Steel companies have caught up with the fever and are trying to implement lean manufacturing in their operations. Lean manufacturing of steel is a production process that seeks to eliminate waste in all steel production phases with the end purpose of satisfying the customer.
Results of a successful implementation of lean manufacturing of steel are monumental: huge reductions in production cost and inventory and cycle times, large gains in quality, and evident improvements in delivery reliability.
Traditional approaches to implement basic lean manufacturing in companies involve :
(a) a top-down rolling out of concepts
(b) installing and following goal-curves across management levels, meaning departmental goals must be in sync with each other and people are held accountable to meeting their targets
(c) doing the easy tasks first and gaining momentum from small successful results
(d) interactive education and creating at atmosphere that welcomes taking risks and
(e) initiating a pilot project before wide scale implementation.
Although very worthwhile, lean manufacturing is a very complicated process by itself. Lean manufacturing of steel even creates unique problems.
Steel parts that carry loads like automotive trains, jet engines, industrial bearings and metal-forming machinery are produced in a time-consuming multi-step process that involves a lot of grinding and polishing.
Steel parts are first molded out of metal that is relatively soft and then hardened by being subjected to high heat and quickly cooled in a liquid, or “quenched.” After this, steel parts still require precision finishing processes to produce ultra-smooth surfaces that reduce friction and wear
In steel production, equipments are often physically huge that rearrangement of these to reduce unnecessary human and machine movements may be unrealistic. Some processes in manufacturing of steel must be performed in large batches.
Because of the size of the products made, cycle time is often longer than in other manufacturing businesses. Metallurgical constraints limit the aggressive acceleration of heat-up and cool-down cycles.
Difficult equipment set-up increase production time, effort, yield loss and equipment deterioration. Protective inventories are necessary to avoid costly “out of metal” conditions during bottleneck operations and cannot be avoided.Traditional “kanban” or “signal controls are not suitable because some mills have a variety of routings and passes on the same equipment.
Also, unions and uncooperative labor relations make empowerment of employees and team building difficult to establish.
Despite these drawbacks, there have been success stories of lean manufacturing of steel.
In order to slash manufacturing costs by up to 30 percent and as to add $6 billion to the U.S. economy every year, Edison Materials Technology Center developed and refine, from 2000 to 2005, an innovative technique for making a wide array of hardened steel parts through lean manufacturing of steel.
“Hard turning”, a method to forge hot metal into nearly perfect parts and hardening and machining these after, was discovered to eliminate waste and possibly the need for polluting oils which are used in cutting and grinding. If hard turning will be applied to manufacture gears and turbine blades, this would meet EMTC’s goals.
EMTC has developed hard-turning technologies and a complete prototype system. Other members of the team are Delphi Automotive Systems, Torrington Co., Kennametal, Third Wave, Hardinge, Inc., Masco Tech, Georgia Institute of Technology, and Ohio State University.
Applying lean manufacturing of steel, Cairns Steel Fabricators also doubled its capacity and improved productivity. Established in 1979, CSF is a company focusing on steel fabrication and erection which employs around 60 personnel and handles 150 tonnes of steel per week.
QMI solutions offered a holistic approach to lean manufacturing of steel through its ProEdge Manufacturing Excellence program.
To ensure lean manufacturing of steel, CSF decided to address its internal processes first before expanding. CSF altered factory layout, house keeping and machinery setup. Efficient use of space and equipment resulted to increased productivity.
CSF positioned individual work areas in specific spots and color-coded tools to ensure they are returned to their proper places. In CSF’s case, it was important to look at the “little everyday things” in order to make the system leaner.
Elements Of The Six Sigma Framework
Management strategies, such as TQC, TQM, and Six Sigma, are distinguished from each other by their underlying rationale and framework. As far as the corporate framework of Six Sigma is concerned, it embodies the five elements of top-level management commitment, training schemes, project team activities, measurement system and stakeholder involvement.
Stakeholders include employees, owners, suppliers and customers. At the core of the framework is a formalized improvement strategy with the following five steps: define, measure, analyse, improve and control (DMAIC) which will be explained in detail in Section 2.3. The improvement strategy is based on training schemes, project team activities and measurement system. Top-level management commitment and stakeholder involvement are all inclusive in the framework.
