8/2/2011
Chuck Ray
School of Forest Resources
The Pennsylvania State University
LEAN MANUFACTURING FOR
LEAN MANUFACTURING FOR KILN DRYING OPERATIONS
“Current
Current Plant Measures Plant Measures
May Not Support Lean”
‐ Armstrong Flooring
AME Lean Conference
“Lessons Learned”
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Lean Manufacturing
Lean Manufacturing
• First demonstrated through the Toyota Production System
• Is a set of principles, concepts, and techniques
• Is a socio‐technical system
• Designed to continuously eliminate waste and create value
l
• Is the current de facto standard of the manufacturing world
What is the greatest challenge to making your company Lean?
•
•
•
•
•
•
•
•
•
Time involved; cost of doing business
Managing yield issues
Employee development and active engagement
Managing inventory levels
Yield vs. getting the parts required to complete orders
Cost of possibly changing the manufacturing process
Managing raw material quality and lead time
Managing raw material quality and lead time
Assigning cost of carrying inventory
Controlling inventory vs. customer demand vs. lean manufacturing principles to improve yield
(from PSU Lean Research Planning Meeting, 9-11-03)
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What factors determine Lean production for your operation(s)?
•
•
•
•
•
•
•
•
Increase inventory turns
Yields
Manpower/employee efficiencies
Overall material cost
Overhead costs
Lead time vs. order size
Effectiveness in managing the supply chain
ff i
i
i
h
l h i
Customer willingness to pay for lean benefits (fast delivery, better yield, meet small quantity specifications)
(from PSU Lean Research Planning Meeting, 9-11-03)
What does JIT mean in your business?
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•
•
•
•
•
•
Reduce inventory
Managing material deliveries to match production schedule
Managing material deliveries to match production schedule
Not hearing the customer complain
Reduced lead times
Raw material JIT is virtually non‐existent in our industry
Having inventory on the ground for next day delivery to customers
Our customer base is two fold. 1. Lumber shipments (1‐3 days for 70% of customer base. The balance want material within a few weeks.) This is for KD lumber with maybe some value added millwork. 2. Moulding/components (4 – 10 days for 90% of the customer base.) (from PSU Lean Research Planning Meeting, 9-11-03)
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How much have you been able to reduce lead times over the past ten years?
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•
•
•
•
•
•
•
•
8 10 weeks to < 2 weeks on some stock items
8‐10
weeks to < 2 weeks on some stock items
Very little discounting existing inventory
Only marginally, but we have always been strong in this area
6‐8 weeks down to 2‐3 weeks on average
Only through inventory increases which has been primarily from market conditions and raw material availability
Approximately 33%
Very little, product has become more customized
For the dimension mill, 10‐15 days down to 3 days
Not much, mostly by accident
(from PSU Lean Research Planning Meeting, 9-11-03)
What processes in your operations cause the most problems?
Controlling waste
Communication from each level of business
Inventory control
Varying cost of material
Raw material acquisition
PROCEDURES
Unexpected downtimes
Shipping
Material size and quality variations, plywood thickness variations, laminate defects
• Sanding – solid wood and veneer
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•
•
•
•
•
•
•
•
(from PSU Lean Research Planning Meeting, 9-11-03)
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Is Lean Production primarily about cost reduction, or not?
It depends:
What is the objective of the current effort?
What tools are being applied?
What outcomes are necessary?
Are you being beat on cost alone, or is the challenge bigger than that?
