May, 2009

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Article Index

St. Paul Stamp Works: This Manufacturer Has Seen It All
Article by: Justin Dorsey
What do you say about a family-owned manufacturer that was founded in 1870 and is still owned and run by the founding family's descendants? Wow! The company is St. Paul Stamp Works, Inc. www.stpaulstamp.com
Lean Champion's Corner: WIP and its Effect on Process Times
Article by: Jim McCarthy
Question: I often hear people talking about "WIP" when they want to reduce lead time to make parts in a manufacturing plant. I am not quite sure what they mean.
Using Ergonomics as Building Blocks for Reducing Work Injuries
Article by: Sue Milholland
When most of us hear the term “ergonomics,” we think of automated equipment and dollar signs. Misconceptions abound. By definition, “ergonomics” is the study of work and how that work interfaces with the human body.
Employers cut 1,600 jobs in May; smallest job loss in nine months
Article by: DEED
Minnesota employers cut 1,600 jobs in May, the smallest monthly loss since August 2008, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED). Over the past year, the state has lost 3.4 percent of its jobs, compared with job cuts nationwide of 4 percent.
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St. Paul Stamp Works: This Manufacturer Has Seen It All
What do you say about a family-owned manufacturer that was founded in 1870 and is still owned and run by the founding family's descendants? Wow! The company is St. Paul Stamp Works, Inc. www.stpaulstamp.com

The web-site contains a very extensive history. The most amazing thing is that the company began as an engraver - and is still an engraver. Talk about business continuity!



Today, St. Paul Stamp's business consists of customizing name plates, labels, and an assortment of stamps (such as return address, notary and date stamps). Labels come in all sizes and shapes but are predominately used on manufactured goods to reflect product line information and instructions. One example might be a data info plate attached to a water heater. Future growth in this product line involves attaching extremely small wear-resistant labels to medical devices. Name plates might be as simple as company logos and employee names on a single or dual color background, or detailed as a large placard photo-etched with full color and intricate background scenery. The oldest piece of machinery is a hand-drawn etching machine from the 1930's which is still used today, albeit on a very limited basis, to beautifully engrave and emboss the front covers of customized corporate record books.

St. Paul Stamp has facilities in St. Paul, Mankato, Kansas City, MO, and Los Angeles. For a small and geographically diverse company, Lean has proven to be an invaluable asset. Jim Mellgren (QA Manager) has overseen that transition. As he says, "Our Lean initiative is new. We got a grant through the Minnesota Job Skills Partnership. We chose to focus on our main production line and reduced the throughput from 15 to 10 days. That success really raised eye-brows around here and led to a wider effort to network with other Lean manufacturers, which led us to the Manufacturers Alliance and the Leaders Alliance Peer Groups. That has been a great discovery for us and we are now working with them on other 'possible' Lean initiatives."

With regard to "broader" issues, St. Paul Stamp has largely avoided off-shore competition. As Jim says, "We keep our eye on it, but so far have not noticed much impact. What we suspect is that our product line is not only largely customized - but it's also three-dimensional. It is routine for our clients to want to touch-and-feel samples before we commence full-runs. And, it is also very common for them to want to tweak the product at some point in the process. What we're talking about is very often the 'face' of their company and they want to make sure that it looks just-so. If we put ourselves in our clients shoes, that feels like a pretty tough job to take overseas. Still, we keep our eye on it and don't take anything for granted. In that sense, our clients get the benefit of our being aware of the competition and doing our best to outpace it."

When asked about the key to company longevity, Jim immediately says "our people." As he points out, many of them have been with the company longer than he has. Because there is such a good rapport between them, it actually made the Lean initiative easier. "Our folks intuitively know that what we have here is very unusual. Some of them are second or third generation descendants of families that have worked here. So, when we talk to them about 'bottlenecks' or Lean 'office' initiatives there's no friction about whether or not we should try it. They just see it as a natural process of trial and error, necessary to keep reinvigorating our company. The common goal is to see it pass to the next generation." When asked about plans to keep involved with the Manufacturers Alliance, Jim says, "Looking back, we should have gotten involved a long time ago. So, shame on us for not being more 'collaboratively' focused. But, that's water over the dam. Going forward, we have every intention of being active members. Peer-to-peer sharing is a natural extension of what has made us successful internally for five generations."
Justin Dorsey, Director of Sales & Marketing, Advanced Capital Group located at 50 South Sixth Street, #975 Minneapolis, MN 55402. call (612) 230-3009, email jdorsey@acgbiz.com, or visit www.acgbiz.com.

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Lean Champion's Corner: WIP and its Effect on Process Times
Question: I often hear people talking about "WIP" when they want to reduce lead time to make parts in a manufacturing plant. I am not quite sure what they mean.

