How Lean Manufacturing Helps Us Serve Customers Better

Managing Production and Inventory in Context of Lean
by Montie Roland

Audio File:    2016 Mar – Managing Production and Inventory in Context of Lean.mp3

Good morning.  My name is Montie Roland with Montie Gear in Apex, North Carolina.  And I’d like to spend a few minutes talking about managing your production and inventory in the context of Lean.

So with Lean, you have a thing called a Kanban, and the ideas that you have established a level of inventory that you need to maintain in order to meet your customer needs and your anticipated customer needs.  So, when we think about it, we’ve got two types of parts and assemblies.  One is parts and assemblies that we’re going to use to make finished goods, and the others, of course, finished goods that we’re making in anticipation of sales.

There’s a lot of different sizes of companies out there and a lot of different types of products.  And some products are built to inventory and some products are built to order.  And so if we just look at Montie Gear, in the past I’m realizing we had this kind of crazy system that didn’t really serve us well financially.  And so in the past what we do is that we would build a batch of products and in this, the reason why we build a batch is mainly because of we’ve got several processes where we need to have a minimum order.  And there’s just no getting around that without having ridiculous costs.  So let’s say that with slingshots, the two places where we have to have minimum orders – one is to cut the slingshot and then where we do our secondary machining ops.  You do the set up – that’s a lot of the work – and so you really want to have a minimum batch size through the secondary machining.  And then the other one is paint or finishing if it’s to anodize (it’s called finishing).  So, finishing also has a minimum order and can get very expensive if you don’t do a minimum number of parts.  So in this case, we’re not going to have a single piece flow through these external processes.  But we can have single piece flow through our assembly area (maybe).  Alright, so in the past what we did, somebody (usually me) would sit down and say, okay, we need to build this, this and this.  I guess we’re getting low on this. And I don’t know, we’ll sell these.  Well, there was a huge lack of scientific method here.  And what that tends to do is that tends to eat up capital because if you’re building parts that you’re not going to use for the next year, that’s money that’s tied up; it’s really not doing you any good.  And it’s not doing your customers any good either because its money you can’t spend on products that they really want.  So the next step for us, I believe, is to create a chart or a spreadsheet that shows each product; what we sold last year, what we sold this year, and the year before.  And that way we’ve got three years’ worth of sales.  And then we can say, okay, well based on this historical data, we expect we’ll sell this many of this product this year.  Then what I need to do is to take and apply a time to manufacture that good through all the processes.  And the external processes occupy ninety percent (or higher) of our manufacturing calendar days for Montie Gear.  So, paint, water jetting, machining; what have you.  And so if I apply a calendar date or calendar time to each one of these products . . . so, for example, with a slingshot.  Maybe generally the queue at ADR for the water jet cutting is two weeks.  And let’s say the queue for paint is generally two weeks, and the queue for machining is generally a week.  So, I’ve got a five week delay from the time I order to the time I get parts that are ready for us to assemble.  In this case, we’re cutting the frames, we’re painting the frames and the side plates, and then we’re machining the secondary operations in the frames.  And so I’ve got a five week delay.  So then if I know that I’m going to sell -amount of slingshots this year, then I can take and multiply that sales number by five-over-fifty-two.  Now, I take the yearly sales, multiply by five weeks, divide by fifty-two weeks to prorate it for five out of fifty-two weeks.   And that tells me how many slingshots I should sell during the period while I’m waiting on more slingshots.  So, I establish a number that I know I expect to sell while I’m making more.  And then also, I need to factor in any seasonal demands.  So, you know, look at, for example, Christmas.  So we sell more slingshots at Christmas than any other time just before.  So I need to also factor in the seasonal affect.  So, the yearly sales and then bump it up by the percentage that is increased for Christmas sales.  Now, I know what I need to keep on hand.  But I also need to apply safety stock, because there’s always going to be some variation.  So, I don’t know, let’s say our safety stock – we’ve got to come up with a metric for that – but maybe the safety stock is one month’s sales.  So now what I’ve got is I’ve got my yearly sales, prorated for the amount of time it takes to make those pieces, and then times the yearly sales.  I’ve got how many I need during the period when I’m making parts; what my safety stock is; and then any adjustments for seasonal variation.  And that gives me a much better idea of how many I need to keep on hand.