Benefits of Lean Manufacturing
Lean Benefits from a Cabinet Company
R e d u c tio n R a te (% )
•
•
•
•
100
90
80
70
60
50
40
30
20
10
0
incident Customer
Safety
complain
rate
reduction in
lost work redcution reduction
days
WIP
Defect Plant cycle
reduction
time
quality
reduction reduction
total cost
reduction
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8/2/2011
“Using Lean Only As a Cost “U
i L
O l A C t
Reduction Program Will
Lead to Failure” ‐ Armstrong Flooring
Armstrong Flooring
Safety
• 98% reduction in lost work days
• Incident rate reduced from 6.4 to 2.9 in last three years
• Five‐year trend in reduction of Incident Rate
• Received the 2001 and 2002 Masco Platinum Safety Award Quality
• 66% Improvement in DPPM • Customer complaints dropped from one per day to less than one per week
• Control plans in place for all processes
Equipment Uptime
• Uptime above 99%
• TPM program implemented
• Predictive program implemented
Delivery
• On‐time delivery of 99.7% in 2002
• Improved plant cycle time from over 5 days to 17 hours
• Reduced WIP by over 80%
Cost
• Reduced total cost by 7.1% in 2002
• Reduced total cost by 2.3% in 2001
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Let’s first briefly review…
What is Lean Production supposed to be, anyway?
dt b
?
Lean Manufacturing
K
A
I
Z
E
N
Si Si
Six Sigma
W
Waste Elimination
JJust‐In‐Time I i
Production
Set‐up reduction
Visual manufacturing
Total Preventive Maintenance
Pull System
5S
Cellular/Flow Manufacturing
K
A
I
Z
E
N
Team Work / Employee empowerment
The Structure of Lean Manufacturing.
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What’s unique about wood production?
• Yield! • Seasonality of raw material – e.g., log supply in winter
• Non‐integrated,
Non integrated, fiercely competitive fiercely competitive
supply chain
Traditional Lean Requirement:
• “All portions of the Lean Enterprise must be Lean”
• Wood Products Industry Challenge:
– Is this feasible with wood as a raw material?
– Does one link in the chain have to be “Fat”?
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Traditional Lean Requirement:
• “All WIP must be reduced to near zero”
• Wood Products Industry Challenge:
– Producing components from lumber to a precise order file, and discarding the rest, d f
definitely decreases yield from the raw l d
ld f
h
material. Are these yield losses offset by the gains from running lean?
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“I guarantee I can reduce in‐process inventory. But every time we’ve reduced inventory in the Rough Mill, costs go up.” – a plant manager
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Traditional Lean Requirement
• “Lean companies organize a flexible & p
g
f
responsive supply chain”
• Wood Products Industry Challenge:
• Are sawmills flexible & responsive ?
• Do your purchasing strategies encourage supplier flexibility or volume discounts ?
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Traditional Lean Requirement
• “All
All employees must be empowered
employees must be empowered”
• Wood Products Industry Challenge:
– Can our hourly employees adapt to Lean?
– Can leadership systems change?
p y
g
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Traditional Lean Requirement
• Must have“Self‐discipline for employees”
• Have everyone accept 5S as a personal goal.
• sort, straighten, scrub, standardize, self‐discipline
• Set an example and model behavior.
• Get everyone involved.
• Integrate into daily work routine.
• Is this Easy for most wood products industry employees?
– (research says it is Not; but practice says “It is!”)
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In order to quantify and q
y
customize Lean for Wood Products, we need standard measures for each specific type p
yp
of operation.
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Lean Indices for various wood production facilities
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Lean Index
12
10
8
6
4
2
0
Secondary M anufacturing
Primary M anufacturing
The macro lean indexes from our general industry model.
