lean manufacturing's unexpected windfall: a lower carbon footprint

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Tuesday March 26, Session 10311 Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint Charles M. Cohon, CEO www.primedevices.com

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Lean manufacturing, also known as the Toyota Production System, is more than just a way to make your company more profitable, meet competitive challenges, and achieve sustainable competitive advantage. It also lowers your company's carbon footprint. Presented at ABB's Automation and Power World 2013, this presentation describes the ways that Lean Manufacturing can make your company not only more efficient, but also a better corporate citizen.

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Page 1: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

Tuesday March 26, Session 10311

Lean Manufacturing's Unexpected

Windfall: A Lower Carbon Footprint

Charles M. Cohon, CEO

www.primedevices.com

Page 2: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

2

�Make my company more profitable.

�Help my company meet competitive threats.

�Achieve sustainablecompetitive advantage

Lean usually is a way to:

Page 3: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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�Make my company more profitable.

�Help my company meet competitive threats.

�Achieve sustainablecompetitive advantage

But not for today!

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Today Lean is a way to:

�Reduce my company’scarbon footprint.

�Reduce my industry’scarbon footprint.

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Page 129

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“Consider the waste of overproduction, for example. It is not an exaggeration to say that in a low-growth period such waste is

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“Consider the waste of overproduction, for example. It is not an exaggeration to say that in a low-growth period such waste is a crime against society more than a business loss.”

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Agenda

�FNGP Seal & Gasket recast from Lean Manufacturing to Green Manufacturing

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�Transition from Batch & Queue to Single Piece Flow

Agenda

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�Two examples from Lean Thinking

�Lantech

�Wiremold (power strips)

Agenda

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�Reduce my company’scarbon footprint?

�Reduce my industry’scarbon footprint?

What are the traditional ways to:

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�Commuting�HVAC systems�Industrial processes (ovens to fork lift trucks)

Atmospheric emissions

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�Duplicated servicesTwo airlines that fly halffull planes from O’Hareto Wichita may decide to code-share.

Atmospheric emissions

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�Sewage�Industrial processes�Underutilized plating operations may be consolidated.

Wastewater emissions

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�From lights and HVAC�From industrial processes

�A lean manufacturer can speed the exit of high-consuming operations.

Power Gen. Emissions

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FNGP (seal & gasket mfr.) Ligonier, Indiana

12002300Feet2 utilized

60055Units/worker/mo.

321Workers

Mo. 40

1,800Mo. 1

1,155

Source:Lean Thinking,Womack and Jones

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Page 18: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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Feet2

Units/wkr./mo.

213Workers

Mo. 40Mo.40

Not Green Company

Green Company

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How does this reduce the Lean Company’s

carbon footprint?

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�Commuting

Atmospheric emissions

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�Sewage

Wastewater emissions

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Page 23: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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23001200Feet2

Units/wkr./mo.

Workers

Not Green Company

Green Company

Page 24: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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How does this reduce the Lean Company’s

carbon footprint?

Page 25: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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�HVAC systems

Atmospheric emissions

Page 26: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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�From lights and HVAC

Power Gen. Emissions

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Page 28: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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Feet2

600Units/

wkr./mo.

+2Workers

Mo. 401,200

Not Green Company

Green Company

Page 29: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Page 30: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

120030

Feet2

Units/wkr./mo.

Workers

Not Green Company

Green Company

2300 1200+800

33+2

2000

Page 31: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

Green Company

31

23002000Feet2

55600Units/

wkr./mo.

213+2Workers

Mo. 401,155

Mo.401,800

Not Green Company

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How does this reduce the this industry’s

carbon footprint?

