October, 2006

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Article Index

Mereen-Johnson Machine: Teaching an Old Dog New Tricks
Article by: Justin Dorsey
At the turn of the century - not the twenty first, but the twentieth century -- Minneapolis was still a lumber town. Only the last vestiges of the vast evergreen forests to the north remained. Over time, the local timber barons followed James J. Hill west to the even bigger timber of Oregon and Washington. One local mill stayed and ventured into manufacturing castings for the milling industry, Mereen-Johnson Machine Company.
Was Jack Welch Wrong?
Article by: Lynn Moline & Mike Braun
About the time the economy imploded under the combined weight of the 9/11 tragedy, the burst of the dot.com bubble, and the Enron debacle, Jack Welch retired from General Electric. Welch was a prominent if not revered figure in American business. Most business leaders were familiar with his books and with stories of his leadership philosophy. While Welch's mark continues to be felt in American business, is his philosophy still relevant in a world where all the rules seem to have changed?
Using Collective Intelligence to Test New Ideas
Article by: Rod Greder
It is said that the camel is a horse designed by a committee. Needless complexity, internal inconsistency, and no unifying vision result in a product created by "too many cooks in the kitchen."
How Manufacturers Can Increase Sales with Their Telephone
Author Unknown
In this day and age, more and more business is conducted over the telephone. And yet, the telephone is a tool that many business owners shy away from when it comes to introducing their company or developing new customers.
New Division of Manufacturers Alliance: Medical Alliance
Article by: Manufacturers Alliance
The Manufacturers Alliance announces the Medical Alliance, a new division of our organization specifically for medical device manufacturers. In response to a significant number of medical device members, we have elected to offer training and additional resources to support the medical device industry.
COMPLIANCE NEWS NOTES: STORING MATERIAL SAFETY DATA SHEETS
Article by: Vija Kelly
OSHA regulations require that all employee medical records be retained for the duration of employment and thirty years beyond. This requirement may be found in 29 cfr 1910.1020. This section of the OSHA code deals with access to medical records. What follows are some relevant paragraphs in this section.
Who are your supervisors?
Article by: Gregory Peters
On October 3, 2006, the National Labor Relations Board (NLRB) issued three decisions clarifying the definition of a "supervisor" under the National Labor Relations Act (NLRA). As a result of this clarification, the number of "lead persons" qualifying as supervisors under the NLRA is likely to expand. This expansion has a number of legal ramifications for manufacturers.
5S for Service Organizations and Offices: A Lean Look at Improvement
Article by: John Hehre
Lean Manufacturing tools and principles are at last making inroads into offices. As the economy continues to grow globally, eliminating waste becomes increasingly essential in those organizations in which primary value adding activities are performed in offices.
Value Stream Mapping or Value-Added Flow Analysis
Author Unknown
Value Stream Mapping (VSM), as described in Learning to See (LTS) by Shook and Rother, is a simple tool that is helpful to operation managers, engineers, team members, and others. VSM is used to understand the current process flows and to help guide managers and others through the analysis necessary to improve these existing flows and design better ones in the future. It is a tool to help people look at value streams rather than discrete operations.
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Mereen-Johnson Machine: Teaching an Old Dog New Tricks
At the turn of the century - not the twenty first, but the twentieth century -- Minneapolis was still a lumber town. Only the last vestiges of the vast evergreen forests to the north remained. Over time, the local timber barons followed James J. Hill west to the even bigger timber of Oregon and Washington. One local mill stayed and ventured into manufacturing castings for the milling industry, Mereen-Johnson Machine Company.

While Mereen-Johnson no longer forges its own parts, it still makes customized - albeit highly computerized - machinery for the wood-working industry. Mereen-Johnson occupies 50,000 square feet across from the old Soo Line's Humbolt Yard. While its exterior facade evokes images of a roundhouse, looks can be deceiving. Inside is a state-of-the-art Lean Manufacturing facility complete with clearly delineated work cells, separate color-coded loading stations for work-in-progress and completed parts, a completely reconfigured through-process to minimize wasted travel of parts or workers, and a manufacturing support staff in the shop floor's center.

