“Lean Manufacturing
for the Value-added Hardwood Industry”
Submitted by:
The Pennsylvania State University
College of Agricultural Sciences
School of Forest Resources
Submitted to:
Pennsylvania Hardwoods Development Council
2301 North Cameron Street, Room 310
Harrisburg, PA
17110-9408
Project
Dates: July 1, 2003 to June 30, 2004
Project
Abstract:
The Pennsylvania wood
products industry suffers from increasing competition that is causing a
reduction in jobs and economic value-added to the Commonwealth. One manufacturing strategy that holds great
promise for increasing the competitiveness of secondary wood producers is lean
manufacturing. Many of Pennsylvania’s leading wood
products manufacturing companies are already involved with lean manufacturing,
or are trying to determine how lean best fits their enterprise; however, we
believe that strictly applying lean techniques to a wood manufacturing
environment may in fact do more harm than good. We therefore propose to conduct applied research that will
clarify and quantify how secondary wood manufacturers should use lean. We will then compare these results to
existing lean manufacturing curricula to determine how they should be modified.
Finally, we will deliver an executive-level educational program to inform
industry leaders about lean as a strategy.
Submitted
by:
_______________________ _______________________
Charles D. Ray Charles
Strauss, Director
Assistant Professor School
of Forest Resources
Wood
Products Program
School
of Forest Resources _______________________
Robert
Killoren, Asst. VP for Research
For
negotiation of awards, contact
P.
M. Antolosky, Assoc. Director
_______________________ Office of
Sponsored Programs
Judd
H. Michael 110
Technology Center Bldg.
Associate
Professor 200
Innovation Blvd.
Wood
Products Program University
Park, PA 16802-1003
School
of Forest Resources (814)
863-0883 (telephone)
(814)
865-3377 (Fax)
NEEDS STATEMENT
Problem #1 - Lean manufacturing has the
potential to transform secondary wood producers into more efficient, profitable
enterprises. However, traditional lean
techniques can’t be strictly applied to our industry.
Lean
manufacturing has become the de facto standard for companies trying to upgrade
their competitive capabilities in today’s global market. Lean manufacturing is a strategic business system that has been
used with great success at world-class companies like Toyota. Lean has been defined as a systematic
approach to identifying and eliminating waste through continuous process
improvement. Some of the basis tenets
of lean would include: just-in-time
production, set-up reduction, total productive maintenance, and the “5S”
system. The 5S system provides a
foundation that allows a manufacturer to deliver high quality products in the
right quantity at the right time to satisfy customer needs. Bottom line benefits for companies
practicing the 5S system include reduced waste, improved safety, easier maintenance,
higher product quality, and improved profitability.
A
number of Pennsylvania’s leading wood products manufacturers are already
working to adopt lean manufacturing, or are trying to determine how lean best
fits their enterprise. As they do so,
they come to recognize the potential of the concept to increase their
competitiveness, and to improve their bottom line. However, these same companies find that certain aspects of lean
manufacturing being taught by consultants and industrial engineers will create
conflicts in the recovery/inventory/cost equation of their businesses…conflicts
that can be traced to the inherent variability in the raw material itself, the
wood.
For
instance, one of these special issues occurs in the rough mill of all secondary
wood products producers. Here, the more
advanced companies attempt to optimize recovery through computer-aided edging,
trimming, and defecting. Since the
major raw material cost of these companies is the wood itself, any successful
optimization of processing which increases yield lowers raw material cost and
therefore the profitability of the firm.
However,
a principle tenet of lean manufacturing is to eliminate waste in all its forms,
of which the primary is inventory.
Through pull-type lean production techniques, called kanban systems,
firms learn to produce only those components needed for the current production
file. In manufacturing products that
utilize homogeneous raw material (such as steel for automobiles) kanban works
well; parts are machined from the raw steel stock as required, and the
remaining stock awaits the next call from the system.
In
wood products manufacture, however, a call for certain parts of a cabinet
requires those components to be cut from a wood stock from which defects must
be cut. The yield optimization
procedures mentioned above, in yielding the necessary components for the
cutting schedule, also produce by-product components that are typically stored
in an in-process inventory for use when called for in future production
schedules. In eliminating this
in-process inventory, many companies find themselves discarding “good wood”,
thereby lowering their yield and increasing their raw material cost. As they do so, they sometimes conclude that
the decrease in yield cannot be justified by any increase in efficiency
due to elimination of the in-process inventory. As a result, many companies modify their lean concept to allow
for in-process inventory under certain or all conditions, or they abandon the
effort completely through frustration.