Now, I’ve also got to factor in the effect of minimum orders on this, because I want to keep my production economical by ordering above the minimum order.  But that gives me an idea of how many of each product I should stock.  And that way I don’t have inventory sitting on the shelves that I’m just not going to sell.  Now, this can get a little . . . you know, this is not a perfect system but this is an excellent baseline.  And it works well for products – or I think it will work well for products like the slingshot, where we have continuous sales of those.   We have other products that the sales are not as continuous and they have larger variations and swings.  Like, for example, our RFID products.  Because they’re commercial orders we may get an order for two hundred or two hundred and fifty or twelve hundred.  But with those, and those big orders, the lead time is figured in  and anticipated by the customer.  So, that’s a little different situation to calculate.  Now, however, on those, I think it is important to note that the longer it takes to produce your product, the longer you have to wait for the effects of the profit from that sale because obviously, you know, percentage of the sales . . . for a domestic sale, where there’s terms, you don’t get paid until you ship; if an international sale, you may get paid a deposit upfront and then paid when you ship.  But so, the longer you wait to ship, the longer you wait to get paid and the longer you wait for the benefits of the profit from that sale.  So that’s definitely an important consideration but for the purposes of looking at it from Kanban, it’s a little different.

So back to our slingshots and other things where there’s consistent sales.  So now what we’ve got is we’ve got product, and then what I’m planning on doing is to then do an inventory once a month.  And then on that inventory we’ll post in the bin where we keep each product (we have a bin for each product in our inventory . . . or for each product SKU; so there’s a bin with slingshots, there’s a bin with glove shots, arrow rests.  And so some of our bigger sellers like slingshots, there’s actually multiple bins depending on what color your slingshot actually is.)  So then what I can do is to do an inventory once a month; compare that to our minimum stocking level that we created, which was, you know, our time to produce and you know, relating that to time to produce versus sales, so we know how many is in there; plus, our seasonal variation during the period where we’re going to be making new parts; plus, our safety stock.  So we watch that and then flag it during our inventory and pull a card out that says we need to make more of these.  So that way then we collect those cards and then those cards then become an indicator that it’s time to produce more.  And that’s a nice, easy solution.  And I think, too, that when we’ll have to post what that minimum stocking level is so that when someone is withdrawing products for shipment, then they can watch that as well.  So, for especially where there’s, you know, low numbers, like, for someone where the bin’s starting to look empty, they can check.  So maybe it’s between inventories; they check and go, Hey, Montie, here’s the card for this; we’re starting to get low.

So, I think that’s one of the concepts is that you’ve got this visual indicator where this product, this produce and this product are getting low and then we can leave those cards in the bins and walk by to see them, or we can collect those cards and know that we’ve got to produce some inventory – or at least check to see what the inventory is to decide when we’re going to.  And the same thing for goods that we use on a regular basis to produce those products.  Now, that depends, too, on how long it takes to get those.  So, for example, for slingshots, the lead time on these services we purchased or the parts we purchase, it’s fairly long in some cases.  For other pieces like screws, it’s fairly short.  So it may be that we order screws, you know, about the same time we send out slingshots for paint, because we can get screws in just a few days easily without expediting anything.

So this is kind of the thought process I’m having to go through to decide, you know, how we’re going to make all this work.  And also it’s good, though, because now, all of sudden, I’ve got a framework, so I can use that framework to make buying decisions, and keeping those simple.  So, now we have a simple process for deciding, you know, how many of something we should keep.  It’s no longer a “gut-feel” thing or something where we have to wing it.  Instead, we’ve actually applied a metric to that.  And I think that’s part of the value of Lean is that now, all of a sudden, we’re using a simple tool, getting organized and, in this case, making sure that we have the inventory so we can get it to the customer quickly.  But, also, at the same time, conserving our resources so we’re not stocking too much inventory.  And having a simple system means a couple of things.  One thing is that it’s something that can be taught, not something that’s a gut-feel or something somebody high up has to make a decision.  Instead, by using a simple process we can give someone the authority to make a purchasing decision without having to go through some sort of process or get as much approval.  And I think that’s one of the values of Lean is now, all of a sudden, you can scale a lot easier; as the company grows, you have a simple process and your associates or employees, contributors, what have you – can learn that simple process.  You can audit that process because it’s simple; it’s not a gut-feel thing or it’s not some guy in the corner that guesses what the seasonal demand will be.  Instead you’re actually using simple math to solve what used to be a complex problem.  And I think that’s great.

