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Lean Manufacturing - A Case Study
December 31, 1969 |Estimated reading time: 6 minutes
Since its inception, Celestica has been building a commitment for lean manufacturing operations by raising the level of awareness surrounding its benefits. The implementation of lean has resulted in faster cycle times, reduced costs and improved efficiencies, as well as cycle-time reductions.
By Christy Mitchell and Mario Moreno
By applying lean principles, Celestica can achieve greater simplicity and enhance its customer service - ultimately improving customers’ bottom-line benefits. This article focuses on the transformation to lean manufacturing at Celestica’s site in Monterrey, Mexico.
Fall-out from the high-tech meltdown served as the catalyst for the Monterrey facility’s move to lean manufacturing in 2002. At the time, Celestica was on a journey to establish a global manufacturing network and increase its presence in lower-cost geographies outside of North America. The transfer of high-volume printed circuit assembly (PCA) to Asia created a void in high-cost North American- and Europe-based manufacturing operations. The solution was to leverage the proximity of these sites to end-markets and transform them into centers for low-volume manufacturing and complex system assembly.
Product transfers into Monterrey resulted in a rapid increase in customers and product mix. Coping with some market challenges, these customers were looking for rapid turnaround on highly complex products. The Monterrey site, accustomed to high-volume, batch and queue SMT manufacturing, needed to adjust to the quick-turn demands of low-volume manufacturing.
Lean Team in Progress
In 2002, Celestica was in the process of rolling out lean to all of its sites. Recognizing the opportunity to make significant changes at the company’s Monterrey site, senior executives declared the facility’s move to lean manufacturing a priority. A “Lean Team” with five core members was formed. Leveraging Celestica’s best practices in world-class manufacturing (WCM) and six sigma, as well as concepts from an existing “Lean Toolkit”, the Lean Team collaborated with corporate facilitators to begin the transformation.
“Kaizen blitzes”, activity appraisals designed to affect rapid continuous improvement, were used to uncover waste and process variation. Six sigma methodologies were applied where necessary to eliminate the variation and implement process improvements. The team used value-stream mapping and Takt-and-process time data to balance the flow of work, establish buffer requirements and develop resource requirements. Knowing the process capabilities and steps required to build each product, the Lean Team and work-center operators brainstormed to re-design work-center layouts, eliminating non-value-added, or waste, activities. A two-bin replenishment system was implemented to stock line-side libraries. Batch and queue manufacturing was replaced by order-driven pull-system manufacturing. “Kanban” signal cards were used to control production and parts replenishment. The transformation had begun.
SMED
Monterrey’s successful transformation to lean would be dependent on its ability to streamline the setup process. Line changeover for low-volume and pull-system manufacturing should be fast, efficient and cost-effective - spend less time changing lines to enable more time running product; simplify processes to reduce the temptation to overproduce or create excess inventory; and achieve this using the same, or fewer, people. To do this is to accomplish the primary goal behind lean - eliminating waste.
The purpose of Single Minute Exchange of Dies (SMED) is to reduce output and quality losses due to changeovers. Developed by Shigeo Shingo, SMED uses a systematic approach to eliminate non-value-added setup activities. When implemented properly, SMED can reduce changeover times from hours to minutes.
The SMED Method
In Monterrey, a team was established and given accountability for driving setup time reduction. With SMED, there are two very important terms to remember - internal steps and external steps. Internal steps are those activities that must be performed when the equipment is off/idle. External steps can be performed in anticipation of a changeover and/or while equipment is running. The goal is to turn internal steps into external steps; reducing time spent doing both.
The team videotaped the entire setup process to record and measure the time it took to complete each step. They used the information to determine which steps could be eliminated, accelerated, re-sequenced or shifted from internal to external.
One of the most dramatic outcomes was the realization that activities such as kitting, component verification and feeder loading were being performed when machines were down. These activities, which consumed more than 70% of the time spent on changeover, could be performed minutes, even hours, before the next setup. When it came to tool readiness, they also realized that the “5S principle” of “a place for everything, and everything in its place”, as well as visual identification systems, could be used to eliminate time wasted trying to locate items.
They also started using quick-setup tooling, such as standard base plates with pre-fixed pin positions for PCB support, and activated the use of automatic nozzle changers for placement heads. Where possible, the team grouped product families with common part numbers in the same setup arrangement to enable products within the same family to run continuously without the need for feeder replacement.
Once these external steps had been improved (or removed) from the changeover process, the team focused on optimizing internal steps to achieve greater efficiency. The team created Gantt charts to track activity sequencing and links, as well as examine how the length of time it took to complete one step impacted other steps, and ultimately, the entire changeover process. Understanding the “slack” of each activity in the changeover sequence was key to balancing the workload of the setup team. The team then used methods, such as cross-training operators or changing process sequencing to optimize processes and people, and eliminate wasted time.
Efforts also were made to support production efficiency. For example, calibration of like-equipment on each line was standardized to enable the smooth transfer of work from one line to another. Mechanical and software zero points were set close in machines. Capabilities of the vision systems for part recognition were upgraded, and camera lighting was adjusted to the same intensity level. Regularly scheduled total preventive maintenance (TPM) on equipment minimized adjustments and line stops during first-article builds. Periodic Cp/Cpk checks were instituted for all printing and placement equipment to ensure accuracy within spec and reduce defects. These efforts contributed to the goal of maximizing production time.
Proof Points
SMED made it possible to reduce setup times in Monterrey. Combined with other lean initiatives, the site increased production efficiency and decreased inventory levels - particularly the levels of work in process (WIP). Increase in production capacity and efficiency was accomplished without the need for increased investment in capital or resources (Table 1). Customer-satisfaction levels increased dramatically, as did employee satisfaction.
Monterrey would have been content to simply have improved customer satisfaction and production quality. When they started, the team never envisioned the outcome. In March 2005, Celestica received the Shingo Prize for Excellence in Manufacturing - in the Business Category - in recognition of the Monterrey facility’s transfer to lean manufacturing. By using WCM strategies and practices in its transformation to lean, the site achieved what the prize determines to be measurable “world-class results” and became a model for high-mix/low-volume (HMLV) manufacturing and system assembly. While validating lean efforts, the honor reinforced the notion that time well spent is time not wasted. The Monterrey site has become a touchstone for other Celestica sites as they continue to expand lean practices.
Christy Mitchell, customer focused team director, Celestica Inc., may be contacted at (603) 890-8068; e-mail: cmitche@celestica.com. Mario Moreno, SMT engineering manager, Celestica Monterrey, Celestica Inc., may be contacted at (+52) 81 8156 1438; e-mail: mmoreno@celestica.com.