Like a race car driver who finds no value in spending time in a pit-stop, resources (machines, trucks, and highly skilled people) add no value when they are shut down for changeover. Every minute of downtime is a minute you could be producing for customers, delivering product to customers, or providing service – Adding Value. Reducing set-up or changeover time to the absolute minimum is therefore critical in Lean manufacturing, Lean warehouse, Lean construction, Lean healthcare, or any Lean enterprise.
Reducing changeover is called many different things (“Single Minute Exchange of Dies or the SMED system”, “Quick Changeover for Lean Manufacturing”, “Mold Set Reduction” or “Set-Up Reduction”), but the process is fundamentally the same. The goal is to identify the minimum number of steps that must happen while the resource (machine, truck, IT system) is shut down, and to execute those steps as quickly as possible. This shut-down time is referred to as Internal Set-Up Time or Internal Activities.
Reducing set-up time to the absolute minimum is critical in any Lean operation.
Why Quick Changeover is Important in Manufacturing, Distribution, Construction, Car Repair, Healthcare, and more
Quick changeover has been strongly identified with Lean Manufacturing and the time from making one product to the time to the next product is coming off the production line, meeting all product quality tests. Changeover steps are focused on production equipment and machinery. Tooling that can simplify and mistake proof machine set-up is often the highest level of Quick Changeover improvements. The goal is to shorten manufacturing lead time and reduce lot sizes to customer order quantities.
However, Lean Thinking and the use of Lean Six Sigma is much broader and important to so many different types of organizations.
Lean warehouses seek to get trucks in and out of the dock doors as fast as possible, to unload and load trucks faster. Internal activities are getting product off and onto trucks. External activities are all the paperwork needed to receive and load vehicles such as receiving documents and bills-of-lading.
Lean transportation companies want to keep their vehicles on the road, in the water, or in the air. They want to reduce vehicle downtime. Southwest airlines benchmarked car racing pit crews, not other airlines, to reduce their gate time. They simplified getting passengers off and on, and cleaning the airplane by enlisting the entire crew, including pilots.
Lean construction companies know their most expensive resource is often the trades-people, not equipment. Any time they don’t have the tools, equipment, materials and tools they need to do the job is lost time and increased cost. They want to reduce people downtime.
Car repair shops try to keep cars on the lift to ensure their highly skilled technicians are always working on a vehicle. External changeover steps include having the tools and parts available to the technician when they get the car up on the lift.
Lean healthcare works to keep doctors focused on the most valuable aspects of patient care (internal activities), leaving technicians and nurses to do the rest of the patient care work (external activities). Operating rooms are just like car racing pit stops with the doctor being synonymous with the driver and the technicians and nurses being like the pit crew.
We follow the four main steps of the Quick Changeover Methodology:
1. Measure: We will collect changeover data through time studies and spaghetti mapping the current state of set-ups. We have found that when teams are engaged in time studies and spaghetti mapping, they generate great ideas for improvements. In addition, some of the data-gathering effort will come from production performance metrics such as operating equipment efficiency (OEE) and first pass yield.
2. Separate: We will review each time element in the current state set-up process. We identify if it is value-added or non-value-added and if it is an external activity or internal activity. This phase will generate a list of “Great Ideas” and highlight potential non-value-added time elements that can be quickly eliminated.
3. Remove: During this critical step, internal activities (happening while the machine is off) will be evaluated to see if they can be transitioned to external activities (happen while the machine is still running). A formal set-up procedure, based on what elements of the set-up will be external and internal will be developed, practiced, and tested.
4. Streamline: Based upon the testing of our procedures, we will work to implement additional actions and create a streamlined set-up process. Updates will be made as needed and documented. Once we have fine-tuned that procedure, we can launch it across the organization and measure results.
The use of set-up scheduling optimization, to create a product wheel that will reduce the need for changeover (or cleanout) will lead to the final phase of the Quick Changeover project. We will work with planning to develop set-up scheduling guidelines for all resources to further reduce changeover times through sequencing.
The Importance of 5S Visual Management and Kanban
In the streamlining step mentioned above, 5S and Kanban are fundamental capabilities and tools to make this happen.