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�Commuting�HVAC systems�Industrial processes (ovens to fork lift trucks)

Atmospheric emissions

Page 34: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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�Sewage�Industrial processes

Wastewater emissions

Page 35: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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�From lights and HVAC�From industrial processes

Power Gen. Emissions

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The Lean Manufacturer accelerated the exit of a

high-consuming operation

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Batch & Queue

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V C W P

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V C W P

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V C W P

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V C W P

Productive Work

Page 42: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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Raw Material Work In Process (WIP) Finished

Goods

Excess Carbon Footprint

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Excess Carbon Footprint

�Early/unneeded emissions

�Damage to inventory

�Repair & scrap costs

�Complex mfg. requires MRP and/or ERP

�Bar codes and/or RFID

�Data center costs

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�Obsolescence

�Rust and dust

�Warehouse, racks, warehouse personnel, fork lift trucks, etc.

Excess Carbon Footprint

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�Intermittently defective work can be hidden by excess inventory.

Excess Carbon Footprint

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V C W P

Page 47: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

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V C W P

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�Defects repeated across an entire batch.

Excess Carbon Footprint

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V C W P

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V C W P

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Single Piece Flow

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V C W P

Single Piece Flow

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V C W P

Single Piece Flow

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V C W

Single Piece Flow

P

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V C

Single Piece Flow

PW

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V

Single Piece Flow

PWC

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Single Piece Flow

PWCV

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PWCV

Preventing Defective Batches

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PWCV

Preventing Defective Batches

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WCV P

Preventing Defective Batches

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CV PW

Preventing Defective Batches

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V PW

Preventing Defective Batches

C

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We never have the time to do it ________ but we always find time to do it ________

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We never have the time to do it rightbut we always find time to do it ________

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We never have the time to do it rightbut we always find time to do it over.

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…But as that department grew and became more important and more strikingly valuable, we began to ask ourselves:

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“We have a large salvage department, which apparently earns us twenty or more million dollars a year…But as that department grew and became more important and more strikingly valuable, we began to ask ourselves:‘Why should we have so much to salvage? Are we not giving more attention to reclaiming than not wasting?…’ ”

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“…Our studies and investigations to date have resulted in the savings of 80,000,000 pounds of steel a year that formerly went into scrap and had to be reworked with the expenditure of labor…of upward of two thousand men.”

1926

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Henry FordToday and Tomorrow, 1926

page 98

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Lantech Stretch Wrapping Machinery

�Disaggregate cutting, welding and painting departments

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LantechManufacturing Cells

V C W P

V C W P

V C W P

V C W P

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Lantech (4 Years)

�Defects/machine from 8 to 0.8

�Lead time went from 16 weeks to 14 hours.

�End to expediting

�End to MRP/ERP

�Mfg. space cut in half

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Wiremold (power strips)

�Inventory substituted for machine maintenance

�Inventory substituted for planning.

�Massive back orders tied up Customer Service

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�Guaranteed no lean-related firings in exchange for union cooperation.

�Co-location on factory floor

Wiremold (power strips)

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�Make cord sets as needed.

�Customer service only touches an order to enter it.

�Shipping quickly and completely, so no backordering and no expediting.

Wiremold (power strips)

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Wiremold (5 years)

�Customer service department:

�Smaller

�Cut order entry from 1 week to less than 1 day

�Errors from 10% to under 1%

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Wiremold (5 years)

�Manufacturing

�Manufacturing space cut in half

�Annual Productivity Growth 20%

�Inventory turns 3.4 to 15.0

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The Drill vs. The Hole

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The Hole: Lower Carbon Footprint

The Drill: Lean Thinking

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2300 230012002300Feet2

55 5560055Units/

wkr./mo.

21 21321Workers

Mo. 11,155

Mo. 401,155

Mo.401,800

Mo. 11,155

Not Green Company

Green Company

Page 82: Lean Manufacturing's Unexpected Windfall: A Lower Carbon Footprint

Tuesday March 26, Session 10311

Lean Manufacturing's Unexpected

Windfall: A Lower Carbon Footprint

Charles M. Cohon, CEO

Prime Devices Corporation