None of these improvements came easily or overnight, however, nor are they complete. Jim Bartholomay, Director of Manufacturing, says that the Lean Manufacturing process that began about three years ago, initially encountered a lot of resistance.

Bartholomay says, "We are a union shop, so it would be easy to attribute the resistance to change to that. But we also have a non-union facility in Webster, South Dakota. And they were as resistant to changes as our folks here."

Company leaders developed the idea of laying the floor-plan blueprint over a piece of sheet metal - and then letting the operators play around with different physical orientations by cutting magnets to size and gluing paper illustrations of our work-cell machines onto them.

"It slowly caught on and now we get an incredible amount of input about how best to configure a new cell," Bartholomay says.

Because Mereen-Johnson manufactures "big" machines, one wonders about its survivability in the face of the offshore onslaught of tooling and dies. Surprisingly, the company hasn't felt that competition directly. Jim Bartholomay theorizes that it's because Mereen-Johnson manufactures primarily customized machinery. As he says, "Where we see the China factor the most is in parts that require mass production. But, that isn't us. For instance, we're currently building a single 'door-sizer' for a client in Texas. We've been working on it for three months. While we've made 'door-sizers' since the 1950's, each one is built to the client's specific requirements - and subsequent tweakings. So, it really wouldn't make sense for the client to go to China to have it made." While Mereen-Johnson didn't develop its China-antidote purposefully, it does recognize the effectiveness of manufacturing customized machinery and plans to continue emphasizing this "customization."

Its current product line includes dovetail saws, ripsaws, molders, feeders, equalizers, door sizers, and single or double end tenoners. It services just about any manufacturer of wood products, though the main clients are cabinet, window, door, and floor manufacturers. The big Minnesota window and door manufacturers are long-standing clients.

While times are good now, they weren't always. The 9/11 tragedy was a near fatal shock to the company. In fact, that's what precipitated the company's conversion to Lean. To help Bartholomay make the shift, he turned to the Manufacturers Alliance (MA). To inculcate his staff, he has had the MA present various Lean seminars. More personally, the Director of Manufacturing has found solace and reinvigoration from the MA's Leaders Alliance. A hundred-year-old company has plenty of entrenched turfs.

At times, Bartholomay has found the conversion challenging. But, the MA recharges him. "I always take away something from the meetings," he says. "Because we build custom machinery, some of the Lean processes do not apply to what we do. But, there's always something that does. Let me put it this way. I truly believe that I could not have weathered the transformation of our manufacturing processes without the support of the MA and its members. I am a true believer."
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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Was Jack Welch Wrong?
About the time the economy imploded under the combined weight of the 9/11 tragedy, the burst of the dot.com bubble, and the Enron debacle, Jack Welch retired from General Electric. Welch was a prominent if not revered figure in American business. Most business leaders were familiar with his books and with stories of his leadership philosophy. While Welch's mark continues to be felt in American business, is his philosophy still relevant in a world where all the rules seem to have changed?

Fortune magazine took up the debate in an article published this past summer and dared to challenge Welch. A Welch mantra is that bigger is better due to economies of scale and the ability to dominate supply chains. Today, however, many believe that agility can trump size, especially when it comes to reacting quickly to market changes. In addition, smaller companies are in a better position to partner with suppliers and create alliances that free up capital and allow them to maintain competitive advantage by focusing on their core competencies.


Welch is also known for his belief that creating shareholder value is the purpose of a corporation. To be sure, shareholders expect a return. But the push to show earnings growth quarter after quarter led to abuses that ultimately gave us Sarbanes-Oxley. It also caused more than a few companies, likely some in Minnesota, to squeeze capital investment, thus making the numbers in the short-term but eroding profitability over the long haul.

Another of Welch's marks on business was his evangelical zeal for Six Sigma. Indeed, GE made significant increases in operating margins using Six Sigma. Nonetheless, many companies have never been able to produce similar results. Fortune asserts that this is because Six Sigma is inwardly focused at the expense of innovation. However, just because some companies take their eye off the ball while working on process improvement is not a credible indictment of process-improvement efforts. Still, it's valid reminder in and of itself that no tool by itself is ever a panacea.

