Setpoint Systems Blog

I’ve been in the Industrial Automation business for over 15 years now and have seen quite a swing in the way manufacturers produce their products.   About 12 years ago I was working for a major tier 1 automotive components supplier as a process engineer.  The production lines were comprised of these large sophisticated machines that were all linked together with conveyors.  Parts were transported from station to station on small conveyor pallets and would stop at each station to either have value add work done or some sort of test or inspection performed.

There were several key issues with the large fully automated systems that produced our company’s products.

1. The lines were very expensive.  Many times ranging between $10-$15 million each.
2. The lead time for getting a full production line in place was anywhere between 15-24 months.
3. The machines were very complex and required a high level of engineering and maintenance support to keep them running.
4. The inventory of spare parts required to keep the systems up and running was huge
5. The systems, although “fully automated”, required more operators and support than expected to keep the systems running and clear all the faults, jams and other issues related to a complex system.
6. Changeovers took shifts if not days in some cases.  (Loss productivity and lots of labor for the CO)
7. The overall systems up time was terrible and in most cases ran in the 60-65% range
8. If one machine in the overall system went down, the entire line stopped while issues were resolved
9. The lines took up a huge amount of floor space and impeded process flow in many areas

Nice overview of traditional factory automation huh?   Well, the leaders of the company realized that this was not working out.  By the time a system was ordered, built, installed and commissioned, up to 2 years had gone by and many changes in both their product’s technologies and customer demands had changed. 

So lean thinking was introduced into the company and embraced by senior management.  This is ABSOLUTLY!! key for lean thinking to even have a chance.   The first task, after the basic 5’s stuff was out of the way was to find a better way to manufacture parts with simple, flexible equipment solutions that would address all the above listed issues.  Here is what happened.  I actually took part in this transformation and can vouch for how real and powerful Lean is.

1. The cost of the manufacturing lines went from $10-$15 Million to $850k-$2.5 million
2. Lead time for a lean line was around 6 months instead of 1.5 to 2  years
3. Machines were simple, flexible and easily reconfigurable because they were no longer connected via a vast network of conveyor systems.   Most machines were set up in cells in some sort of “U” shaped arrangement that allowed for easy access, flow and visual reference of what was going on in the cell at all times.
4. Spare parts inventory was cut by over 80% due to simple machine solutions.
5. Operators worked on the line to pass parts through the process but it offered the flexibility needed to handle a huge variety of products within a family.  We found that even though there was a manual interface requirement, the overall labor minutes per unit actually went down dramatically.
6. Changeovers from one model to the next were fast, efficient and mistake proofed.
7. Because the equipment was simple, easy to maintain and far less complicated, the overall uptime typically went from 65% to near 95%. 
8. If one machine in the overall system went down the other machines had small buffers that allowed the cell to keep running while individual machine issues were dealt with.
9. The floor space required for the cells was cut by over 75% in most cases.  This freed up valuable floor space for expansion for future business.

All in all, Lean Automation has made a huge impact for those manufacturers who have adopted the Lean philosophy and have strived to keep their competitive advantage intact through out the years of their specific business evolution.

So the theme I’m seeing here is, Go Lean or Go to China.  You decide.

How are you going to take your business into the future?  How will you compete with price-cutting competitors?  How will you reduce overhead costs and increase profits?  Every business struggles with these same questions.  The book The Toyota Way by Jeffrey Liker suggests that the answer to all of these questions is operational excellence.  What is operational excellence?  It is being the best at what you do, improving the speed of your business processes, improving the quality of your products and services, and cutting unnecessary steps and costs from your operations.

The Toyota Way lists 14 management principles that Toyota uses to achieve operational excellence.  These principles focus on eliminating waste, standardizing processes and learning from experience.  They facilitate a continuous flow of quality parts and information precisely when they are required.  By following these principles, hidden problems are brought to the surface and employees are trained to solve these problems.  The best part is the process is circular, it’s continually improving.  Kaizen!

Setpoint believes in Kaizen, which is a Japanese term that roughly means “continuous improvement.”  As part of the continuous improvement here at Setpoint, we have studied this book to identify ways to implement these 14 principles within our own company and for our customers.  One area that we are focusing on is the way we receive parts.  We are moving towards Just in Time so the parts are available to the assembly technician precisely when they are ready for them rather than having them sit for a week or two before they start working on the project.