How can this help me speed up my customer delivery times? We are in danger of losing some customers if we don't improve our on-time deliveries. Furthermore, we are trying to maintain our business reputation, but we can't really predict or control our process and lead times. Our team holds a morning meeting each day (usually 45 minutes long) to try to uncover some of the causes and make changes, but we are still delivering late, and our sales people tell me they are continually apologizing and offering concessions to make up for inconsistent performance. Lately, my entire day is filled with fire fighting related to delivery performance issues. Please help!

Lean Champion's Answer: I feel your pain! Let's see if I can help. WIP is "Work in Process". WIP is inventory between the start and end points of a product routing or process. There is WIP in both manufacturing and office processes. In other words, WIP is any "stuff" being worked on that is not stocked or complete.

WIP is an important parameter because it affects the time it takes to process parts through the system and critically affects ability to maintain quoted lead times. A law known as "Little's Law" pretty much tells the story. Little's Law is stated as: Cycle Time (CT) is equal to WIP divided by Throughput (TH). Cycle time is the process time while the product is in WIP. Throughput is the inverse of cycle time, i.e., if a process takes 0.02 hours per part, then the throughput is:

1 part divided by .02 hours = 50 parts per hour through that process

Let's say you have 500 parts in process and your process is capable of doing the above 50 parts per hour. Using Little's Law we can predict that this process will take:

500 Parts divided by 50 parts per hour = 10 hours.

Note: cycle time and throughput are on a "time basis" of hours; units must be constant for the formula to work correctly. You can work in minutes or days or any other time unit as long as you are consistent throughout the formula.

You can see that your factory is loaded for the next 10 working hours and if an order for part number "501" comes in you can tell the customer it will take 10 hours (queue time) + .02 hrs. (part process time), or, 10.02 working hours to produce at the rate of 50 parts per hour, with 500 parts ahead of it. (Don't forget to add non-work times for calendar time estimates). The 10 hours will result in new orders waiting, unless something is done to increase the throughput or invoke "passing" (where part 501's order jumps ahead of all or part of the preceding 500 piece order). The problem with passing is that it usually makes other orders late. If 10.02 working hours is unacceptable to the customer, then you will have to pull a "capacity trigger" (assuming passing is not acceptable) in order to shorten the 10.02 hours to an acceptable level. Capacity triggers increase throughput, and consequently reduce overall cycle time, to produce the parts in queue for a given amount of WIP.

Little's law is physical law, and will prevail over the long run, so it helps us plan and improve our work. However, if we ignore it, the results can be very disappointing. If WIP increases without adjusting throughput, our cycle times can easily go beyond acceptable limits. The key is knowing "real time" when this is happening so you can react (without overreacting by spending too much money). Conversely, if WIP is reduced below "critical levels", throughput, and thus revenue, can decline. "Critical WIP" is the WIP level where cycle time is minimum and throughput is maximum. Indeed, this is a delicate balance, but with the right metrics and visual management tools, this is can work (even in mixed model and custom environments).

Using these principles, I was able to help a company drop total cycle time from 67.88 hours to 11.30 hours - an 83.3% improvement (six times faster than the original time). Always remember; you can't improve what you don't measure, nor can you manage something unless you have a way to measure it.

Do you want to know more on how to cost effectively improve customer service levels and simultaneously increase revenue? Consider attending the Manufacturers Alliance Lead Time Reduction seminar, on June 24, 2009. Gain hands-on simulation experience in Quick Response Manufacturing (QRM) and Factory Physics® techniques to improve challenging office and manufacturing processes by 30% to 90%. See the actual "on the floor" metrics used to implement (and sustain) practical application of Little's Law and entire office/ manufacturing cells. Learn More

The bell for the next round is about to ring, so that is all we have time for now. See you after the next round!
Jim McCarthy is President and Owner of Product Ventures, Inc., a consulting company for World Class office & manufacturing improvement. He is a certified Lean master, 6 Sigma Black Belt, Lean/Six Sigma Practitioner, Lean Office practitioner, and Quick response Manufacturing (QRM) Implementer. mccarjfm@aol.com - See also www.linkedin.com for James F. McCarthy

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Using Ergonomics as Building Blocks for Reducing Work Injuries
When most of us hear the term “ergonomics,” we think of automated equipment and dollar signs. Misconceptions abound. By definition, “ergonomics” is the study of work and how that work interfaces with the human body.

A commonly asked question is: when should a company intervene and seek change? Employers typically seek change when: they see multiple employee injuries on one line or in one department, the same employee reports a repeat injury, or companies act on employee complaints prior to a recordable injury. Frequently, with the implementation of ergonomic interventions, there is a simultaneous increase in productivity, quality, and workplace morale.

Whenever a worker sustains an injury, the employer is left without a member of the production team. This translates into expense. Latest research reports that lost work days contribute to company losses up to seven times greater than medical expenses alone. Ergonomic consultants make great head-way in returning injured workers to regular jobs , via interventions that not only facilitate decreased risk to the current injured worker, but also help to minimize future injuries. By implementing changes, ergonomic consultants can take a moderate to heavy category job and make it less physically demanding. In turn, by reducing the job’s physical demands, employees are able to return to normal job duties, even while remaining under medical care.