In at least one case, we have seen the company conclude that
“just-in-time” for them meant to produce as large an inventory as
possible, so as to be better able to deliver on-demand to their customer base.
As
traditional lean experiences fail to resolve these wood-related special issues,
many companies find their lean efforts stalled and employee motivation
waning. Issues without answers will
kill even the best of concepts. We
believe that these wood-related special issues can be resolved, but that
without detailed research in actual facilities and under specific conditions of
raw material supply, production schedule, and plant flow, these problems will
continue to frustrate our most diligent companies. We therefore propose to initiate an in-depth, production-floor
based research initiative to define and rectify issues related to the use of
lean manufacturing in the secondary hardwood industry. Specific actions will include developing
solutions for specific combinations of wood species and grades, and how these
relate to production requirements and plant layout.
Problem #2 - Lean manufacturing curricula currently
exist, and are being used as training tools for Pennsylvania wood
producers. If, as we believe, these
curricula contain information that is counterproductive for our producers then
how can we determine which portions of the curricula must be modified?
Secondary wood producers such as Yorktowne Cabinets have made commitments to adopting lean manufacturing as a strategy. However, these companies are using resources that often have little or no knowledge of the unique challenges faced when using wood as a raw material. We have viewed the materials used as tools to train our producers, and have also spent time in mills where lean is being rolled out. A prime example is the National Institute of Standards and Technology (NIST) Principles of Lean Manufacturing curriculum that is being delivered to a Pennsylvania furniture producer. These training materials have never been customized for our industry because no one has ever conducted the research needed to determine those portions of lean that can and cannot be directly applied to a wood producer.
As lean manufacturing becomes more widely used by secondary wood producers it will be even more important that our producers know how lean should be applied to their business. Without research to clarify these issues then we will never know how the existing curricula are “missing the mark” for our producers. Only after the proposed research is completed will we be able to detail where existing curricula must be modified.
GOALS AND OBJECTIVES
The overall goal of this
project is to enable Pennsylvania hardwood producers to be more competitive via
a greater understanding and application of the principles of lean
manufacturing, specifically as it comes to be defined through the advances of
this research.
More specifically, we have
the following major research goals:
1) Determine the impact on yield, inventory
levels, and throughput of traditional lean principles in wood
manufacturing firms. These three
factors will be tied together with financial benchmarks such as margins and
profitability.
2) Develop quantitative relationships between these three
factors based on state-of-the-art wood manufacturing strategies, and develop
the managerial implications of these relationships.
3) Re-define lean manufacturing for wood products
producers, and quantify the benefit of the re-defined techniques over
traditional techniques in actual plant trials.
We propose three distinct objectives for this
project:
1. To conduct applied research at PA secondary wood producers that will determine how and where lean manufacturing can and cannot be applied to those producers. This will in turn provide knowledge to determine effects of lean strategies on a producer’s bottom line.
2. Develop knowledge that can be used as a basis for modifying existing lean manufacturing curricula to fit the unique circumstances of the wood industry. These modifications could then be the basis for a set of training tools for use by such groups as MANTEC and Penn State to teach the tenets of lean manufacturing to the wood industry. Our specific objective is to compare two lean manufacturing curricula (that have been used in the past year to train PA wood producers) to our research findings.
3. Deliver an educational program to educate wood industry management and others (e.g., Industrial Resources Centers) about the potentials for lean manufacturing as a strategy in the hardwood industry.
RESEARCH METHODOLOGY
Data for the research
component of this project will take place in the mills of Pennsylvania wood
producers. These producers have been
contacted to assure their willingness to provide access to their facilities and
people.
The research team will use
the following methodology to achieve the stated goals:
Relationship between
Methods, Objectives, and Timetable - Our
research methods have been designed to allow all objectives to be attained
within the allotted time. The project
schedule has been planned based on our past experiences with what can be
accomplished in a given amount of time.
PROJECT SCHEDULE
Reviewers should note that
Dr. Ray has already been in contact with a Dr. Xiaoqui Zuo, a
post-doctorate researcher currently employed at North Carolina State University
(see her background below). We have
also contacted multiple producers to ensure their cooperation and interest in
the project.
Objectives/Activity Dates
Project start date July
1, 2003
Delivery of educational program Spring
2004
Final report completed June
15, 2004
Presentation of results to sponsors June
& July, 2004
(Will include report to HDC board
and individual members)
Note:
It is assumed that most if not all of the prospective research partners will be determined prior to the start date for the project.