If there was an easy way to make your company more profitable would you do it?  Most people know that a solution is out there but they are either too afraid to venture down that path or don’t adjust well to changes.  Unfortunately, in order to even survive in the business world we must adapt and be ready for change on a continual basis.  For the past three weeks Setpoint has given me the opportunity to read a very interesting book, Lean Thinking, written by James P. Womack and Daniel T. Jones, which puts the focus on changes that most any business should do to achieve greater success and profitability.

Lean Thinking is dedicated to guiding the reader by showing us how to get rid of “muda”, or waste as we know it, from every aspect of the organization by following five small and simple processes which are Value, the Value Stream, Flow, Pull, and Perfection.  You must begin by determining what is valuable to the customer from their perspective, then map out all the necessary steps to achieve the value stream.  The next step is to make sure the parts flow through the value stream in the most efficient way so that once a customer places an order it can instantaneously by pulled through the stream.  Finally, always remember to strive for perfection.

This is a proven method that has worked time and time again.  Womack and Jones used case study examples from mass production organizations across the world and in different industries but their thinking could literally be applied to any business or process.  There are always ways to look at processes and eliminate waste.  Setpoint has a great team working towards this ultimate goal that I know we are going to achieve and I’m glad I had this opportunity as it has really opened my eyes to old but new ideas that I can begin implementing in my department.

I just finished the book “Da Vinci and the 40 Answers” by Mark Fox which is not about Leonardo Da Vinci but is about creative thinking in the process of invention and problem solving.  I found the book quite interesting and entertaining and would love to read a novel by Mark Fox.  I have also found that it changed the way I think about a lot of things.  Many times since reading this book I have caught myself referring to some principle that was explored in the text.  It seems that some of those ideas have already embedded themselves into my subconscious and rise to the surface as I approach a decision.

The “40 Answers” refers to the 40 principles of TRIZ which is a Russian acronym that translates to “Theory of Inventive Problem Solving”.  Genrich Altshuller was a Russian engineer and creator of TRIZ.  One of his first jobs was working in a patent office inspecting invention proposals.  Here he became interested in the process of creativity.  He wanted to know how inventors came up with the ideas for their inventions.  In studying hundreds of thousands of patents, he discovered that there are only 1500 basic problems, or contradictions, that can be solved by applying one or more of 40 standard answers.

A simple way of looking at the TRIZ answers is to consider them as lenses.  To clarify this concept, suppose you have a problem; something is too small to see.  You have several lenses that you could choose from.  You could use your prescription bifocal lens, your magnifying glass lens, or if necessary, your microscope lens.  If you are trying to read the directions on a medicine bottle, your glasses may suffice, or maybe you need a magnifying glass.  A microscope would not be an appropriate lens.  However, if you were trying to see the tiny ear mites from your cats’ ear you would probably need the microscope lens.

My favorite example is from the swashbuckling days when bootleggers used to carry large blocks of salt onboard.  When they sighted the authorities they would tie these blocks of salt to the barrels of alcohol and throw them overboard.  The barrels would then sink due to the density of the salt.  When the ship was searched no contraband would be found, but as the salt dissolved the barrels would float back to the top for retrieval.  Adding the salt is using the “intermediary” lens or answer which is a temporary addition to the process whose sole purpose is to improve the final product but not necessarily become part of the final product.

A detailed explanation of each of the 40 answers can be found in the book or at http://www.triz40.com/aff_Principles.htm.

We also have a White Paper that talks more about Solving Problems through Creative Thinking.  It’s free so sign up & download it today!

Following the status quo has never pushed people to greatness.  Imagine if things always stayed the same, there would be no iPhones or iPods, no cell phones or pda’s, no electric vehicles or vehicles period.  There is a quote by Marechal Ferdinand Foch a Professor of Strategy that embraces following the status quo and not integrating the innovative technologies in our lives.  He said “airplanes are interesting toys but of no military value.”  When I read this statement I think of how the world has changed because of the use of airplanes in the military.  World War I was where they were first used by the military and nations realized they could influence the outcome of a war by using them, World War II followed up using airplanes to drop the atomic bombs that devastated a nation.  Today we wouldn’t think about going to war without the air force and our airplanes.

