You Know You're LEAN When..."Minutes for Bits"

I was the COO of a medium-sized, formerly bankrupt automotive tooling manufacturer. We had recently implemented Phase II of our LEAN initiative out in the shop affectionately known as The POD. I was proud and amazed at how well the employees had done making and continuing to make improvements to our milling, drilling and sub-assembly processes.

One afternoon the Chief Union Steward, who was also the Lead Diemaker in charge of The POD walked into my office. "That's not a Purchase Req in your hand, is it?" I asked him spotting the noticeable pink piece of paper in his hand.

He quickly held it behind his back and said "let me explain first." He knew full well that the bank was counting every penny we had so approved Purchase Reqs were few and far between.

"You know that we have four drills out in the POD" he went on. "But what you probably don't know is that we only have one set of drill bits. That means whenever two people need the same drill bit one of them has to wait and that increases our Minutes per Block."

As part of our LEAN initiative the employees kept track of their productivity each day by measuring their Minutes per Block. When we had first started out improvement efforts three months earlier the quoted standard by everyone was "an hour to mill and an hour to drill." Currently the target out in the shop was 28 minutes to mill and drill each block.

The Chief Union Steward went on to explain: "we did some calculations and we think we can get that down to 25 minutes if you buy us some extra sets of drill bits."

"So you want 3 more sets?" I asked, more interested now. "And how much does a set cost?"

"Actually we want 4 new sets he explained. The set we have is pretty worn out."

"How much?" I asked again.

"Well they're $2,000 each" he said.

I flinched.

Then he quickly added "but like I said we'll reduce our target to 25 minutes per block.

I took out my calculator and punched in a few numbers. All in our labour rates were about $40 per hour or $.67 per minute. That worked out to a savings of $2 per block. And since we processed about 450 blocks a day through the POD I estimated that it would take just less than 2 weeks to pay for the new drill bits.

I looked up at him. "You say you'll drop the target to 25 minutes?"

"Absolutely" he replied.

"Because I'll have April drop it on the reports you know" I confirmed.

"Go ahead" he answered confidently.

"Ok give me the Req" I said. He handed me the form and I added my signature.

"I'll get this to Purchasing" he said smiling. He quickly left my office before I changed my mind.

After he left I was smiling too. I had no doubt he was playing it safe with his 3 minutes per block reduction. That would later be confirmed by the Daily Reports. And the $8,000 was easily small enough that no one outside the company would even notice.

But mostly I was smiling because I knew we had truly achieved LEAN when a Chief Union Steward offers to reduce a productivity target in exchange for better tools.