Finally, no discussion of Welch would be complete without mentioning his practice of ranking employees to separate the mere good performers from the superstars. Many business leaders adopted this philosophy, but the practice often backfired. Quoting a study by Rutgers and the University of Connecticut, Fortune pointed out that ruthless ranking causes employees to distrust their employers and to lose commitment. It's hard to maintain a nimble, competitive edge when no one, top players or otherwise, wants to help.

So, was Welch wrong? Have times changed so much since his retirement that his philosophies are outdated? It depends on why and how well they are applied. Blind, zealous adherence to any particular belief leads to trouble. Discounting Welch's ideas, however, is not the answer. As the global economy continues to evolve and transform, it makes sense to take into account tried-and-true philosophies, make thoughtful use of new ideas, and to use a large dose of common sense. These qualities ultimately lead to sustainable success.
Lynn Moline, owner of Lynn Moline Associates, Inc., is a consultant and trainer who specializes in executive development, executive team alignment, and planning. Mike Braun is a partner at CLG, a company that provides behavior-based strategy execution and performance improvement services.

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Using Collective Intelligence to Test New Ideas
It is said that the camel is a horse designed by a committee. Needless complexity, internal inconsistency, and no unifying vision result in a product created by "too many cooks in the kitchen."

That's not to say that groups don't have value in the designing and testing of new products. In fact, assessing the value and potential of an idea and shaping it into a successful offering is done most effectively by a group. It all depends on the nature of the group and how it came together.

Wisdom of Crowds
In his 2004 book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, James Surowiecki argues that decisions made by groups often produce a better result than those made by one individual. While this may be obvious, there are many examples of group decisions and groupthink that have had catastrophic outcomes.

The Bay of Pigs fiasco, the rise of Nazism, and the burst of the dot.com bubble occurred because the conditions that make a crowd "smart," did not exist. There are four conditions, as cited by Surowiecki.

In order for crowd wisdom to work, Surowiecki says, the following criteria are necessary:
"Diversity of opinion – an individual has access to information wherever he or she can get it."
"Independence – a person's opinions are not determined by others in the group."
"Decentralization – an individual is able to analyze and use local knowledge to independently form opinions."
"Aggregation – an objective process exists for turning individual judgments into a collective decision."

Collective Intelligence
Studies show the accuracy of feedback on new product concepts is improved when a group is formed with intention and foresight. A Collective Intelligence Quotient (CIQ) could be used as a tool to assemble a "high potential" group for ideation and problem-solving. It would blend the appropriate diversity and level of competence to provide a vigorous test of an idea and to avoid groupthink.

The approach that the group uses to collect and synthesize feedback is also important. When people are asked, "Which concept do you think will be successful?" their answer will be different than if they are asked, "Which concept do you like or which one would you buy?" When people have the opportunity to express an opinion regarding the outcome, the collective wisdom or aggregate opinion tends to be more accurate. In other words, when people are asked to be detached, rather than to give their subjective desire, the feedback tends to be unbiased.

Other general rules that improve the quality of group decisions are:

  • Form groups that have members from differing hierarchies.

  • Use Delphi or other anonymous methods, where identity of group members is unknown, to avoid the "bandwagon" and "halo" effect that can sway group results.

  • Allow each individual to access as much external information as possible.

  • Ensure the group is not too centralized or bureaucratic, not too divided so communication is hampered or too imitative such that earlier decisions restrict people's future choices, often called information-cascading.

  • Use a facilitator. Groups guided by a competent facilitator have been shown to achieve better decisions than groups not guided by a facilitator.


Open Innovation/Co-Development
Co-development and open innovation describe the process in which many participants (such as vendors, employees, and customers) are intimately engaged in developing and testing new ideas. The Product Development and Management Association, www.pdma.org, is hosting an entire conference focused on the topic of co-development in January 2007.

The worldwide web is also reshaping how human beings create, exchange ideas, and succeed in product development, as well as in politics, media, and society. Wikipedia and Digg.com are examples of joint input and collaboration models using collective intelligence to shape knowledge bases and influence what is considered important.