So this is kind of how I’m looking at developing our inventory control to function in more of a Lean way.  It’s kind of cool.  I’m excited because it’s a simple solution to something I thought would be a . . . before I thought, Hey, this is going to be a complex, computerized, we-need-to-have-some-sort-of-software-to-manage-this; but, no, I mean, we can do it with a card stuck in the back of a bin that gets collected when inventory reaches a certain level.  And that’s kind of a wonderful thing to keep it simple.

Well, comments and suggestions and questions and thoughts are always welcome – Montie (M-O-N-T-I-E) at Montie (M-O-N-T-I-E) dot com.  If you get a chance, visit our Montie Gear site.  We make some kick-butt slingshots and some other cool products.  And Montie Roland, signing off.  Have a great day.

Customer Feedback – Up-Close and Personal

Product reviews (especially online) are increasingly important in helping customers make purchasing decisions. A study by CompUSA and iPerections discovered 63% of consumers indicate they are more likely to purchase from a site if it has product ratings and reviews. According to a Forrester study, 71% of online shoppers read reviews, making it the most widely read consumer-generated content.

The beauty of the internet is that even small companies can integrate online reviews into their website. Companies such as RatePoint (www.ratepoint.com) provided neutral, third party management of online reviews. They also provide tools (called Widgets) that simplify the integration of the collection and display of customer reviews into the seller’s website. We use RatePoint as a way to give our clients an outlet to rate the services and products from Montie Design.

Customer reviews are a great way to encourage sales, especially of a new product. However, you have to have sales to have customers who can write the reviews. Strategic users are the early adopters (often cultivated by the product manufacturer) who test the product and write a review. These reviews help drive customer sales and they also help encourage resellers and distributors to carry the product.

Strategic users can include writers and product evaluators for magazines and blogs. Thought leaders in the industry are also candidates for strategic users. Anyone who is in a position to influence the opinion of the marketspace is a possible strategic user. Carefully selecting the strategic users and getting product in their hands is an effective to way to begin to shaping the opinion of the marketspace as early as possible. The reviews generated by the strategic users should be a planned part of your public relations strategy. Excerpts from the reviews can also be used in your advertising campaign. The links from published reviews also help drive traffic to your website. A potentially bigger benefit occurs as the links drive up the PageRank of your website and help potential customers find the product through search engine results.

Earlier this year we launched a product called the X-Rest. Part of our launch strategy for the X-Rest shooting rest involved identifying strategic users to evaluate the product and help form a positive opinion of the X-Rest within the shooting community.

Here are some rules for soliciting reviews from strategic users:

* don’t interfere with the review process, it has to be honest and genuine
* stay open to criticism, not all reviews are 100% positive, bad reviews can lead to great product improvements
* look for new ways that users interpret how they should use the product and find new markets
* have faith in your customers, they have a perspective that can help you create even better products

The following is an example of a review from one of our strategic users:

FIELD-TESTING THE X-REST
By: Peter J. Kolovos

INTRODUCTION & BACKGROUND:
Peter J. Kolovos, was a Deputy Sheriff with the Cook County Sheriff’s Department in Illinois, before retiring.  He has been involved in the shooting sports for well over 40 years.  He is currently the Secretary-Treasurer and Director of Training for the North Suburban Police Pistol League, Inc.  With over 200 members, the NSPPL, is probably one the largest police shooting clubs in the country.