OUTCOMES AND DELIVERABLES
Anticipated outcomes & benefits
§
Participating
Pennsylvania companies will become the first companies in the world to have
access to lean manufacturing techniques especially adapted to the manufacture
of wood products.
§
Leading
companies implementing lean manufacturing in Pennsylvania that volunteer to
become case studies for the research program will receive assistance from the
engineering and wood products resources at Penn State to help solve their
particular lean manufacturing issues.
§
This
project will build on the 2001-2002 research conducted at Yorktowne Cabinets
and funded by the HDC on the Human Factors of a Transition to Lean
Manufacturing. Yorktowne’s experience
in that project proved that such a transformation is not possible without
detailed attention to the effective combination of human issues with the
specific problems of lean theories in wood producing operations.
§ Results of our case studies,
when applied to the development of a general lean model, will help all
secondary wood producers throughout the state as it is disseminated through the
efforts of the PSU Wood Products Extension program and its partners.
Deliverables
We
view the educational program as a means to inform industry leaders about the
value of lean manufacturing as a strategy that can make a significant impact on
their business. We propose to co-host
this program with the Pennsylvania Forest Products Association (PFPA) and
MANTEC as partners. This collaborative
relationship will assure a wider dissemination of the program. This program will be held in conjunction
with the WoodPro 2004 Special Issues Forum.
ORGANIZATIONAL CAPACITY
AND PERSONNEL
WoodPro, the wood products extension
arm of Penn State’s School of Forest Resources, has ample facilities to conduct
this project. With world-class
computing and analytical facilities, access to some of the brightest students
from around the world, and all the considerable resources of The Pennsylvania
State University, WoodPro offers the Pennsylvania wood products industry a
dedicated and valuable array of resources to benchmark and improve critical
areas of their operations. The WoodPro
Extension Program has aligned a team of interdisciplinary researchers from the
Wood Products, Wood Science, and Wood Products Marketing and Management
programs of the School of Forest Resources; the Business Logistics program of
the Smeal College of Business; the Harold and Inge Marcus Department of
Industrial Engineering; and PennTAP, among others, to address relevant wood
products issues as they surface. The
lean manufacturing research project outlined in this proposal will be the
initial research project implemented under the WoodPro umbrella, and will
establish the industrial standard for future research projects of the group.
The proposed team of
investigators allows a unique interdisciplinary view of the research questions,
as well as preparation and delivery of the lean curriculum. The primary members of the team are:
Dr. Charles D. Ray, Assistant Professor of Wood Products Operations, Penn
State. Dr. Ray’s specialty is in the
area of operations research, specifically those operational issues that
confront the majority of the wood products sector. He is new to the Pennsylvania hardwood industry and Penn State,
having spent fifteen years in research and quality management for two large
building products corporations, Temple-Inland and Louisiana-Pacific. Prior to that, he spent five years in the
petroleum industry in various manufacturing positions. Dr. Ray is especially interested in the
operational problems that are unique in some aspect to the hardwood industry,
but related to wood research that he has studied in the past; such as wood drying,
operational simulation and analysis, and process and quality control. Current projects include the adaptation of
combined engineering/statistical process control techniques to optimization of
hardwood kiln schedules (with Bradford Hardwood); the design of a hardwood log
debarker efficacy study (with as many as twenty participating sawmills through
the cooperative effort of the PFPA); and the optimization of potentially
conflicting performance goals in a sawmill such as yield, over-run, and production
(with Pine Creek/Bingaman and Sons Lumber).
Educational Background
PhD – Forest Science/Operations Research – Texas A&M
University
BSF – Forest Management – Stephen F. Austin State
University
Dr. Judd H. Michael, Associate Professor of Wood Business Management,
Penn State.
Dr. Michael’s specialty is in
the area of business management issues facing the forest products
industry. Current projects include
studies of safety and managerial decision-making at wood manufacturers. Recent projects include an HDC-funded
project that examined the attitudes and behaviors of wood production employees
during a change to lean manufacturing.
He has also examined human capital issues related to retention,
motivation, and performance at wood production facilities owned by such
companies as Louisiana-Pacific, International Paper, Pennsylvania House, and
Weaber Lumber.
Dr. Michael was previously an
Assistant Professor and Extension Wood Products Specialist at Texas A&M
University and a Market Analyst at the Center for Forest Products Marketing at
Virginia Tech University.