Yet, one question still remains. If the camel is a poorly designed horse, then what was the platypus intended to be, and what dysfunctional committee designed it?
Rod Greder, Ph.D. founded Breakthrough Forum, an innovation dialogue and accountability group, for product developers and marketers to tap the collective intelligence of their peers who have been there and done that. rgreder@improveproducts.com, (763)443-1531.

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How Manufacturers Can Increase Sales with Their Telephone
In this day and age, more and more business is conducted over the telephone. And yet, the telephone is a tool that many business owners shy away from when it comes to introducing their company or developing new customers.

Cold calling and prospecting can be an inexpensive and effective way to reach out to new customers or follow up with potential customers. Here are some telephone sales techniques you should be aware of.

Speak clearly and loudly - There is nothing worse than talking on the telephone with someone that you can not hear or understand.

Get to the Point - Your prospective customer is likely a very busy person. While you do want to be personable, you should stay on task and avoid keeping the customer on the phone for a long period.

Try not to make your conversation one sided - All too often the caller does all the talking and forgets to listen. The purpose of the call is to try and engage in a conversation, asking questions like, "How long have you been in business? How many different products do you manufacture? How many services do you provide?" Questions like these help the person on the other end of the line loosen up and begin sharing information about their company.

You should prepare a script before getting started - Not so much to read word-for-word, but to provide some talking points. The last thing you want to do is sound like an annoying telemarketer. You know... the ones that call you at dinner time and read from a script until you interrupt them!

Be prepared for rejection - Do not be upset if the prospect says he does not have time to talk to you or he has no need for your product/service. Project managers and engineers are always busy, and if they say they have no need they are saving you time as well. It's a numbers game: dial the next number.

After you have found someone who has a need - let them know you would like to send some information and then follow up with another phone call in a week or so. Another good tactic is to get their email address so you can send a quick note thanking them for the time they spent with you and provide a link to your website.

If manufacturers would spend just a couple of hours a week using these telephone techniques they could not help but bring in new business. I know on thing for sure - the more time I spend on the phone, the more business I tend to get.
Author Unknown

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New Division of Manufacturers Alliance: Medical Alliance
The Manufacturers Alliance announces the Medical Alliance, a new division of our organization specifically for medical device manufacturers. In response to a significant number of medical device members, we have elected to offer training and additional resources to support the medical device industry.

Other offerings include Quarterly Educational Programs where you may hear from a panel of local medical device professionals on clinical trial issues. Topics for the programs will vary and your input on future topics is encouraged. Join us at the upcoming program, Reimbursement Fundamentals in Clinical Trials, on Tuesday, November 14 from 8:00 - 10:00 a.m. at Boston Scientific CRM. Member companies may send up to four people free of charge. We have also introduced a series of Clinical Workshops taught by experienced practitioners that include: Clinical 101 - Boot Camp for Clinical Professionals, Introduction to Clinical Trials Terms and Concepts, Clinical Trial Database Basics, and Keys to Ensuring Clinical Trial Quality. All workshop attendees will receive a certificate of attendance that may be redeemed for C.E.U.s. To learn more, please visit www.mfrall.com and click on Medical Alliance.

Other new resources include the Medical Alliance newsletter, an expanded annual Compensation & Benefits Survey, and job postings for clinical professionals on our website. Thank you for making 2006 a great year! We look forward to seeing and hearing from you at the next Educational Program.
The mission of the Manufacturers Alliance is to provide peer-to-peer training, education, and resources which inspire manufacturing companies to continuously grow, improve, and stay competitive.

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COMPLIANCE NEWS NOTES: STORING MATERIAL SAFETY DATA SHEETS
OSHA regulations require that all employee medical records be retained for the duration of employment and thirty years beyond. This requirement may be found in 29 cfr 1910.1020. This section of the OSHA code deals with access to medical records. What follows are some relevant paragraphs in this section.

First, the MSDS as a medical record is specifically covered in:

  • 1910.1020(c)(5)(iii) Material Safety Data Sheets indicating that the material may pose a hazard to human health;

  • 1910.1020(c)(4) "Employee" means a current employee, a former employee, or an employee being assigned or transferred to work where there will be exposure to toxic substances or harmful physical agents.