5S Visual Management ensures that tools are available (often labeled on pegboards), information in the system is supported by training tools such as video playbooks (the 4th S – Standardization), and movable equipment such as carts, forklifts and pallet jacks are in their designated parking spots.
Kanban is a visual inventory management system that makes sure the materials used in the process are always available, that there is an external activity to replenish this stock so the machine operator, driver, doctor or trades-person does not cause downtime retrieving this material.
Doing Quick Changeover as a Kaizen Event
Quick Changeover is often implemented as a kaizen, or rapid improvement event. Kaizens accelerate the improvement step into a few days or usually less than one week. However, it is important for all Lean practitioners to know that much of the data gathering to support a kaizen event happens in the weeks prior. Time studying and spaghetti mapping the different types of products/vehicles/operations going through the resource cannot be done in a week. However, once the data is gathered, a rapid improvement event is a great way to brainstorm and implement improvements to keep external activities external and move some internal activities to external.
Performance Measurement – The Key to Quick Changeover Sustainment
The last, and often overlooked, step of Quick Changeover is ensuring your key performance measurement system includes measures directly impacted by the improvements. The most frequently used measure is OEE – operating equipment efficiency, which is a utilization metric. This is common in manufacturing but less so in other service industries. Regardless, if the resource is important, the utilization of that resource must be measured.
Supply Velocity can help you with all aspects of Quick Changeover implementation from training to facilitating the kaizen event to setting up performance scorecards.
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“We are pleased that Essex selected Supply Velocity, Inc. as our Lean Implementation Partner. At one facility, we have saved over $350,000 in work-in-process inventory, reduced throughput time from 2 weeks to minutes and increased inventory turns 3 to 8 times per year. All these results are in just 6 months. Our return of investment is very high.”
“We used Supply Velocity to rethink our sales process. By analyzing the entire process we found wasted time in our Sales, Admin and Operations departments. Streamlining this process created extra time for each Sales Rep, allowing them to spend more time with Customers and increase the value we add. Gross profit margins are up 40%!We are now using Supply Velocity to help us rethink our entire Strategic Plan.”
“Our experience with Supply Velocity was one of the best values we have ever had from a consulting project. Cyril Narishkin brought a structured lean methodology, invaluable experience and engaging facilitation skills to help us streamline a very complex and disjointed sales order process. Just as importantly, our team now has the knowledge and process competencies to address other business improvement opportunities going forward.”
“Supply Velocity’s Lean Six Sigma System has given us new tools to help improve our sales performance. We have learned new ways to analyze our business which makes problem solving more accurate and has made us better leaders.”
“Supply Velocity is driving instrumental change in our inventory management processes. This is critical for us to be competitive in a supply chain environment with numerous disruptions. They are making change happen, which can be challenging in a 182 year old organization.”
“Anheuser-Busch Precision Printing had been implementing Lean Operations on our own for the past two years. We needed to move faster and partnered with Supply Velocity, Inc. Through Supply Velocity, Inc.’s mathematical workflow balancing and visual management tools, dramatic improvements were achieved. The entire converting operation was rearranged based on Lean principles. The result is a 20.6% productivity improvement, enabling us to operate with 23 fewer people in production.”
“Isolating a problem, finding short, and long term solutions with measurable results is what was promised and results is what was delivered by Supply Velocity. Upon launch of the Lean Six Sigma Selling System, we knew more about our customers, our products, and were able to create a solid plan to increase sales of our most profitable products. Within months of implementation, our booked sales jumped 60% and our most valued customers were getting direct, active, and calculable attention.”
“Mitch Millstein and his team helped guide our shop fabrication division in the re-layout of our custom pipe and steel fabrication facility when we moved into a new building. It is not only the results but how he helped. We were involved in every step. I personally did time studies and was able to see the non-value added steps required to manufacture in our old layout. When we created our new layout, everyone was involved, from the executive team to our direct labor force. With Mitch’s help we increased our throughput by a 3x multiple, while providing more competitive prices to our clients as a result of the efficiency improvements.This has enabled us to not only make more money but also to expand our commercial reach and serve more, and larger customers. I would recommend Supply Velocity to any company that wants to make improvement in supply chain and operations.”