Log Yard
Saw Mill
Green Lumber Yard Kiln Drying 11.66
3.25
3.33
5.15
2.85
Dried Lumber Yard
Lumber Warehouse Dimension Mill
5.16
Component Warehouse
Component Warehouse
3.94
4.04
Assembly & Finishing
Packaging
Average “Lean Indices” across the hardwood supply chain. Product Warehouse 3.85
2.97
7.49
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8/2/2011
Dry lumber
Energy
Energy
Labor
Panel
Lumber Warehouse
(Inventory)
4.53
Lumber
Lumber
Energy
By product
Energy
Labor
Dimension & Machining
Dimension & Machining
(Inventory)
(Inventory)
4.13
Composite panel
panel
Panel mill& Machining
(Inventory)
Dimension part
Purchased
Purchased Dimension
Import Dimension
Other Material
Component
Labor
4.60
By product Assembly & Finishing
(Inventory)
By product
Import
Energy
Composite panel Warehouse (inventory)
7.26
Labor
Labor
2.91
Furniture
Labor
Energy
3.00
Packaging &
Packaging & Warehouse
(Inventory)
(Inventory)
Furniture
By product
Shipped
Furniture
Lean indices of a furniture company. Log
Labor
Energy
4.04
Yard (Inventory)
Sold log
By product
Log
Labor
Energy
4.97
Saw Mill (Inventory)
Waste Waste
By product
Green Green Lumber Lumber Labor
Purchased green lumber
Purchased green lumber
Energy
3.23
Energy
4.13
Lumber Yard (Inventory)
Labor
Labor
Green Lumber
By product Sold lumber Sold lumber By product
Kiln (Inventory)
Waste
LaborEnergy
By product
Purchased green lumber
Purchased green lumber
Dry lumber Dry lumber Labor
Labor
Energy
Energy
Lumber Warehouse (Inventory)
By products
10.44
Shipped lumber Lean indices of a saw mill. 17
8/2/2011
The single largest difference between similar companies, when measuring the input/output ratios, is energy consumption
is energy consumption.
What would a Lean kiln drying operation look like?
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8/2/2011
1. Optimize energy usage
• R
Regular kiln checks for hot spots and air leaks
l kil h k f h t
t
d i l k
• Upgrades to controls, boilers, and venting systems
• Implementation of advanced control algorithms
• Monitor energy usage/bd ft/species/size
• Utilize air drying for slow moving products, and as pre‐dry for all products
2. Optimize kiln scheduling
• Think of “kiln‐days” as limiting constraint
• Maximize profitability subject to kiln‐day constraints
• Think in terms of $ per kiln‐day
• Don’t dry unprofitable products, convert to boiler fuel or open‐market biomass
• Eliminate re‐dry; initial dry to EMC, final dry at order…instead of “just‐in‐time”, think FIT “finish‐in‐time”
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8/2/2011
species
thick
grade
Gross
Gross
LumberDry
Sales
Sales
Cost
Raw
Margin
Margin
mbft
$/mbf
$
$/mbf
$
$/mbf
$
total
kiln
drying
drying
capacity
days
days
Entire Mix
By LumberDry Model
Total
11323
By PSU Model
Total
12381
1702.05
19272310
1261.46
14,283,513
440.5897
$4,988,796.88
8451.5
$5,370,397.00
8497
Sample results
S. Maple
4/4
LumberDry
5/4
6/4
8/4
10/4
12/4
high
261
1,300
339,300
1,000
261,000
300
78,300
40000
12
78
1 com
23
850
19,550
500
11,500
350
8,050
40000
12
7
2 com
0
0
0
0
0
0
0
40000
12
high
12
1,500
18,000
1,050
12,600
450
5,400
40000
12
4
1 com
8
900
7,200
550
4,400
350
2,800
40000
12
2
high
60
1,500
64,500
425
25,500
45000
18
1 com
15
1,050
15,750
675
10,125
375
5,625
45000
18
6
high
132
1,575
207,900
1,150
151,800
425
56,100
47500
18
50
1 com
35
1,200
42,000
775
27,125
425
14,875
47500
18
13
high
90,000
1,075
0
24
9
1,700
15,300
1,300
11,700
400
3,600
50000
26
5
1 com
6
1,400
8,400
1,000
6,000
400
2,400
50000