  • 1910.1020(c)(8) "Exposure" or "exposed" means that an employee is subjected to a toxic substance or harmful physical agent in the course of employment through any route of entry (inhalation, ingestion, skin contact, or absorption, etc.), and includes past exposure and potential (e.g., accidental or possible) exposure, but does not include situations where the employers can demonstrate that the toxic substance or harmful physical agent is not used, handled, stored, generated, or present in the workplace in any manner different from typical non-occupational situations.


1910.1020(c)(13)(iii) "Toxic substance or harmful physical agent" means any chemical substanceĀ…or physical stress (noise, heat, cold, vibration, repetitive motion, ionizing and non-ionizing radiation) which is the subject of a material safety data sheet kept by or known to the employer indicating that the material may pose a hazard to human health.

Thus, when an MSDS is used as an employee exposure record, it must be maintained for the thirty years.

What kinds of substances might require exposure monitoring? Simply put–those that may have long-term or chronic health effects.

Substances that are defined as "irritants" cause temporary pain or discomfort and, generally, the symptoms are reversed when exposure to the substance ceases.

However, chronic exposure to an irritant could cause a more serious situation to arise–occupational dermatitis, for example. In general, this would show up well before the thirty-year time line. "Corrosives" cause permanent tissue damage. The impact, however, is immediate. Corrosives such as chromic acid contain ingredients that are toxic and thus need to be considered under this rule.

As long as the substance continues to be used unchanged in your operation, keeping the MSDS is not a problem. It is required. The problem is with obsolete MSDSs.

The following paragraph in this section of the regulations provides an alternative:

1910.1020(d)(1)(ii)(Material Safety Data Sheets and [other] records concerning the identity of a substance or agent need not be retained for any specified period as long as some record of the identity (chemical name if known) of the substance or agent, where it was used, and when it was used is retained for at least thirty years.

Keeping a file of information on substances no longer used in this manner seems to many a lot more efficient. This type of information could be kept in an electronic storage format and added to as necessary.
<img src="http://www.mfrall.com/newsletter/authorpics/vijakelly.jpg"align="left">Hazard Management is a consulting and training firm specializing in occupational safety and hazardous waste management. Call Vija Kelly at 651-697-0422 for more information.

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Who are your supervisors?
On October 3, 2006, the National Labor Relations Board (NLRB) issued three decisions clarifying the definition of a "supervisor" under the National Labor Relations Act (NLRA). As a result of this clarification, the number of "lead persons" qualifying as supervisors under the NLRA is likely to expand. This expansion has a number of legal ramifications for manufacturers.

For instance, supervisors have no right to organize under the NLRA and may not be included within a bargaining unit with regular employees. Furthermore, supervisors have a duty of loyalty to their employer, who is faced with organizing and other union activities.

Two of the NLRB's cases involved the question of whether charge nurses in healthcare facilities were supervisors: Oakwood Healthcare, Inc., 348 NLRB No. 37 (9/29/06); and Golden Crest Healthcare Center, 348 NLRB No. 39 (9/29/06). A third case addressed the same question with respect to lead persons in an aluminum and vinyl door and window manufacturing facility: Croft Metals, Inc., 348 NLRB No. 38 (9/29/06). In Oakwood, the lead case, the Board conducted a detailed legal analysis of the meaning of the term "supervisor" as defined under Section 2(11) of the NLRA. Section 2(11) basically provides that an individual is a supervisor if: (1) he/she has authority to perform any of twelve listed supervisory functions; (2) he/she exercises that authority through the use of "independent judgment"; and (3) he/she holds that authority "in the interest of the employer."

In Oakwood, the NLRB focused on two of the twelve supervisory functions listed in the statute: the authority to "assign" other employees, and the authority "responsibly to direct" other employees. The Board determined that the authority to "assign" employees means the act of "designating an employee to a place (such a location, department, or wing), appointing an employee to a time (such as a shift or overtime period), or giving significant overall duties, i.e., tasks, to an employee . . ." The Board held that the authority "responsibly to direct" means: (1) a person has "men under him," and decides "what job shall be undertaken next or who shall do it," and (2) is accountable for the performance of such jobs, (and thus may suffer adverse consequences for their poor performance).

