Liquid Lean: Developing Lean Culture in the Process Industries »

Raymond C. Floyd is senior vice president of Suncor Energy. Prior to joining Suncor, Ray retired from Exxon Mobil, where he spent more than 20 years and where he most recently served as global manager of manufacturing services. Previously, he was with General Motors for more than 10 years. Ray is generally recognized as one of North America’s “early adopters” of lean manufacturing and is among the very first worldwide to adapt lean technologies for use in the chemical and process industries.

Following the practices described in this book, Ray led the first chemical business to receive the Shingo Prize and has led two separate businesses that have been designated as one of “America’s ten best plants” by IndustryWeek magazine. Ray is the only person to lead businesses in both chemical and mechanical manufacturing to receive that designation. As site manager for Exxon’s massive Baytown chemical plant, Ray led the team that was designated as “best maintenance organization in large industry” by Maintenance Technology magazine. Ray received the Andersen Consulting award for “excellence in managing the human side of change.”

Ray has degrees in chemical engineering, business administration, and law. He is professionally licensed as an engineer, attorney-at-law, and patent attorney. He has also received international senior executive development at the Institute for International Studies and Training in Japan and the Institute for Management Development in Switzerland. Ray was appointed by President Reagan to represent the United States at the Japan Business Study Program as a guest of Japan’s Ministry of International Trade and Industry. Ray’s wife, Marsha, is also an attorney-at-law. Ray and Marsha have two daughters, who are both physicians, and five grandchildren.

While Lean practices have been successfully implemented into the process industry with excellent results for over 20 years (including the author’s own award winning example at Exxon Chemical), that industry has been especially slow in adopting Lean. Part of the problem is that the process industry needs its own version of Lean. The larger part of the problem is resistance to transformational change, a barrier that can only be overcome with effective leadership and results-oriented planning that engages rather than excludes all stakeholders.

All companies can benefit from lean, but not all do.

Written by Raymond Floyd, an unparalleled leader of Lean transformations, Liquid Lean: Developing Lean Culture in the Process Industries provides potential process industry change agents with the no-nonsense guide needed to eliminate waste and achieve sustainable optimal efficiency. Presenting lessons in lean as they apply within the liquid industries, the book focuses on developing the four measures of Lean as defined by the Shingo Award:

• Business Results
• Consistent Lean Enterprise Culture
• Continuous Process Improvement
• Cultural Enablers

Illustrated with his own success stories, Floyd describes business results, Lean enterprise thinking, and policy deployment in process industry terms. He offers detailed theory, practice, and examples of continuous process improvement, and describes the leadership and defines the ethics needed to evolve and sustain Lean transformation. Floyd lays out the specific steps needed during the first six months of transformation and the benchmarks to be achieved during the first two years of implementation. All companies can benefit from Lean; this book makes sure that those who want it, know how.