26
3
high
10
1,900
19,000
1,400
14,000
500
5,000
50000
26
5
50000
26
1 com
0
0
0
0
0
0
0
571
1,370
782,400
1,007
574,750
364
207,650
0
197
Reduced Cost
S. Maple
4/4
PSU
5/4
313.2
1,300
407,160
1,000
313,200
300
93,960
40000
12
94
-196.67
1 com
27.6
850
23,460
500
13,800
350
9,660
40000
12
8
-246.67
2 com
0
0
0
0
0
0
0
40000
12
0
103.33
14.4
1,500
21,600
1,050
15,120
450
6,480
40000
12
4
-346.67
9.6
900
8,640
550
5,280
350
3,360
40000
12
3
-246.67
72
1,500
108,000
1,075
high
high
1 com
6/4
29
-287.22
18
1,050
18,900
675
12,150
375
6,750
45000
18
7
-237.22
158.4
1,575
249,480
1,150
182,160
425
67,320
47500
18
60
-294.47
42
1,200
50,400
775
32,550
425
17,850
47500
18
16
-294.47
10.8
1,700
18,360
1,300
14,040
400
4,320
50000
26
6
-220.89
1 com
7.2
1,400
10,080
1,000
7,200
400
2,880
50000
26
4
-220.89
high
12
1,900
22,800
1,400
16,800
500
6,000
50000
26
6
-320.89
0
0
0
0
0
0
0
50000
26
0
179.11
685
1,370
938,880
1,007
689,700
364
249,180
high
1 com
8/4
high
1 com
10/4
12/4
high
1 com
77,400
425
30,600
45000
18
237
3. Minimize lumber movement
Random inventory storage (inefficient)
Designated inventory layout (good)
Dynamic inventory assignment (better)
Strive for moving “front” of green and dry lumber loading
• Track raw material flows by BTU value
•
•
•
•
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8/2/2011
4.Other ideas
• Consider out‐sourcing of drying operations to more efficient operators
ffi i t
t
• Conversely, offer custom‐drying capacity to local cabinet/furniture/log home companies
• Partial and/or mixed kiln loads
• Dedicated “finish” kilns
Dedicated “finish” kilns
• Smaller deliveries
Can we illustrate non‐lean impact Can
we illustrate non lean impact
on drying operations?
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Sample data set for current ISPM standard
Estimation of fuel consumption per treatment schedule
HT treatment
(oC/min)
Required
Minimum
Temperature
(oF)
Measured
Minimum
Temperature
(oF)
Preheating
Time (min)
Treatment
Duration
(min)
Kiln
Operation
time (min)
Fuel
Consumption
(BTU/pallet)
56/30
133
140
96.1
30
116.128
4775
60/60
140
147
105.9
60
145.897
5999
71/75
160
167
143.0
75
193.014
7936
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CO2 Emission Comparison
Carbon emission for one pallet in different treatment types
Carbo
on Footprint (CO2 eq.)
Production
Transportation
Treatment
End of Life
30
25
20
15
10
5
0
HT 56/30
HT 60/60
HT 71/75
MB
RF
Treatment Type
Loads Treated per Day
Timeline for Heat Treating Pallets
Heat Treatment
1st load
2nd load
3rd load
71/75
60/60
56/30
8:00 AM
0.00
12:00 PM
4.00
4:00 PM
8.00
8:00 PM
12.00
16.00
Time
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8/2/2011
Longer treatment time incurs opportunity cost for the industry
Cost of heat treating pallet with different treatment types and
loads
Cos
st ($/pallet)
0.80
0.60
450,000 Pallets/yr
600 Pallets/load
1 kiln for one plant
Opportunity Cost included
0.679
0.464
0.40
0.245
0.20
3 loads/day
2.4 loads/day
2 loads/day
0.00
56/30
60/60
71/75
Treatment Type
Summary
• Get
Get lean to survive and to thrive
lean to survive and to thrive
• Lean requires more investment in inventory, supply chain, and quality; less in production • Lean production requires continuous improvement and employee training
• For lean kiln drying, focus on energy and kiln utilization
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8/2/2011
Thanks for your attention…
cdr14@psu.edu
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