In addition to clarifying the nature of these two supervisory functions, the Board also clarified the definition of the term "independent judgment," as meaning that a person must act, or effectively recommend action, free from control of others, and must do so based on his/her forming an opinion, or by performing an "evaluation by discerning and comparing data." In other words, to be a supervisor, an individual must not only have authority to perform one of the listed supervisory functions, but must also use his/her individual judgment in evaluating work situations to decide how to exercise that authority.

In the cases decided, the Board held that some of the charge nurses were supervisors, because they exercised independent professional judgment in assigning other registered nurses to certain patients or to perform certain nursing tasks. Other charge nurses were not supervisors, because although they might direct other nurses, they were not "responsible" for the tasks, and did not suffer consequences for poor performance from the nurses they directed. With respect to the window and door production lead persons, the Board found that although they "responsibly direct" other employees, their decisions involved matters so routine that no meaningful "independent judgment" was required. Thus, they were not defined as supervisors.

Employers should be aware that these recent NLRB cases will likely result in a reclassification of some employees to supervisory status, particularly those employees in lead person roles. As a result of these decisions, employers are advised to take the following proactive steps:

  1. Employers may want to consult with their labor law attorney, and review the job duties of these employees, to determine if they now qualify as supervisors. Understanding who is, and is not, a supervisor is important because these "new" supervisors have the authority to create binding obligations for a company, and their actions can result in liability.

  2. Employers who are either currently involved in or vulnerable to a union organizing campaign are advised to carefully evaluate their lead persons' job duties and responsibilities to determine supervisor status and their ability to participate in a NLRB sponsored election.

  3. Unionized employers with lead persons who may now qualify as statutory supervisors should consider filing a unit clarification petition to remove any questions as to their appropriate classification.

  4. Employers should provide supervisory training to individuals who are newly reclassified as supervisors under the three NLRB decisions.


Taking the above proactive steps will ensure that any changes in supervisor status will occur in a smooth, clearly defined manner, which will ultimately benefit the functioning of the company.
Gregory L. Peters, is an attorney with Seaton, Peters & Revnew, P.A. whose practice is limited to representing employers in labor and employment matters. Mr. Peters has worked with companies in all areas of employment counseling, employment litigation, labor arbitration, union organizing and labor negotiations. Mr. Peters can be reached at (952) 921-4607.

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5S for Service Organizations and Offices: A Lean Look at Improvement
Lean Manufacturing tools and principles are at last making inroads into offices. As the economy continues to grow globally, eliminating waste becomes increasingly essential in those organizations in which primary value adding activities are performed in offices.

The book 5S for Service Organizations and Offices: A Lean Look at Improvements, by Sarkar Debashis provides a blueprint for effective organizing and consistency in larger firms. Five-S, as many business leaders know, is based on the Japanese methodology for workplace organization. The five-step technique to change the mindset of staff and involve the whole organization has become increasingly popular in recent years.

The five S's loosely translated are as follows:

  • Sort

  • Systematic arrangement

  • Spic and span

  • Standardize

  • Self discipline

This particular book discusses 5S in larger organizations such as insurance companies, banks, large accounting offices, or customer service organizations, all offices in which many people perform similar work. The book provides a detailed approach to implementing 5S in these and similar organizations.

The first part of book gives an overview of 5S in office environments along with benefits to be realized if 5S is in place. In addition, there is a section on the prerequisites needed before implementation begins.

The second part provides many useful examples of implementing 5S and details how to implement each of the five steps as follows:

  1. how to get started;

  2. the importance of ensuring that all employees are on board and understand the purpose of the project;

  3. how to define performance measures and expected outcomes;

  4. how to discuss and handle typical problems that could arise.

An added benefit of the book is that templates of forms and labels, et cetera, are scattered throughout. These templates are included in a CD that comes with the book.

The last part of 5S provides advice and checklists to audit results of 5S implementation and to maintain the progress.

