Factory Fitness, Lean

A Factory can become too Lean, but never too Fit (Factory Fitness Part 1)

Written by Kasra Ferdows – McDonough School of Business, Georgetown University, Washington, DC, USA, and Fritz Thurnheer – Hydro Aluminium Extrusion Group, Lausanne, Switzerland. Condensed and published in onTRACC with permission of Emerald Insight and the authors.

Executive Summary

Image belongs to CCI

Image belongs to CCI

Over a 15-year period, Kasra Ferdows and Fritz Thurnheer examined the process of design, launch, and management of a fitness programme in 42 factories of the Hydro Aluminium Extrusion Group (HAEG) across five continents. The design was based on the ‘Sand Cone’ Model proposed by Ferdows and DeMeyer, but the sequence of capabilities was modified to improve safety, reduce process variability, codify and share tacit production know-how, improve responsiveness, and improve labour and machine efficiency. They recently published a paper in which they introduced the notion of ‘factory fitness’ and presented the lessons learnt during these 15 years. This four-part blog series is a shortened version of their original piece.

Introducing Factory Fitness

There is a difference between becoming lean and becoming fit. One requires taking the fat out, the other requires building muscles and agility. A production system becomes leaner when it reduces waste and activities that do not add value for its customers; it becomes fitter when it improves and expands its core capabilities. Being fit and lean are innately complementary, and there is no sharp line between where one ends and the other begins. But a lean production system that ignores working on fitness – even if it belongs to the legendary Toyota – becomes fragile and can eventually wither, whereas a fit production system can stay lean under changing conditions and over long periods.

We base this proposition on our experience with a 15-year long programme for strengthening core production capabilities in 42 factories of HAEG— one of the largest producers of extruded aluminium products in the world. Although its factories are spread across five continents, they produce fairly similar products, hence presented a unique research opportunity for comparing their performances.

The theory behind factory fitness is that excellence in production is built on a common set of core capabilities which are easier to get in place starting with one particular type of activity followed by another. Each activity makes implementation of the next one easier, and each succeeding activity expands and enriches effectiveness of the preceding activities. A successful fitness regimen can result in a virtuous cycle that will allow a factory to improve its performance along multiple yardsticks and make it more agile to respond to changing market mandates.

We would like to clarify two points at the outset. First, a production fitness programme is neither an alternative nor a substitute for lean manufacturing, agile manufacturing, or other such programmes. It complements them – in fact, makes it easier to carry them out. Second, most of the activities in this programme are not really new to factories – they include the usual improvement goals, such as reducing safety incidents, improving yields, improving delivery reliability. The difference is in the pattern and intensity with which they are carried out. We believe that fitness explains some of the deep and difficult-to-observe practices and cultural norms in excellent manufacturing organisations.

Can any single model for building production fitness be used in all factories – regardless of the industry, region of the world, firm’s business strategy, and so on?  We believe it can.  Thirty years ago, a similar question must have been raised about lean manufacturing. Many must have wondered whether a factory producing, say, chemicals in Brazil could follow a similar approach for becoming leaner as a factory assembling cars in Japan. Not many still do. History has shown that the general model for lean manufacturing based on studying a single company (Toyota) can be applied essentially in any factory. We believe the same can happen with production fitness.

The next post in this series will cover The Model for the Factory Fitness Programme. Click here to view all the posts in this series. 

This paper first appeared in the Issue 9 of Emerald Insight Journal, in 2010. Click here to view the full paper.

This article first appeared in onTRACC in December 2012.
 
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