“Supply Velocity gave us the tools to analyze our business and processes based on the facts and numbers versus our perceptions. Our common quote was “Let the numbers lead us”. The key for our organization was how quickly we moved from classroom to actual project initiation. We were able to jump in, start using the tools and see a difference right away.
The get-into-action approach was good for our culture.”
“Supply Velocity has provided the technical expertise and political capital to move our project forward. They have just the right amount of push and the right amount of support. Supply Velocity has helped us make real changes to improve efficiencies in logistics without jeopardizing our performance. We’re happy and our customers are happy.”
“The role of the Erie Insurance Marketing Department has been evolving over the past several years – from a support role to a more critical role of driving growth in our organization. Because of our increased workload and desire to prioritize the most critical projects, we hired Supply Velocity to teach us the skills of Lean Six Sigma.Participants included the Promotions, Market Research and Agency Licensing sections of the Marketing Department.
We learned valuable tools to help us to prioritize based on the voice of the customer.
I firmly believe these skills made a difference in how we work every day. We are moving new projects forward, eliminating or changing ineffective processes, and we are a much stronger department. We continue to use the tools to help us with our highly-complex and time-consuming projects. Supply Velocity helped us to accomplish our goals.”
“Closure Medical recently completed a major reorganization in order to enhance our ability to rapidly create innovative medical devices. We hired Supply Velocity to help us map out the process and service flows of the new organization that would maximize our product development process (PDP). In four weeks, Supply Velocity helped us envision a new PDP structure, develop measures and accountability for each step, and gain consensus within the organization. Supply Velocity’s focus on speed and accountability helped us complete a critical project in a timely fashion.”
“Your process encourages this group to work together, better communicate and have fun doing it.”
“In a time of volatile supply chain disruption, Supply Velocity is helping us develop Demand and Supply Planning processes to proactively tackle these new challenges. They are genuine partners, working with our team, facilitating and teaching.”
“Supply Velocity created visibility within our Assurance Services Group… visibility of performance, Client-service, employee satisfaction and processing time. Using the Supply Velocity System, Audit Report Cycle time is down over 50%. We are using his strategies to create greater Client loyalty.”
“C&R was struggling with labor productivity. The construction crews were often missing materials that they needed to do their work. This caused significant idle time. Supply Velocity, Inc. and C&R used value stream mapping and visual management tools to make dramatic improvements in operations. Most importantly, two years later C&R is sustaining and improving on the implementation. C&R’s return on investment was 11:1. C&R had a record year last year in both sales and profits and would not have been able to pull it off without the changes Supply Velocity, Inc. helped us make.”
“We engaged with Supply Velocity to help us embed process improvement at all levels of the business. Our team learned from Mitch to let the data drive decisions, to use Lean tools to help us see our processes critically and objectively, and to create a control plan to manage all of the tasks that were the outcome of the data study.The project turned out to be very significant to the company and most importantly, our customers. We reduced our customer wait times by 40%, and cut in half the labor cost to fulfill customer orders.
Some results are not able to be measured. However, as a result of this project, we have started to build a Lean mindset and culture, which is part of our strategic mission to save our customers money. Supply Velocity has been a valued partner in this mission.”
“In 2015 we began working with Dr. Mitch Millstein to optimize our inventory locations supporting e-commerce and in-store inventory needs. From this work we developed a new omni-channel warehousing and inventory plan that entirely redefined our approach to warehousing, inventory management, store distribution and fulfillment. As a result of the analyses by Dr. Millstein we have begun the move to an improved omni-channel design by reassigning MSAs to new warehouses, greater leveraging of in-store inventories to satisfy e-commerce demands, and exploring acquisitions of new warehousing space in strategic locations. We have already seen an improvement of $300,000 from both more efficient shipping strategies due to better inventory management.”
“We used Supply Velocity on our Warehouse optimization project. One of the key characteristics of Supply Velocity is that they listened to our requirements and provided a clear path for our Warehouse processes using lean tools and our future sales growth as objectives.”