If you look at the innovations made in the computer industry, I remember using the 3 1/2″ floppy disks that only held 1.2 MB; I thought they were so great because they had the hard case over them unlike the 5 1/4″ floppies.  Then came the Zip Drives followed by recordable CD’s.  Today we can store 32 GB of information on a flash drive that is as small as 2″. 

At Setpoint we focus on eliminating the TWIT mentality which means it “Takes What It Takes” because it takes the focus off of being innovative and lets you get away with just going with the flow and following the status quo.  Check out our video on YouTube where Clark talks about it.

Keeping up to date with new technology is the key to any company’s survival.  Even with a niche product or technology, eventually something is going to come along and take that niche away, leaving you behind.

A prime example of this is my former employer.  We had a patented technology we integrated into a product that was way ahead of our competition.  This niche technology took this company from a $300 million dollar company to a multi-billion dollar company in a very short time.

In the fury of trying to keep up with demand for this product, my former employer failed to see or ignored the signs the market was sending.  There was a new technology on the horizon that had the potential to make our product obsolete.  We did develop some new products to complement our new found cash cow, but they were based on the same technology, which was not in the same direction the market was going.

In about the same time it took for us to rise to the top, this new technology we ignored came from behind and took the market from us.  In hindsight everyone could see the writing on the wall, but nobody did anything until it was too late.  Consequently, my former employer is no longer in business.

At Setpoint we are constantly looking for better, faster, and cheaper ways to get things done.  This helps us keep ahead of our competition while improving quality and reliability for our customers.  Setpoint has gained expertise in many technologies that were necessary to complete projects that at first glance seemed impossible.  We are continually evolving, learning new things, and keeping one step ahead of the market - which allows us to find solutions for our customers’ unique requirements.

At Setpoint, we see a lot of remarkable product ideas come across our table.  These products range anywhere from lip balm to aerial vehicle decoy flares, snowboards to bullet shell casings.  Developing, testing, and building a lean process to mass produce these products is our bread and butter here at Setpoint. During our years of working with brilliant and sophisticated customers we have found a common problem that undermines many of their great product ideas. Though these products have great potential and even in some cases, strong appeal to my personal wants (snowboards), they suffer from a common disease - NDFM.  They are Not Designed for Manufacturability.

Designing for manufacturability (DFM) is the process of proactively designing products for optimization during fabrication, assembly, purchasing and testing.  Other factors include making sure the product meets third party regulations and shipping constraints.  For my purposes here I want to focus on the levels of fabrication and assembly. 

The process of designing for manufacturability should happen before the product idea is used as a foundation for building a product empire.  If there’s a critical crack in the foundation, the whole structure will either eventually come down for repair or cost an exponential amount of money to keep stable.  If it doesn’t come down, it will be because there’s a staggering array of expensive bandages to hold it together.  The latter conclusion only works until the next competitor comes along and has figured out a less costly approach.

The “Rule of 10”

In general, the “Rule of 10” states that for every phase through which a design advances, the cost for resolving issues increases by a factor of 10.  Ideally, if the issue can be caught while the part is still going through initial design iterations the cost of resolution is minimized or eliminated. 

Level where issue is found:       The cost to resolve the issue:
If found during design phase             minimal to none
If found during Prototype                   $X (the cost of the part itself)
If found during initial assembly          $10X
If found during mass production        $100X
If found during distribution                 $1000X
If found by the End User                    $10000X

By the time our customers are ready to automate they have normally advanced through the stages of design, prototyping, and initial assembly.  They are now looking for solutions to automate the assembly of their products that often have inherent issues that may become visible only when scrutinized under the light of automated assembly.  

Does designing for manufacturability mean changing the entire product?

Not necessarily, but that doesn’t mean it will be inexpensive to resolve.  It might mean changing the thickness of the sheet metal to a common gage, or making two asymmetrical parts symmetrical, moving a hole away from an edge, or changing a soldered joint to a fastened joint, adding a series of tapers to a part so it can be injection molded instead of cut by an EDM machine, doing a basic tolerance study, or just changing a blind hole to a through hole. These changes may be minor at the part level, but when the change is propagated through adjoining components and the dominoes start to fall it may cost $100X the price of the part, or more. 