When considering implementation of ergonomic changes in the work environment, two ergonomic concepts are basic and critical:

REST: Rotation schedules are an excellent low-cost intervention to regiment rest for body muscle groups. Before engaging a rotation schedule, employers should carefully think out a rotation road map. Simply moving an employee down the production line to combat work task monotony is not usually the best rotation plan. Clearly, analysis is required of the physical job demands in each rotating position, identifying what muscle groups are working the hardest at each workstation. The subsequent rotation an employee is assigned should have physical demands that are dissimilar to the previous rotation. Employers should minimize sustained standing; when appropriate, employers should offer employees the choice to sit or stand at a workstation. If space of safety does not allow sitting, employers might consider providing a raised floor platform to enable employees to rest one foot at a time, thereby relieving pressure on the musculature of the low back.

LIFTING: When designing jobs, the “ideal lifting condition” should be the goal. However, sometimes there simply is no other way to safely lift than to add equipment (such as an overhead lift), especially if the load is very heavy or bulky. Occasionally, a type of hydraulic lifting device is necessary to keep loads at the same level. Sometimes just re-arranging the lift itself can provide solutions. Employers should insure that the work area is clear of obstacles and large enough to allow the employee to comfortably navigate around the loads to be lifted. When lifting, employees should be educated to always keep the item lifted between hip and mid-chest height. This strategic lifting zone decreases compressive forces on the low back and also reduces worker whole-body fatigue. Employers should talk with suppliers, requesting a reduction in the weights and dimensions of boxes/bags required in the production process. With packing on the line, consideration should be given to designing the workstation so that an employee is not bending at the waist greater than 20 degrees for any extended period of time. If possible, employers should arrange the workstation area so that twisting at the trunk, while lifting, is not possible. This may involve adding some distance to force employees to take a step or rearranging the actual layout of the workstation. Employers should also consider minimizing reaches greater than 14 inches from the body, as reaching while lifting increases low back stress.

Where to start? Begin with a baseline assessment of any problematic jobs, which can be done with an in-house safety team or with the assistance of outside ergonomic consultants. Use of a customized checklist (that best fits the company’s needs) is beneficial and expedites the process. Finally, based on subsequent assessment findings and review of data (i.e., injury reports, worker complaints, and the number of workers exposed), an informed decision can be made to affect the greatest amount of change. Options to tackle the problem will be many; the goal is to achieve effective results in the most cost effective manner.
<img src="http://www.mfrall.com/newsletter/authorpics/SueMilholland.jpg"align="left">Sue is part of the Encore Unlimited Ergonomic team focusing on Employer Ergonomic solutions, specifically in an industrial setting, to decrease risk in the Workplace. To reach Sue, contact 715-343-1500. Encore’s website is www.encoreunlimited.com.

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Employers cut 1,600 jobs in May; smallest job loss in nine months
Minnesota employers cut 1,600 jobs in May, the smallest monthly loss since August 2008, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED). Over the past year, the state has lost 3.4 percent of its jobs, compared with job cuts nationwide of 4 percent.

The Minnesota unemployment rate edged up slightly from 8.0 percent in April to a seasonally adjusted 8.2 percent in May. The U.S. rate for May was 9.4 percent.

"It is not yet clear if we have reached a turning point in our economic recovery, but there are some optimistic signs," said DEED Commissioner Dan McElroy. "We are encouraged that the unemployment rate has held steady in recent months and that the pace of job losses appears to be slowing."

For the first time in two years, the construction sector added jobs, mainly because of new employment in highway construction and specialty trades. Construction gained 900 jobs during the month. Other sectors that added jobs were leisure and hospitality (up 7,100), government (up 800), financial activities (up 200), and education and health services (up 100). One sector, other services, held steady.

Job losses in May occurred in trade, transportation and utilities (down 7,000), manufacturing (down 2,100), information (down 700), logging and mining (down 600), and professional and business services (down 300).

Over the past year, education and health services gained 19,700 jobs, while government added 2,600 jobs.

Job losses occurred over the past 12 months in manufacturing (down 34,800), professional and business services (down 30,600), trade, transportation and utilities (down 24,500), construction (down 16,500), leisure and hospitality (down 4,900), other services (down 2,100) information (down 1,800), financial activities (down 1,700), and logging and mining (down 1,300).

In the state's Metropolitan Statistical Areas, over-the-year job losses occurred in the Minneapolis-St. Paul MSA (down 3.5 percent), Duluth-Superior MSA (down 3.7 percent), St. Cloud MSA (down 1.3 percent) and Rochester MSA (down 0.3 percent).

For more information Click Here
The Minnesota Department of Employment and Economic Development (DEED) is the state’s principal economic development agency, with programs promoting business recruitment, expansion and retention; workforce development; international trade; and community development. The agency’s mission is to support the economic success of individuals, businesses, and communities by improving opportunities for growth.

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