Lean Implementation in the SLC Electronics Factory

Lean implementation is a challenge in any area, but it was a special challenge in the electronics factory, where a large number of different products/models flow across the same shared resources and assembly lines.  The electronics factory today makes over 188 product models (122 types of SMT cards, 25 wave-style cards, 18 types of harnesses, and 23 types of chassis), not to mention over 200 different spares which do not follow a regular production schedule.  The challenge the electronics factory faced was to design a system that would flow a variety of products through the common value stream, each product having its own cycle time, different parts, and varied labor content—and each card at a different rate required by its specific rate of customer demand!

Before a Lean strategy was adopted in the electronics factory, the factory was plagued with the problems familiar to batch-type traditional production.  Circuit cards were scheduled for production in batches of one-months worth of customer demand.  The large batch sizes were chosen in order to avoid long machine downtime associated with changing over the machines to run a different type of card.  Large amounts of WIP were on the shop floor, and quality problems often were not detected until after a large amount of defective product had been run.  Another problem was the difficulty of seeing parts shortages arise in time to avoid the line shutting down.  The average lead-time of a circuit card was 57 days (time it took for a card to be produced from the work order dropping to sell-off).

Lean Implementation in the Electronics Factory began in Feb 2004 with a kick-off 1-week training of core factory members by our Lean consultant, Jim Myers.  Jim taught lean tools such as quick changeover, kanbans and supermarkets, and heijunka level-load scheduling that the team later used to design their lean system.  Dan Davis, electronics factory manager, and his team had to rely heavily on their own creativity and resourcefulness as they applied these tools to their factory, since they had no other factory to benchmark or model after.  The resulting mixed-model lean system is one-of-a-kind and a marvel to those who are familiar with its details.

In this lean system, production of all cards is paced by customer pull of finished goods, instead of push from an ERP schedule.  Each piece of hardware is represented by a visual plastic tag; when a card is pulled from finished goods, the associated tag is routed to the production scheduling board, where it signals to begin production of a replacement card.  Thus, the assembly lines are never ‘choked’ with excess WIP or raw inventory.

A major change in the way the automated machinery was utilized was necessary to achieve this production schedule.  Changeovers of the pick n’ place machine took about 4 hours.  This seriously limited the flexibility of the machine to handle the constant switching of product models down the value stream.  By acquiring dedicated reels and magazines and streamlining work elements, the factory team was able to reduce the changeover time to 10 minutes.  This allowed the variety of lots that run across pick n’ place to increase from 1.5 to 4.3 lots per day (while maintaining the same amount of labor.)

A heijunka board, or ‘level load’ board, is used after the cards flow through the automated machinery (pick n’ place and wave solder) and enter manual assembly.  The heijunka board is a tool that allows the ‘now smaller lots’ to continue the process as a one-piece flow.  Each card is assigned to a different ‘family’ based on its required manual labor content.  The heijunka board visually indicates (by another plastic tag) when during the day each card should begin assembly.  This way, cards with a labor content of only 30 minutes do not wait in a queue for production behind cards that take 200+ minutes to assemble.  Each family’s cards are flowed through the line at the rate that is required by their specific level of customer demand.

By using the lean tools and staying disciplined to the lean process, the electronics factory was able to decrease the lead-time of any card from the original 57 days to 27 days- a 52% reduction.  WIP inventory on the floor dropped from 4393 serialized assets to 2719—a 38% reduction.  Estimated direct labor savings due to streamlined efficiency of the process are in the area of 170 hours/month.

The SLC electronics factory has accomplished much to be proud of- and yet they are still not satisfied.  One of their next lean projects is focused on developing a material delivery system where the vendor makes just-in-time parts deliveries right to the point of consumption on the assembly line.  They will not stop until they have reduced batch size in their factory down to 1 day’s worth of customer demand; that means when a card enters production it will complete within it’s individual cycle time-- typically less than 1 week. This continual pursuit of perfection is a trademark of lean thinking.  Kudos to the SLC electronic factory for setting a great example to the rest of the division as we all  “go lean”.