Educational Background
PhD - Wood Products Business- Penn State
MBA - Texas A&M University
BBA- Marketing - Texas A&M University
Mr. Lee Stover, Senior Research Assistant, Penn State. Mr. Stover’s specialties are in the areas of
troubleshooting wood and wood products processing and manufacturing problems,
providing and facilitating professional development training programs in
hardwood lumber grading, hardwood log grading, basic and advanced lumber dry
kiln operation, wood anatomy and identification, wood preservation and
certification, chain saw safety and operation, and basic wood science for
management and staff of wood products operations. Additionally, he has been directly involved with the support of
the Pennsylvania Wood Products Industry on a one-to-one basis through Penn
State’s Extension program for over 15 years.
Educational Background
MS – Solid State Science/Polymer Science – Penn State
University
BS – Biophysics – Penn State University
Dr. Xiaoqui Zuo, Post-Doctorate Researcher, currently at North Carolina
State. Dr. Zuo has played a critical
role in the secondary processing research at NC State, where she researched and
developed computer models that have been used to improve the USDA Forest
Service Romi-Rip Software. Her
work has included the optimization of lumber grade mix with respect to lumber cost and
processing cost by applying statistical approaches for wood component
manufacturing. She implemented
experimental design and data analysis on parameter limits of static priority
values of computerized chop saw for lumber cut-up operations; developed the
Gang Ripsaw Optimizer (GRO) program to improve rough mill conversion efficiency
in the Romi-Rip 3.0 simulator; and conducted tests on studying optimization of
cut-off saws in lumber cut-up operations.
Educational
Background
Ph.D. Wood
Products, May 2003 - North Carolina State University
M.S.
Statistics – Industrial Statistics Concentration - North Carolina State
University
M.S. Wood Processing and Wood Composites - Chinese Academy of Forestry, Beijing, China.
B.S. Wood Science and Technology - Northeast Forestry
University, Harbin, China.
Mr. Vijay Wadhwa, Graduate Research Assistant, Penn State Industrial Engineering. Mr. Wadhwa, as an engineer for Kirloskar Oil Engines Limited, India’s
largest diesel engine production company, worked on
optimizing the manufacturing process of turbo-coolers by designing and
manufacturing jigs. In his many
research projects, Mr. Wadhwa has devised a supply chain strategy for
transportation sourcing for GE medical systems; designed a
ranking system for business and engineering schools under multi criterion
decision making; completed summer Internship at Tarapur Atomic Power Station,
in which was a part of team working on replacement of tube leak repair and
replacement of emergency condenser; and worked on the design and fabrication of
a back-to-back rotary hydraulic torque actuator, which was the first of its
kind in India. Mr. Wadhwa’s current
areas of research include multi-criterion optimization, scheduling models,
procurement and supply chain management, dynamics of machinery, design of
machine elements, applied mechanics, strength of materials, and numerical
methods in computer applications.
Educational Background
Doctoral Candidate, Industrial
Engineering - Penn State
Bachelor of Engineering, Mechanical
Engineering - University of Pune, India (Vishwakarma Institute of Technology)
SUPPORT FROM INDUSTRY
This project will benefit
from the collaboration of MANTEC as a partner in results interpretation and
dissemination. We propose to use a
“Lean 101” type of existing curriculum for comparison to our results; such a
curriculum is currently utilized by MANTEC.
MANTEC will also work closely with PSU as a co-sponsor of the industry
educational program.
The following Pennsylvania
wood manufacturers have indicated their support for this project. These persons have stated that they are
interested in the results of this project and are willing to work with us to
provide access to their facilities.
Should this grant be approved, other producers will be contacted in consultation
with HDC to ensure we are working with a representative sample of producers.
Joe Stenglein, VP for Operations - Rodney Holtzapple, VP Component Manufacturing
Yorktowne Cabinets
(Mifflinburg and Red Lion plants)
Keith Atherholt, President
Lewis Lumber Products, LLC
Barb Conti
Matson Lumber Company
Robert Bitler, Plant Manager
Mills Pride
ACKNOWLEDGMENT OF
FINANCIAL SUPPORT FROM PDA
All publications derived from
or associated with these funds will acknowledge the financial support of the Pennsylvania
Department of Agriculture by inclusion of the “Products for the Planet” logo as
well as HDC’s “PA Hardwoods Stands for Quality” logo. Any oral presentations will also acknowledge PDA/HDC support.