MUDA

Muda is a Japanese term popularized from the Toyota Production System that generally denotes a process that is required but is unproductive, wasteful and does not add value.  One example might be automating a drilling process where lubricant is required.  Not only is it extremely messy and requires constant maintenance, but it implies pumps, reservoirs, a filtering system, waste disposal plans – all of which add enormous cost just to drill a hole.  On the other hand if a different approach can be adopted and the hole is preformed or cut by a procedure that doesn’t require lubricant, this automation process just became much more cost effective and maintenance friendly - Lean, you might say.

Why does Setpoint care as long as we get the job?

Our bottom line depends on how satisfied our customers are with the end product we develop.  We want to help our customers ask the right questions during the early phases of design to help them develop a product that is automation friendly and designed for manufacturability. No muda. This allows us to deliver a solution that is robust, cost effective, and lean in every aspect. 

The days of “throwing a design over the manufacturing wall” and waiting to see how they build it have come to an end.  Lean automation may be expensive, but inefficient automation based on a half developed product is out of budget.  

I have always been amazed at the steps taken by Setpoint to create an innovative atmosphere.  Pioneering ideas have kept Setpoint in business while similar companies have proven unsuccessful.  With innovative thoughts always on the forefront, essential changes are typical here.  Lean systems were the motivation behind the latest change of revamping the receiving process.

Our current receiving process involves on-or-before deadlines from vendors and scads of steps.  You may think it’s harmless but we have seen that as parts trickle in valuable assembly time is wasted.  There is a lot of waste (MUDA) when parts are used to assemble only to stop before it is complete because not all of the parts have been received.  To solve this first issue we have moved to a just-in-time system with our deadlines on Thursday so all receiving can be done and parts are ready to assemble first thing Monday morning.

The second issue will require time to refine.  In order to lean down and streamline our receiving process we required fresh eyes.  It was time to educate and diversify our engineers by training all in the art of receiving.  Subsequently, this proposal was received with several grumbles but has become a great asset in understanding various facets of our company.

Lean thinking is a part of the Setpoint way.  Although engineer induced part discrepancies are inevitable, we feel this is a resourceful way to refine our process and increase productivity.

Are we doing our part to battle the energy-crunch, or just lounging around on 3-day weekends???

In 1938 the U.S. Government passed the Fair Labor Standards Act (FLSA), standardizing the eight hour work day and the 40 hour work week.  At the time it was a major improvement for the average American worker, since prior to the FLSA, many companies forced their employees to work 60+ hour weeks with no regulations whatsoever requiring employers to exercise fair and humane treatment on their workers.  “Sweat shops” were the norm, not the exception.  Since that fateful day seventy years ago, every Monday, Tuesday, Wednesday, Thursday and Friday workers all over the country wake up, get dressed, eat breakfast and go to work from 9 to 5. 

Over the years situations have come along that have made people question the ‘absolute’ effectiveness of this 5 day 40 hour week.  My first personal memory of such a situation was during the gasoline shortage in the early ’70s.  It was a crazy time as cars lined up at gas stations only being able to fuel up on odd or even days.  People were literally fighting in the streets over gasoline.  During that crisis, some forward-thinking companies realized that they could work 4-10 hour days instead of 5-8 hour days, still get their required production quotas complete, and save 20% in fuel usage for the employees with the shortened weekly commutes. 

Obviously the 4-day work week didn’t become the standard overnight but it has been around for decades now in one form or another with many manufacturing companies utilizing it for their blue-collar workforces.  It is often used as a perk in recruiting, and most employees find it to be a great benefit to them.  As flex-shifts became popular in the 80’s & 90’s more white-collar companies started instituting 4-day weeks too.  Again it was considered a benefit and people were very much in favor of the resulting 3 day weekends.  Employers also became fans of the 4 day week as they took note of improved morale, increases in productivity and decreases in absenteeism.  So did these companies find the ‘ultimate schedule’ for the employees and their shareholders?  Some say yes, some say no but I think all agree on one point.  There are some very tangible energy savings to be considered when setting a company’s work week, both for the employees and the company.  When skyrocketing energy costs are bold headlines in every newspaper across the country every day, any and all ideas must be seriously considered.  We find ourselves at that crossroad today.

