-hundred jobs behind and the shop floor was two or three weeks behind. I checked back in with our Foreman, he’s taken the lead on the shop floor scheduling part of all of UltraDex, and at the end of January we were approximately 40 jobs overdue, but he said; “You know, that seems like a big deal, but what’s a bigger deal to me is that instead of two or three weeks behind they’re more like, you know, three or four days behind.” Then I checked in with him right before I came here for this conference and you know, we were fourteen jobs behind and the shop floor was one or two days behind, and his quote was “I haven’t seen us this caught up with the make to order since I’ve been here.” Now, we’re getting a lot more orders in so if we check, maybe next weekend we may not be quite as good because we were taking on more orders, we’re growing, we’re a growing business unit, but that’s a pretty big statement for someone who’s been around there for a while to make that comment.
“I haven’t seen us this caught up with the make-to-order since I’ve been here.”
I can’t claim a lot of the hard facts because it’s been too early, but we have an opportunity to move our lead times from 8 to 10 weeks potentially down to where we had been at one time, 6 to 8 weeks. We haven’t done that yet, but it’s being entertained and discussed right now. We’re talking about taking overtime down on the weekends, so we’re talking about taking the overtime down and reducing costs that way. We are working to get our make-to-stock quantities from a six-month quantity down to a four-month quantity because we feel that we’re more nimble now and can come back around on the schedule more easily than we had in the past, so we’re taking a little bit of a risk there, but we’re working it down on the make to stock side.
Protected Flow Manufacturing provides a foundation for ongoing improvement
I had talked to the plant a number of times about bringing in some lean resources to optimize various bottlenecks in the plant, but quite frankly, if you’re not working on the right jobs at the right time it’s kind of a futile activity, so you can increase your capacity in what looks like a bottleneck, but if it’s really not a bottleneck – well, you know. If you schedule the jobs right it doesn’t make sense.
Putting jobs out to the shop floor before they need to be put out there essentially burns up machine time prematurely.
I kind of skipped over one point I wanted to make – “We don’t kick all the jobs off at once like we used to.” That’s another quote that came out of the plant. Putting jobs out to the shop floor before they need to be put out there, it essentially burns up machine time prematurely. You utilize capacity before it needs to be used by putting all the jobs out of the shop floor at once. So the way a lot of plants that I’ve worked in function, including UltraDex, is that they would kick these jobs as soon as they got off the engineers desk and they would be staring at 50, 60, 70 jobs, and what they would do is they would look at the due date and they would look at how they were set up, and they would pick the jobs and they would batch it and group in that way. Now we only kick a certain number of jobs so, they’re only say, 20 jobs that are seen on the schedule, and the folks that are in the plant have the opportunity to optimize the setup on the jobs that are there, not a list of 60, 70, 80 jobs that they can batch from a setup standpoint, you can do it within a smaller groups so that we’re honoring the due date as much or more than the set up.
It’s this concept of we’re running it through the plant efficiently, but you know, kicking all the job off at once produces things that are done early and if the the customer is not ready for them we just wasted time manufacturing them and getting them ready before they were needed.
So back to this foundation for improvement that I was talking about, now that we’ve got a better idea of, you know, the swamp’s been drained a little bit, and we have a little bit better picture of where the actual bottlenecks are, we can go in and spend some more time optimizing and de-bottlenecking the plant.
The Lilly family has been innovating software for manufacturing companies since 1960. LillyWorks serves only manufacturing companies, putting Manufacturing Back in ERP™. LillyWorks is headquartered at One Liberty Lane, Suite 210, Hampton, NH 03842. Telephone 603-926-9696 or visit www.lillyworks.com.
Frustrated by having to tell customers you’re going to be late? Watch A Better Way to Schedule (video)