Without these two, the improvement strategy functions poorly. All five elements support the improvement strategy and improvement project teams. Most big companies operate in three parts: R&D, manufacturing, and non-manufacturing service. Six Sigma can be introduced into each of these three parts separately. In fact, the color of Six Sigma could be different for each part. Six Sigma in the R&D part is often called “Design for Six Sigma (DFSS),” “Manufacturing Six Sigma” in manufacturing, and “Transactional Six Sigma (TSS)” in the non-manufacturing service sector. All five elements are necessary for each of the three different Six Sigma functions. However, the improvement methodology, DMAIC, could be modified in DFSS and TSS. These points will be explained in detail in Sections 2.6 and 2.7.2.2 Top-level Management Commitment and Stakeholder Involvement
(1) Top-level management commitment
Launching Six Sigma in a company is a strategic management decision that needs to be initiated by top-level management. All the elements of the framework, as well as the formalized improvement strategy, need top-level management commitment for successful execution. Especially, without a strong commitment on the part of top-level management, the training program and project team activities are seldom successful. Although not directly active in the day-to-day improvement projects, the role of top-level management as leaders, project sponsors and advocates is crucial. Pragmatic management is required, not just lip service, as the top-level management commits itself and the company to drive the initiative for several years and into every corner of the company.
There are numerous pragmatic ways for the CEO (chief executive officer) to manifest his commitment. First, in setting the vision and long-term or short-term goal for Six Sigma, the CEO should play a direct role. Second, the CEO should allocate appropriate resources in order to implement such Six Sigma programs as training schemes, project team activities and measurement system. Third, the CEO should regularly check the progress of the Six Sigma program to determine whether there are any problems which might hinder its success. He should listen to Six Sigma reports and make comments on the progress of Six Sigma. Fourth, he should hold a Six Sigma presentation seminar regularly, say twice a year, in which the results of the project team are presented and good results rewarded financially. Finally, he should hold a Champion Day regularly, say once in every other month, in which Champions (upper managers) are educated by specially invited speakers and he should discuss the progress of Six Sigma with the Champions.
It is also the responsibility of top-level management to set “stretch goals” for the Six Sigma initiative. Stretch goals are tough and demanding, but are usually achievable. Some companies set the stretch goal for process performance at 6 sigma or 3.4 DPMO for all critical-to-customer characteristics.
However, the goals can also be set incrementally, by stating instead the annual improvement rate in process performance.
The industry standard is to reduce DPMO by 50% annually.
(2) Stakeholder involvement
Stakeholder involvement means that the hearts and minds of employees, suppliers, customers, owners and even society should be involved in the improvement methodology of Six Sigma for a company. In order to meet the goal set for improvements in process performance and to complete the improvement projects of a Six Sigma initiative, top-level management commitment is simply not enough. The company needs active support and direct involvement from stakeholders.
Employees in a company constitute the most important group of stakeholders. They carry out the majority of improvement projects and must be actively involved. The Six Sigma management is built to ensure this involvement through various practices, such as training courses, project team activities and evaluation of process performance. Suppliers also need to be involved in a Six Sigma initiative.
A Six Sigma company usually encourages its key suppliers to have their own Six Sigma programs. To support suppliers, it is common for Six Sigma companies to have suppliers sharing their performance data for the products purchased and to offer them participation at in-house training courses in Six Sigma. It is also common for Six Sigma companies to help small suppliers financially in pursuing Six Sigma programs by inviting them to share their experiences together in report sessions of project team activities. The reason for this type of involvement is to have the variation in the suppliers’ products transferred to the company’s processes so that most of the process improvement projects carried out on suppliers’ processes would result in improvement of the performance.
Customers play key roles in a Six Sigma initiative. Customer satisfaction is one of the major objectives for a Six Sigma company. Customers should be involved in specific activities such as identifying the critical-to-customer (CTC) characteristics of the products and processes. CTC is a subset of CTQ from the viewpoint of the customers. Having identified the CTC requirements, the customers are also asked to specify the desired value of the characteristic, i.e., the target value and the definition of a defect for the characteristic, or the specification limits. This vital information is utilized in Six Sigma as a basis for measuring the performance of processes. In particular, the R&D part of a company should know the CTC requirements and should listen to the voice of customers (VOC) in order to reflect the VOC in developing new products.