LMJ’s editor Andrew Putwain heads out to National Instrument’s manufacturing facility in Hungary to see how the firm has taken lean to a scientific level of precision.
National Instruments (NI), the Texan based firm opened its Hungarian manufacturing site in 2001, in the country’s second largest city, Debrecen. It’s a sleepy, leafy city on the plains near the Romanian border, with a long history and a rapidly expanding pool of high-tech manufacturers coming in to take advantage of a well-educated populace.
The factory is one of the modern examples of manufacturing that shocks visitors by looking more like a laboratory than a factory, with shining white floors and modern glass buildings. The entire site is referred to as a ‘campus’ by its staff, and with an American flag fluttering in the wind outside it definitely felt more like Silicon Valley than the former Soviet Union.
National Instruments has three manufacturing sites: a small base at its HQ in Austin and two larger sites in Penang, Malaysia and here in Hungary, it’s largest. With over 1100 employees, Debrecen is a key component. NI was founded in 1976 and last year had a revenue of over $1.24bn, meaning the ping pong tables and high tech facilities on offer to the staff in Debrecen are likely to be sticking around.
The company works on test measurement and automation and is a leading provider of computer-based technology for scientific and automated equipment.
The 35,000 worldwide employees that work in over 45 centre across the world are a base that helps to a business savvy-model of diversity and no sector makes up more than 15% of revenue.
As innovation programme manager, Botond Barabás, says their “mission is to equip engineers and scientists with tools that accelerate productivity, innovation and discovery.”
NI first began to introduce its lean programme 2006 as an exploratory measure, with only the basics. It was the first of the four phases, Debrecen sees its lean programme undertaken in. The lean programme didn’t come from management or corporate but from an engineer who was helped with support from the Austin office who organised coaching and resources.
Lean group manager for NI Hungary (NIH), Krisztián Németh tells us the history of their beginnings. This engineer began creating teams for CI and kaizens when he came back from coaching and set about organising a small but well received change programme. There was no strategy though, and the only real ideas were to help with the pain points with good cycle time reductions and other results.
In 2009 expansion began with the Lean Maturity Matrix (LMM); 40 key points of a lean check-up which aimed to see the creation of a lean culture, stated financial systems and small team-led systems.
The third phase in 2011 saw the biggest results, with continuous improvement empowered shop floor implementation, taking the lean journey to the factory and seeing it rolled out fully to across all aspects of the manufacturing process.
And the fourth phase was 2012 to the present: a CI empowered departments with the back office covered. There are 12 zones, four of which include manufacturing, the other eight are all admin and business sides, including HR, finance, legal and the other essentials to business.
Németh continues, stating that it’s an important that lean and change leaders are part of each individual department, rather than a specific and isolated lean department who don’t interact with departments every day.
NIH, Barabás adds, has several core ideas to its philosophy three of which are covered by basic thinking, office vs production and process improvement. NIH’s basic thinking includes CI as a founding principle of the NIH vision. They even have a 100 year plan; “Whatever happens our core values and culture will stay the same.”
These values are apparent everywhere in NIH (and the other sites world-wide); family days, a commitment to a work-life balance and the desire to help all employees grow and change in their roles. Staff turnover is low, around 2-3% annually, and the firm sees development as key to this. All of the lean and change programme co-ordinators had several different roles and jobs in the organisation: Barabás started off a programmer, and Nemeth was moving to HR just days after LMJ visited.
Németh is positive about this spread through all areas of the business: “We’re really proud lean has gone into the back office.” They learned from Robert O. Martichenko and his book Everything I know about lean I learned in the first grade, which the lean team swear by as their guide to a simple, common sense, fuss-free take on lean.
The third idea is process improvement: covered with simple but necessary steps, including PDCA; “Not new, but we think about the smallest activities when we use it.”, and lots of gemba walks and check-ups- which are a biannual meeting for each of the 12 departments to discuss and share ideas, problems and solutions of the issues facing them in their departments.
The staff run the check-ups themselves; the lean administrators give them support and training, but they are responsible for the strategies and targets. The check-ups include what the staff have learned, what targets they have reached, and covering the challenges and the next steps, uincluing a quality manual.
On several occasions the president of Lean Enterprise Institute Hungary has joined to give advice on feedback. Nemeth and Barabás are enthusiastic about these steps and are sure “they work because people have fun.”
Quick facts about NIH JIT:
- 2014: $US2,647 of soft savings; which includes;
- $US1,347m hard savings (money that has not had to be spent due to lean endeavours);
- CI projects floated at NIH 772 closed, 271 open
Creating NIH’s own CI culture
NIH look to Mike Rother’s Toyota Kata with “Toyota’s visible tool and techniques are built upon visible management training and routines.”
As we enter the factory floor to view the giant, laboratory like setting, where employees have to wear carbon lined lab coat and grounding strip on our shoes to protect the products from human high currents–the size and complexity of the manufacturing process becomes apparent.
The factory creates circuit board for measuring equipment. Extremely precise and complicated work, which involves microchips and a detailed cataloguing process from NIH’s in-house warehouse.
Németh, Barabás and CI and production controlling supervisor, Atilla Till, who guides us around the factory floor, admit that senior management is lagging in terms of implementation but are very supportive and believe in the goals of lean, fully. “They need to improve though.”
The processes are truly impressive, and the team are rightfully pride of their operation; incredibly fiddly, high mix-low volume work which is painstaking, and the slightest mistake could cost millions. There is also due to the nature of technology, a problem with end of life maintenance and warranties which mean the companies require a large backlog of old discontinued problems and a team employed to come up with creative solutions. This is no made to order company like Compaq with no inventory on site. Everything has to be here. But it can be made to order, meaning that in the long run, with good organisation, it is still possible to make this lean.
One of the main areas for improvement was in the warehouse: simple things like having an A, B, C, system for most to least used parts on the shelves (C at the far top, A, at an easy to grab arm level), as well as a million dollars spent on new machines, which in the long run have improved process speed and eased the technician’s workloads.
Till expounds on other differences and when they’re looking for other things to change and improve: “We are like a child asking why.”
One of these differences was seen the time for an order to be processed and delivered, which went from the worst performing process to the best; when an order came in company policy was to announce that it would be ready in 10 days. It rarely hit this, in facto it was beginning to become a problem how often it was missing it. But with kata, gemba walks and the changes from lean, it now hits the ten days over 90% of the time on orders.
Other areas of improvement were universal test stations, instead of a product having to go through several machines to be tested for mistakes and faults it goes through one. Expensive? Yes, but worth if for the time savings and the new machines took up a lot less room – the factory floor now has spare space, whereas before they were bursting.
The most obvious of improvements though come from the maintenance department. The most antagonistic department who fought and mocked lean and often refused to adhere and take part. But who had the best results. “We discovered they were already doing lean. Their policy was to fix things and make sure they would never break again. To make sure that problem would never come back.”
Sounds fairly lean to us.