Overall, a small business may not find this book very useful, because the nature of small business is that a few people do a lot of different things. However, this book is right on target for larger organizations, in which many people are doing similar things. For instance, one performance measure for a larger organization could be the ability to retrieve a file in less than 30 seconds. The kinds of recommendations suggested promise to be cost-cutting, efficient, with lasting effects, and have the possibility to free up staff to be even more effective in growing healthy business.
John Hehre is a senior operations executive and provides interim management and project based consulting to mid-sized private companies in need of transformative change. He can be reached at jhehre@cprocess.com.

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Value Stream Mapping or Value-Added Flow Analysis
Value Stream Mapping (VSM), as described in Learning to See (LTS) by Shook and Rother, is a simple tool that is helpful to operation managers, engineers, team members, and others. VSM is used to understand the current process flows and to help guide managers and others through the analysis necessary to improve these existing flows and design better ones in the future. It is a tool to help people look at value streams rather than discrete operations.

VSM helps people see and document the steps of a process, whether it is in manufacturing or in the office. It identifies the processes, gathers details on cycle time (C/T), inventory or wait time, set-up time, and more. It adds information flow to and from each process. It gives a good 35,000-foot view of the process flow, which makes it easy to see where the bottlenecks and waste areas exist. Its emphasis is on understanding the process as an integral part of material and information flow. A useful analogy is to consider that a current state map is used as the basis to develop a future or ideal state map.

While the VSM provides a good map of the flow it does not reveal what is value added or the lack thereof in each process. This becomes even harder to discern in the non-manufacturing sector, in which the product may be just information or a document. VSM is system, or big-picture, focused. It is a tool designed to identify every step in an object's path across the entire system from the moment of order receipt to final product shipment.

On the other hand, as Rath & Strong's John Guaspari and Edward Hay explain in their video, Time: The Next Dimension of Quality, "value-added flow analysis" (VAFA) is a process-focused tool that digs deeper into specific process or function, that follows and documents every step, every minute of time used within the process. It forces the examination of every action or step that takes place in the process. VAFA provides the five-foot view.

At Johnson Screens we use both. It is a great way of flushing out all the steps in a process and then defining those steps that add value. There are some basic guidelines to conducting a VAFA:

  1. The golden rule that makes this so powerful is to "be" the thing in the process, witnessing it go through the process. The aforementioned video showed a document that was processed through a multitude of steps of which only three were value added. Being the thing helps you see every nuance of the process.

  2. On a sheet of paper draw a vertical line down the center. In one column document the steps. In the other the time spent on each step.

  3. At every step, ask these three questions:

    • Does this step cause a physical change in the item?

    • Does the final customer care about this step?

    • Did we do it right the first time?

    You must be able to answer yes to all three questions to add value.

  4. Now identify with a red circle the steps that add value, add up the VA time and express it as a percentage of the total process time.

It is normal for this percentage to be less than one percent! We did this for a process in one of our manufacturing plants. Starting as, "I am a piece of wire," and ending with "I am a panel," 103 steps were taken in the production of the panel. Only four were value added. That is three percent. The waste just popped from the page. In the office we did a process that had fifteen steps of which five were VA. What was even more amazing was the amount of wait time the item in the process encountered. People were doing the job not realizing the number of individual steps they had to take. This allowed the team to redesign the layout of the work area, change the way work was released to the shop, and reduce the production time by twenty-five percent.

In this process, hidden decision points are discovered that are being made on the fly and that are possibly delaying progress. The thing waits while a decision is made, sometimes having to search for the right reference or person. In the above activity that Johnson Screens analyzed, we learned that over twenty minutes was wasted simply on deciding which piece of tooling to use. It also became clear that only eighteen percent of the available tooling was being used. After integrating the new information, the needed piece of tooling can now be selected and found in less than one minute.

In summary, there is a place for both VSM and VAFA. One supports the other. The VSM gives the flow and shows some waste, but the VAFA allows the team to see the hidden steps that are assumed to be required and allow the differentiation of value added and non-value added. The integration of both VSM and VAFA in your workplace may be of greater benefit than you could possibly imagine.

To learn more about the next Value Stream Mapping (VSM) workshop Click Here.
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