“Myerson engaged Supply Velocity, specifically Ray Davis to visit our plant in Trinidad to conduct a two day assessment of our production procedures and provide us feedback on areas for improvement and where applicable, areas for future analysis.Put simply, we got everything we paid for and in addition to more in depth analysis, we got specific tasks that were immediately actionable. Our local management team found Ray to be engaging, highly credible and insightful based on his wide experience. In other words the cultural differences and lack of specific industry knowledge weren’t impediments to things we could implement immediately and on our own. In a nutshell it was money well spent and will pay itself back many times over.”
“Supply Velocity has helped Clean succeed in a number of ways. First, they provided the education that kicked off our Lean Process Improvement journey. They also facilitated a number of large supply chain and process improvement projects including: 1) building quality into our direct-labor productivity incentive program, 2) designing the layout of our garment warehouse, and 3) streamlining our route service process.We have integrated the methods that Supply Velocity taught us into our management and strategic planning. In the process our quality measurement has improved 22% from 2013 to 2015, we have reduced required annual labor by 2200 hours from the garment facility layout project and we’ve seen 50% decrease in error rate. Obviously the numbers speak for themselves, but just as important, Supply Velocity has been fun to work and have become true partners. They have “taught us how to fish” so our internal teams are able to implement change on their own, with the skills we learned from Supply Velocity. This relationship has been invaluable.”
“For several years we have worked with Supply Velocity to support us with their expertise on Lean Operations and Supply Chain Management. Supply Velocity has helped us implement Lean, improve our inventory systems, and educate our people. They are professionals who are always available to help us as needed.”
“In thirty years of hiring consultants, Supply Velocity, Inc. was the first to tell me what they were going to do, set a price they stuck to and substantially exceed my expectations. I have recommended them to friends and acquaintances. They were true partners in assisting with the turnaround of an acquisition we had been struggling with for two years.Their math-based technology, solid down-to-earth facilitation skills, and positive, patient and enthusiastic attitude combined to make our implementation of Lean a very rewarding experience.
We increased our production by 50% in the first month of implementation and continue to see improvements. Improvements have not only been realized in productivity, but also in quality and morale. We have increased profitability by $2M on flat sales of $10M.
Based on Supply Velocity, Inc.’s integrity and our results, I will continue to refer them to others and utilize them in the future as we expand our company through acquisitions.”
“In the spring of 2003, the St. Louis Area Chapter of the American Red Cross engaged Supply Velocity, Inc. to perform a study and make recommendations to streamline office processes, maximize cash flow in purchasing and warehousing and restructure and enhance our maintenance department. Supply Velocity, Inc.’s process was methodical, flexible, staff-oriented, inclusive and, above all, trackable.In the last six months, our Chapter has realized expense savings of over $380,000 annually, and significant improvement in intra-company service levels has been attained. Supply Velocity, Inc. will return to the Chapter periodically throughout the next 18 months to audit our newly implemented processes. We have been pleased with our results and Supply Velocity, Inc.’s professionalism.”
“I am thrilled to provide this testimonial for Supply Velocity and their outstanding work in implementing Lean Warehouses and processes at Crescent Parts & Equipment through the COVID pandemic. With their data-first focus and Mitch’s exceptional coaching and experience, they transformed our business into a more supply chain-oriented organization, enabling us to grow while prioritizing employee safety and creating a better work environment. Supply Velocity’s expertise in Lean methodologies and their comprehensive evaluation of our customers have been instrumental in optimizing our operations and increasing customer satisfaction. We highly recommend Supply Velocity to any company seeking to implement Lean processes and enhance their supply chain efficiency.”
“We are using Supply Velocity’s Lean Six Sigma methods to analyze a variety of processes including rationalizing SKUs (stock-keeping-units). By using math to evaluate SKUs we took some of the emotion out of our decisions. We expect significant increases in sales and productivity from reducing poor performing SKUs.”
“Many thanks to all three Supply Velocity presenters. I think you guys took a very difficult time for learning and capitalized on everyone’s time and training needs. I truly hope this helps your business as this was a considerable undertaking on the part of Supply Velocity. Outstanding!!”