Here at Setpoint, we have weighed the options and the potential benefits and drawbacks carefully and concluded that a 4 day week seems to be a good fit for us.  With all factors considered, we have undertaken a 90 day experiment to try and implement a more efficient schedule that balances the needs of our employees, our customers, and our shareholders.  We have adjusted our work week to a “four 10s” mode, or Monday through Thursday 6:00 am to 4:30 pm.  This change comes in response to several key points that have become more relevant by the day:

1. Public gas price comments have quickly transitioned from things like “Oh my goodness, these gas prices are steep!” to “Without a doubt, we should immediately invade and occupy all foreign oil-producing countries!”
2. The Great State of Utah, led by our friend and Governor Jon Huntsman Jr., has moved all state employees to a similar work week, with practically all state offices closed on Fridays.
3. For some time now, Setpoint employees have requested a four-day work week.  After weighing every possible angle, we feel that we can be just as effective (if not more) as we were in a Monday through Friday, 8 hours per day shift.  At the same time, everyone gets an extra day to relax, pursue their hobbies, spend time with their families, etc. and of course, there are those nifty energy savings to consider.

The primary payoff for this schedule for employees is obvious, with an extra day available every week for whatever they may choose to use it for, and an immediate 20% reduction in commuting costs.  But there are also a number of less-obvious benefits that should be noted: less wear and tear on vehicles, less time spent inhaling polluted air while stuck in traffic and less commute-related stress for everyone.

The payoff for the environment is also easy to see, as theoretically we are facilitating a 20% reduction in the notorious greenhouse gasses that our cars emit by reducing the commuting days for every employee (in reality, it will probably be less than a 20% reduction since many people will still be driving SOMEWHERE on Fridays, even if they don’t have to drive to Setpoint anymore).  There is also the added energy savings of minimizing electrical and natural gas usage in the Setpoint facility on Fridays.

And finally, the payoff that the 4-day work week can bring to Setpoint should be noted.  For years government and academic studies have shown that employees are more efficient in a 4 day work week.  The reasons cited are 20% less ’start-up time’ required every week (i.e. that protracted “where was I when I left off yesterday?” timeframe that we all go through every morning as our caffeine kicks in), improved employee morale, and a decrease in employee absenteeism (due to an extra day every week to take care of personal business).  This schedule also allows a more reasonable ‘flex’ when the workload is heavy and overtime is required to complete commitments.  Employees can work overtime on Fridays as required to stay on schedule and still have a two-day weekend to “recharge the batteries”.

With the changes that are taking place in the world today we all need to be flexible and open-minded to try and find more efficient ways to conduct business.  This means we need to occasionally look past some of the long-standing traditions that may no longer be as applicable as they once were.  With that sort of forward-thinking in mind, we here at Setpoint embark on our 90-day experiment with high hopes for a successful outcome.  The measure of success will be determined by the technical and financial effectiveness and efficiency in our efforts, as well as our employee and customer satisfaction levels.  If we are as successful as we expect to be, it’s probable that we will implement the 4-day work week as our standard.  Check back with us in 90 days to see how this grand experiment works out!

O.K. so what’s with the steel garbage can with a Setpoint logo and the anti TWIT sign on it?

TWIT is now known around Setpoint as it “Takes What It Takes”.  To help cut costs and be more profitable we have been challenged to look for quicker, faster, better and cheaper ways to accomplish the jobs given to us while still maintaining the level of quality that the customers expect.  The TWIT program was setup to encourage thinking in new or different ways to solve problems that are more efficient and less costly than what they have been done in the past.

In the TWIT program, a time or money saving idea that is implemented is recognized at the weekly Huddle.  Those involoved, what the process was and the benefits are explained to the company.  An item representing the cost savings or process is thrown in the can and a brief description is recorded on the can.  The best part is the excellent green bonus for the employees involved.

In one example, a slide that was specified proved to be too flimsy for the application.  An equivalent slide could not be found with mounting holes that were close.  A redesign of an expensive weldment and other parts in the assembly were needed to accommodate a more robust slide, it Takes What It Takes.  The difference came with the thought, “let’s just make our own slide.”  After some consideration, a slide was built using common off the shelf components and simple customized machined components.  The final configuration worked exceptionally well, was about the price of the original slide, and fit the existing mounting holes configuration so that no other redesign was needed.

Getting things done quicker, faster, better and cheaper will take some thinking outside the TWIT can.  If we can save $$$ by eliminating unnecessary operations or by new or different processes we will be more profitable.  As employees we will also have a nice little boost to our wallet.  Besides, isn’t this how new technology and processes are started…by thinking outside of the TWIT can?