Company Embraces Innovative Manufacturing Practice that Improves Lead Times
Quick Response Manufacturing (QRM) provides solutions to problems job shops face, leading to innovations that save money for OEMs
A few years ago, with one of its largest customers ordering hundreds of line items weekly in quantities of one to five, CR Metal Products in St. Louis, Missouri, was having trouble tracking the order and delivering the parts on time. So it developed its first-ever small fabrication cell to handle the customer with the ultimate demand in high mix. The system worked, and it was the first step the company took towards implementing the principles of Quick Response Manufacturing (QRM).
In a 100,000 square foot building, there was no way to try and track down five piece orders with hundreds of them on the floor at one time. "We knew our only answer was to create a small fabrication cell that could produce those parts," said Mark Chadwick, vice president of operations at CR Metal Products. "That was prior to us reading the QRM book and not really thinking about the fact that everything should run that way."
But now—two years into implementing QRM—everything does run that way, and the company is all the more successful for it. With mostly a high-mix, low-volume customer base, CR Metal Products (www.crmetal.com) now uses product-specific, color-coded work cells where parts are passed off from worker to worker on a cart within each cell. "A worker punches his parts and rolls the cart right over to the guy who's going to form them, so the press brake is right next to the punch press. So the cart isn't even rolling across an aisle, we're just putting the parts on a cart and sliding it right to the next machine," Chadwick said. "You can communicate much better in a cell through multiple operations when you're all within a hand's reach of each other."
The cellular approach increases visibility and decreases lead times, which means savings for both CR Metal Products and its customers. The concept of cellular production has been around for decades, but QRM, as outlined in Rajan Suri's books, Quick Response Manufacturing: A Companywide Approach to Reducing Lead Times (Productivity Press, 1998), and It's About Time: The Competitive Advantage of Quick Response Manufacturing (Productivity Press, 2010), focuses on developing a QRM cell to cut down drastically on lead times. Prior to implementing QRM, Chadwick and his senior staff began reading the books and contacted the Center for Quick Response Manufacturing at the University of Wisconsin-Madison for guidance and advice. The cells form a key part of how QRM allows companies to achieve quick turnaround, according to Prof. Ananth Krishnamurthy, director for the Center for Quick Response Manufacturing.
While the first core principal to QRM is recognizing the power of short lead times, the second concept is having the organizational structure that allows for short lead times, which the cell concept falls under. "The goal of the cell is to take your operations and take all the functions needed to make a product and co-locate them and dedicate them for a set of products," Krishnamurthy said. "So if you have a milling machine, a drilling machine, a punch press, a press brake, and a welding station, instead of having five or six different departments and your job taking a side seat to all of those departments, the cell concept recommends that you co-locate these machines together so that from start to finish, the job is done right there in the cell."
This cell concept allows for better visibility of a job and challenges the concept of efficiency as most manufacturers see it. Traditionally, efficiency is how fast a worker can get a part made on a machine. But what happens if that part just sits between machines and time is lost? "The QRM concept says that's not being efficient. You don't want islands of efficiency, you want efficiency of a job flowing through the factory, which makes it much more effective from a customer's point of view and effective from a cash flow and revenue point of view for companies like CR Metal," Krishnamurthy said.
It used to be that a worker would come to Chadwick to get approval if an order was needed in less than four weeks, but now they just come to him for approval if the order is requested in less than a week. Since implementing QRM about two years ago, CR Metal Products has jumped to about 105 percent efficiency, even when non-productive time like material handling or fork-lift driving is considered. Without those factors, Chadwick said, they are at about 115 to 120 percent efficiency. The company's overall efficiency measure compares the hours estimated for paying jobs to the actual hours worked for all shop employees, including supervisor's hours and indirect time spent by direct labor employees. Therefore, the individual employee needs to score well above 100 percent for the company average to make the 100 percent mark or more. The QRM process reduces the non-value added time wasted finding forklifts and shuffling skids of products, since parts are on carts and move right to each machine, never being stored on shelves. Time spent by supervisors managing work flows in also reduced because when the parts are cut, the flow pushes them through each machine until completed.
QRM All Around
And it's all about shorter lead times, short runs, and fast turnaround. "The total goal of QRM is to cut down the time between the day it's ordered and the day it's shipped," Chadwick said. And OEMs love the shorter lead times because they have more leeway to better predict their requirements. "The point at which they (customers) make the order is much closer to when they're going to consume, and they can make a much more educated decision on what quantities they should order at that point. Instead of predicting what their needs are going to be six weeks out, they can look at what their needs are two weeks out, and it's much more of an accurate picture for them," Chadwick explained.
According to Chadwick, QRM targets work that is ideal for U.S. job shops and could revolutionize American manufacturing. "The work that's staying in the U.S.—these job shop type products, these shorter run products and quick-cycle products—are the things that overseas competition can't compete with as well, and that's where we can be at our strongest," Chadwick said. And OEMs looking to American job shops as suppliers are looking for companies that can help them compete in the 21st century market and provide customized products at short lead times with high quality and a competitive price, said Krishnamurthy. It's a tall order to fill, but that's where QRM fits in. "Job shop customers want custom product and small quantity orders at very short lead times," Krishnamurthy said. "That's the challenge. And QRM is designed to help companies be competitive and achieve that goal."