Foreword xv

Acknowledgments xix

Chapter 1 Business Results in Process Industries 1

Introduction 1

How This Book Is Organized: Shingo Prize Criteria 2

Business Results: Improve Performance with Lean 3

Beat the Competition with Very Flexible Manufacturing 4

Improve Performance with Lean and an Engaged Workforce 7

Gain First Mover Advantage 10

Achieve Prompt Improvement 13

All Companies Can Benefit from Lean, but Not All Do 14

Disruptive Changes 15

Why the Process Industry Needs Its Own Version of Lean 16

Transforming the Raw Material 17

Indirect Material Transformations 18

Time as an Independent Element of Production 19

Special Case: Continuous Processing 21

Notes 22

Chapter 2 Lean Enterprise Thinking 23

Introduction 23

Developing a Western Lean-Enabling Culture 25

Historical Perspective 27

Early View of Lean: Just-in-Time Manufacturing 27

Early View of Engaged Employees: Quality Circles 30

The Eight Sources of Waste 32

The Relationship between Inventory and Operating Problems 34

Value Streams and Support Processes 36

Lean Values: Inventory Reductions Can Sustain Improvements 39

Lean Values: Culture of Engagement 40

Notes 42

Chapter 3 Policy Deployment 43

Introduction 43

Large Events and Small Events 44

A Strategic View of Manufacturing 45

Strategic Alignment and Necessary Boundaries 48

Prerequisites for Structured Autonomous Improvement 50

Strategic Direction 52

The Role of Communication in Achieving Strategic Alignment 54

Limiting Opportunities for Improvement 59

Deploying Strategic Intent 60

Simple Statement of the Goal 60

Prose Statement of Intended Future State 61

Prose Statement of Current Reality 61

Objective Measures of Progress 61

Interim Performance Targets 62

Formatting Goal Statement 62

Translating Strategic Intent throughout the Organization 63

Framework for Action 69

How Quality Stations Work 70

Display the Team Goals 71

Display What the Team Has Completed 73

Show the Work in Progress 74

Provide Interactive Space 74

Policy Deployment in Action: Conversations at a Quality Station 75

Internal Team Conversations 76

External Team Conversations 79

Chapter 4 Improving Flexibility and Availability in Mechanical Equipment 81

Introduction 81

Single Minute Exchange of Dies System 82

What We Can Learn from NASCAR 84

Translating NASCAR Success to Our Plants 85

Preparation 85

Teamwork 88

Equipment 89

How to Use the SMED Concept 91

The Five Key Components of SMED Practice 92

Separation of Activities 94

Modification of Rate-Limiting Internal Activities 99

Modification of the Work Team 102

Modification of the Equipment 103

Modify Equipment to Maximize Efficiency 104

Preparing for Events and Sustaining the Improvements 109

Outcome of Improvements 110

Chapter 5 Operational Planning to Improve Chemical Transitions 113

Introduction 113

The Causes of Chemical Inflexibility 114

Chemical Contamination 114

Unintended Conversions 114

Fixed Sequence Variable Volume Production 115

The Concept: A Comprehensive Approach to the Production Cycle 116

What We Can Learn from the New York Subway System 117

The Four Components of FSVV Practice 119

Typical Operating Problems 120

Changes in Process Conditions 120

Additives and Modifiers 120

Changes in Reactive Chemicals 121

The Fixed Sequence 121

Establishing a Fixed Sequence 122

FSVV Inventory Policy 126

Days of Demand in Inventory 126

ABC Inventories 127

FSVV Inventory Policy 128

Wheels within Wheels 130

Variable Volume Scheduling 131

Continuous Improvement 134

Sustainability over Time 136

The “Exception” Problem 136

Chapter 6 Assessment and Improvement of Other Accumulations 139

Introduction 139

Structural Differences between Process Industries and Mechanical Manufacturing 140

Small Accumulations in Process Industries 141

Chapter 7 Statistical Quality Improvement 153

Introduction 153

The Power of Statistical Quality Combined with Lean Manufacturing 153

Statistical Methods in the Process Industries 154

Basic Statistical Concepts 156

Six Sigma 157

Process Improvement before Statistical Analysis 159

Process Improvement Using Statistical Analysis 160

Operational Improvement with Statistical Analysis 161

Statistical Models of Process Performance 162

Using Statistical Analysis: The Process Capability Index 163

Capable Processes 164

Incapable Processes 165

Using SPC at the Frontline in a Process Plant 168

Using a Run Chart 169

When the Run Chart Says the Process Is Operating Normally 169

When the Run Chart Says the Process Is Producing an Unexpected Result 171

When the Run Chart Says the Process Is “Nearly Normal,” but Results Are Drifting 172

Avoid the Waste of Excess Quality 174

Notes 175

Chapter 8 Mistake Proofing or Poka-Yoke 177

Introduction 177

Mistakes Come in Two Parts 178

The Consequences of Mistakes 179

Mistake Proofing: Preventing Consequences 180

Mistake Proofing Is Common Knowledge 180

Warning Systems 181

Four Types of Warning Systems 182

Poka-Yoke Practice 1: Physical Separation 182

Poka-Yoke Practice 2: Visual Signals 185

Poka-Yoke Practice 3: Pattern Recognition 189

Poka-Yoke Practice 4: Simple Physical Devices and Other Minor Changes 191

Approaching Perfect Production 192

Chapter 9 Equipment Reliability and Operator Care 195

Introduction 195

Finding the Cause: Separating the Processes from the Equipment 195

The Role of Equipment Reliability in Lean Practice 196

Operator Care 197

The Fundamentals of Operator Care 199

Phase I: Basic Care 199

Keep the Equipment Clean 201

Keep the Equipment Cool 216

Keep the Equipment Lubricated 220

Phase II: Advanced Techniques 221

Define Your Goals 221

Change the Oil and the Filters 222

Pay Attention 223

Autonomous Maintenance as an Element in Improvement 225

Autonomous Actions 229

Chapter 10 Lean Leadership and Ethics: Creating an Engaged Workforce 235

Introduction 235

Improvement Experiences at the Frontline 237

The Structure of Employee Engagement 238

The Elements of Engagement 238

Clear Goals 239

Skills Necessary to Achieve the Goals 240

Time to Make Improvements 243

Access to the Resources That Cause Change 244

Framework for Action 246

Engage Frontline Teams 247

What to Do When Teams Do Not Engage 248

Refresh the Understanding of Small Event Improvement 249

The Subjective Elements of Engagement 250

Lack of Trust in Management 251

Disruption by Team Members 253

Intentional Disruption 254

Unintentional Disruption 256

Industrial Culture 257

Notes 258

Chapter 11 People Development 259

Introduction 259

Impact of Competent People on Organizational Performance 260

Competence Defined 261

Basic Competence 262

Basic Competence Development 264

Superior Performance 264

Critical Positions 266

Finding the Right Management Tool 267

A Quick Description of Our Analysis 267

The Influence of Critical Positions on Improvement 267

Individual Contributors 268

Subject Matter Experts or Mentors 269

Leaders 271

Identifying Critical Roles in Your Organization 271

Common Misconceptions 272

Developing Highly Competent People 274

Beginning the Process 275

Prompt Improvement 277

Sustaining the Improvement 278

Chapter 12 Leadership: Initiating and Sustaining Lean Operations 281

Introduction 281

Transforming an Organization and Sustaining the Change 281

Sustaining Improvement 284

Process Documentation 285

The Role of Transformational Leadership 286

Sustaining Leadership 289

When the Leader Is Not the CEO 290

Getting Started 292

The Value of 6-Month Intervals 292

Three Attributes of a Successful Beginning 293

The Value of Shared Vision 294

The Value of Immediate Pilot Projects 294

The Value of New Tools 298

Notes 307

Index 309

About the Author 325