The Best Machine Shops are Lean

An often-heard challenge to lean is that it is only good for high-volume operations and doesn’t work well in high-variety, low-volume operations such as job shops.

            But according to a recent report by American Machinist magazine, the key factor that differentiates the best shops from all others is (drum roll, please): continuous improvement.

            The magazine conducted a benchmarking survey of machine shops in which respondents were asked how their cycle times have changed from three years ago. All shops reported a decrease in cycle times, with an average decrease of 25 percent. Independent shops reported the greatest decrease, 40 to 50 percent.

            The survey did not ask how shops reduced cycle times, but it did ask about the tools and techniques used that contributed to the decreases. The magazine then analyzed the differences between the top-performing shops and all others. The results:

 

            Perhaps the most important tool that shops use is an organized approach to continually improve the way they operate. Top shops are twice as likely to use formal continuous improvement programs — 51 percent of the top shops have formal programs in place compared with 27.4 percent of all other shops. Additionally, 88.2 percent of the top shops use lean manufacturing techniques, while half that number — 41.1 percent — of all other shops do. Reduced cycle times are a result of those programs.

 

            Another interesting finding is what I view as evidence of constant innovation by the leaner shops. The magazine notes:

 

            Tool manufacturers continually develop tools that can reduce cycle times dramatically, and the top shops are using them. The average top shop spends $125,000 a year on tooling, four times as much as other shops that indicated they spend about $30,000 a year on tooling.

 

            But the story about the survey, written by Larry Hafti, also observes that reducing cycle time is, by itself, not enough for success:

 

            If a shop is going to invest the time and money to reduce cycle times, then it should also invest time and money in improving the overall production process so that it can then reap the benefits of reduced cycle time. And that is what the top shops are doing…

            It all goes back to the most important tool — a program and commitment to continually improving the total production process. Cycle times certainly need to be considered, but cycle time improvement without overall production process improvement will not improve a business's bottom line.

 

            I think that says it all.