IEN: What is your definition of lean manufacturing? Does it include Six Sigma, flexible manufacturing, plug-and-play?
Eaton Cutler-Hammer: We prefer to refer to it as Lean Enterprise vs. Lean Manufacturing, simply because Lean Manufacturing implies we are looking at process on the factory floor only. In the case of Cutler-Hammer, we are using Lean methods to look at our entire product delivery system (PDS), which extends from our customer''s customer all the way through to our suppliers.
Essentially what this means is that we are using Lean to determine how we can remove all the non-value add steps in the entire PDS so that we can streamline our process, remove inefficiencies, drive quality improvements, and reduce the cycle time for our customers. Return on Investment is the name of the game today, and Lean Enterprise strives to help our customers achieve quicker ROI.
Lean Manufacturing also means Reliability through Repeatability. What we mean by this is that through the concepts of preconfigured/engineered equipment packages, we are reducing the frequency of having to engineer every project from the beginning. Our engineers can utilize pre-engineered configurations, eliminating the potential for human error on the front end, while on the back end our shop floor associates become more familiar with designs that they are repetitively building.
To summarize, we define Lean as:
- A method to optimize our Product Delivery System
- Extends from Customer to Cutler-Hammer through to our Supplier
- Calibrates us to Customer Demand: Product and Lead-time
- Maximizes speed and flexibility
- Minimizes waste throughout the process.
While programs like Six Sigma are part of the Cutler-Hammer culture today, we view this as one element in our prescriptive process tools that are used by all of our facilities to improve our processes and quality. In fact, Cutler-Hammer has instituted a Prescriptive Process Tool Kit (PPTK), which includes three primary elements, two of which are Six Sigma and Lean Enterprise. The third element is EBEA (Eaton Business Excellence Assessment), which is based on the fundaments of Malcom Baldrige.
IEN: Does lean manufacturing require significant automation?
Eaton Cutler-Hammer: This depends on the degree of automation already used in the facility today. In the case of Cutler-Hammer, we are highly automated both in the front-end and back-end part of our operations. We have driven lean configured products into our field-based pricing tools, which allow our field sales engineers to not only provide a price, but also provide equipment layout drawings, base-plan details, wire schematics for MCCs, etc. With these tools, the sales engineer and the customer can generate a set of approval drawings immediately, in some cases, and electronically forward these to our plants for immediate manufacture. There is considerable value in this. For example, fewer hands are required to touch or generate drawings, thus reducing the potential for human error. Additionally, we can use these electronic files to drive the manufacturing information onto the shop floor.
IEN: What are the major challenges facing the implementation of the lean enterprise? How can they be addressed?
Eaton Cutler-Hammer: There are several:
-- Convincing our salespeople and customers that this is not the flavor of the day type of program. Eaton Cutler-Hammer has invested significant resources and energy into this program. All of our product lines are required to complete Lean implementation over the course of 2002, some were already completed this year. Each of our product lines commits approximately 10 resources (personnel) to 4 full weeks of training at the University of Tennessee.
-- When people hear the word "Lean" they automatically assume we are taking something away in a negative sense. In reality, we are taking away things in a positive sense -- that being all the non-value add steps in the Product Delivery System. Cutler-Hammer has actually attached a service mark (SM) to define the program; we call it Right.Now.
-- Lean Enterprise can be perceived as a program or attempt on our part to force-feed the customer into accepting a product that only we want to build. This could not be further from the truth. The preconfigured product options in the Right.Now offering were developed based on two areas of input: first, through historical analysis of several years'' worth of past customer orders and secondly, through direct feedback from our customers, sales engineers, and application engineers. As the program progresses, we intend to offer more options within the program. In the Right.Now Medium Voltage Switchgear offering today we are capable of offering a multitude of options that include:
- Main Breaker cells
- Feeder Breaker cells
- Tie Breaker cells
- Motor Feeder cells
- Generator Breaker cells
- Metering options including Cutler-Hammer electronic meters plus other brands (ie: Power Measurements)
- Relaying options like meters including Cutler-Hammer electronic relays and other brands (ie: Basler & Multilin)
- Auto Throw-Over Transfer Schemes
and more.
The analogy we often use to describe the program is that of purchasing a vehicle. When one goes to a car dealer to purchase a car, you start with the base model. You then sit down with the dealer and pick and choose the various preconfigured option packages to customize the car to your liking. For example, you choose a V8 engine instead of a V6 and maybe you prefer leather upholstery instead of cloth and so forth. Lean configured product, or Right.Now product, works along the same principles - however, at a more complex level, obviously. We do want to be clear, however, in that we recognize that this may not be for every customer and therefore we are still open to those customers that wish to customize their equipment from start to finish. The difference is that you lose the lead time benefits you have through the Right.Now offering.
-- The last challenge is to train our sales engineers in the concepts of solution selling vs. product selling. For years, we have trained our salespeople to sell the features, functions, and benefits of a product that you can actually see and touch. In the case of Right.Now, we are asking them to sell a customer a solution, which involves a totally different mind set. Solution selling is about understanding the customer need and then determining the right bundling of products/services to meet that customer need. Some people often confuse the bundling of products/services without first understanding the customer need as solution selling; this is exactly as it appears, simple bundling, not solution selling. We are therefore focused on educating our sales engineers on these differences.
IEN: What innovations are in store for users in the next one to five years?
Eaton Cutler-Hammer: In the very near future, customers will have the ability to go to a secure Website location and use the same electronic configuration tools that our sales engineers use today. Customers will virtually have the ability to design and configure their own engineered assemblies online and when complete submit this to us electronically for immediate manufacture. Additionally, I think our customers can expect us to search for ways in which we can integrate our own electronic tools with their electronic tools such that when they create their designs within their own software it automatically feeds that information into our own to generate equipment drawings, bills of material, and even pricing. In other words, the future holds a vision where the customer will be linked closer than ever before to our factory floor.