Not just a factory approach, but a company-wide strategy, QRM aims to increase profitability by reducing non-value-added time, cutting inventory, and increasing return on investment. Since 1993, the QRM Center (www.qrmcenter.org) has worked with more than 200 companies—OEMs and job shops—to reduce lead times. Building on the foundations of strategies like Lean and Six Sigma, it enables companies to be more competitive in manufacturing custom-engineered products in low or varying volumes at high quality and short lead times. The QRM center works in partnership with companies, faculty, and students at the University of Wisconsin-Madison, providing conferences, seminars, and implementation support to help companies transition.
"The initial challenge was deciding to move all the equipment in the shop to facilitate this big investment," Chadwick said, adding that he attended a seminar with his managers at the QRM Center to get them to buy into the program. The management needs to be fully invested in the process for it to be effective, he said. And now Chadwick runs once-a-week book clubs with managers and cell leaders to deepen understanding and improve inner workings. "Everybody reads a chapter before they get there and they highlight the book and talk about what interests them. We've had our third session of that and it's starting to have the effect we want it to have. Our understanding is better because we actually read every word in the book and we've discussed each word. Everyone understands it better and they're doing more cross-training," Chadwick said.
Cross-training has been implemented along with QRM to help the flow of parts through the shop floor. There's no down time as a part moves from one machine operator to the next. Chadwick said one of the company's next main goals in advancing QRM is to ensure that workers learn the job one notch upstream and downstream from where they are working. They have created a "bounty system" to promote this cross-training, so if a press brake worker learns how to use a turret, for example, he or she can earn a bonus of a couple of hundred dollars. "If you're a worker who runs a turret and you learn how to set up a press brake and become proficient at it, you can get $400 dollars bounty," he said. Higher bounties are set on higher-demand skills, such as robotic welding. "They enjoy it (cross-training), actually. It makes their job more interesting. Instead of running just one type of machine, they get to think in another dimension," he said.
Quick Response Manufacturing counters the well-worn belief that running a machine at 100 percent capacity is optimum for efficiency. "What we've found is if you're trying to compete in a market with short lead times, then you have to have some spare capacity," said Krishnamurthy. "If a highway is running at 100 percent in rush hour traffic, you get stuck in a traffic jam, just as you have long lead times if your machine is running at 100 percent. So if you have spare capacity on a machine, just as with a highway, your orders don't get stuck in a traffic jam inside the factory," he explained.
CR Metal Products has invested heavily in new machinery and is about to invest in two new Servo electric press brakes and two new turrets to pair with the press brakes. "I don't have departments, so I need to match machinery to complete cells," Chadwick said. "So if I buy two press brakes and I don't buy two turrets to go with them, then I'm losing balance somewhere and I need a person to be able to run both machines." During a June interview, Chadwick said he is currently working on getting the right mix of machinery and people to complete the "ultimate high mix/low volume" red cell. "If you don't staff it right, then it doesn't work," he said. "You've got to get the right balance of staff and the right balance of machines in order for it to work."
CR Metal Products' robotic welding cells are made up primarily of FANUC robots with SKS welding equipment doing arc welding, which has allowed the company to put "amazing TIG-like welds on aluminum and stainless and do a real fine job of welding light-gauge steel," Chadwick noted. The company, he said, has become masters of aluminum weldments, and the robotics have helped with throughput. "With ten robots, we can eliminate bottlenecks in welding," he continued. "Welding was one of those spots that continually bottlenecked, and it's just pure man hours. You just had to have trained people and they just had to weld and weld. It was a problem keeping that department properly staffed, but with the robots now, you just need some really sharp robotic programmers and operators and you can put other people from other cells to come over and run a robot. Once you have the robot properly set up, they can just run it out as an operator. Our goal is to have every single welder know how to run a robot."
Investing in new machinery to complete cells will translate into shorter lead times, Krishnamurthy said. "If you don't invest in that spare capacity, then you pay in terms of late deliveries, long lead times, expediting, poor quality, and you pay in terms of lost business." With a 100,000 square foot main facility and two smaller 20,000 square foot facilities for storage and assembly, CR Metal Products has invested nearly a half million in new machinery during the past year. Improved processes and efficiency have resulted in the need for less storage space and therefore has allowed the company to bring in new machinery without expanding. "We've added about 30 percent of our major equipment into our building that ten years ago everybody said was full," Chadwick said. "Back in 2000, everyone said, ‘You've got to add on,' but instead, we put in more machines so that our velocity is faster, so that you don't have racking and don't store parts, and you need less room. We were at a $9 million pace when we were full, and now we've almost doubled that ten years later and we're still going to add more machines. We're not quite full."
Being able to turn around orders quickly has changed the company's cost structure and allowed the company to be more aggressive on pricing. One customer, a brand-name electrical enclosure manufacturer, has saved money as a result of CR Metal Products' implementing QRM, Chadwick said. "Customers are getting a better value because when you reduce lead times, they save money. When you operate at 104 percent efficiency, that gives you some room to split those costs with the customer and help them sell more by knocking off a couple percent on their parts."
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