His credentials are many but my most noteworthy are the following: Pete is a highly competitive rifle and pistol shooter.  He is Certified as a Rifle Coach (Level-2) and a Pistol Coach (Level-3) with the National Rifle Association.  He is a NRA Training Counselor and Certified Instructor in several shooting disciplines.  Pete has been certified as a Police Firearms & Sub-Machinegun Instructor with the State of Illinois.  He attended the FBI’s Sniper/Observer School in 1994, and shot a perfect score during the final qualification course.  He has hunted extensively in 15 states including Alaska, and has hunted in Canada.

FIRST IMPRESSIONS:
The first thing I noticed when I received my sample of the X-Rest, was how compact and light weight the unit was.  Made of Aluminum, it came nicely tucked into a 14.5” x 4.5” digital Camo carrying bag with a draw string closure.  The disassembled unit was approximately one-inch thick.

Each of the unit’s three legs measured out at  9” x 1.5”.  The legs join together through a rectangular slot in two of the sections and are held in place by the third leg which has a half-round section with a hole in it, and a pin which is attached to the main section via a split ring affixed to a short length of plastic coated wire cable.  This system virtually guarantees that you’ll never lose the joining pin even in rough conditions.  I also liked the fact that it was made in the USA.

Once the three sections are assembled, the rest seemed extremely steady.  The cross sections, where you’d lay your rifle measured out at approximately six-inches high, making it best suited for either Bench or Prone work.  Both of the cross-sections that actually formed the cradle seemed to have an ample amount of a protective rubber coating applied them to keep the rifle steady and to aid in protecting the rifle stock from being damaged during recoil.

INITIAL RANGE SESSION:
On Sunday, May 31, 2009, I took the “X-Rest” to the Racine County Line Rifle Club which is located in Racine, Wisconsin.  My club was holding it’s monthly F-Class rifle match, so I would be able to better evaluate the rest at distance from the Prone position.  The weather was overcast as we had a lot of precipitation during the last week.  The ground was still somewhat soft from all the rain we had, so these conditions would prove interesting for the “X-Rest”.

RANGE SESSION EVALUATION:
Being that I would personally use a this rest for Predator hunting, I chose a Remington Model 700 Varmint, bolt-action rifle chambered in .223 Remington for the evaluation.  This particular rifle was equipped with a 6.5 x 20 power Leupold target scope.

I set up the “X-Rest” at the 300 yard line, placed a small sand bag near the toe of the stock, took careful aim and fired.  Since I wanted to be totally impartial from the get-go, I decided that if I muffed a particular shot I would not consider it as part of the evaluation.  I would only consider the shots that I felt I broke cleanly.

I fired twenty (20) rounds at this distance and put all of the called shots just under a minute of angle (three-inch group at 300 yards), which is exactly what I was hoping for.  I only muffed two of the rounds.  Several other members then gave the rest a try and we also quite impressed with it’s construction and how steady the rest was.

OVERALL IMPRESSIONS:
This neat little rest is simple, well made, and quite solid when assembled.  I feel it definitely has some law enforcement and military applications, as well as the civilian market.  This is a nice item for someone who’d like to have a portable rest available but not necessarily have a Bi-pod constantly attached to their rifles.  This would be a most excellent tool for a Rancher, or a Predator hunter.  It is also a very nice item for the casual shooter who’d like to have a solid rest to sight in their rifles but don’t necessarily want to pay several hundred dollars to do so.

If I were a school teacher I’d give the X-Rest a solid “B+” for it’s innovation, light weight, ease transport and of assembly.  My only recommendation would be to dip the lower part of the legs in some type of non-slip coating to resist scratching a vehicle’s paint-job if it were placed on top of the roof or hood.

Submitted by:
Peter J. Kolovos

——— End of Review ———–

Reviewers can connect with potential customers in a very intimate way through an honest evaluation of the product.  Reviews build trust in your product.  Small flaws in grammar or composition in the review help convince that the reader that the review was not a corporate fabrication from a paid talking head, but rather an honest evaluation from someone they can trust.  Less than stellar reviews are often more believable that glowing reviews.  Customers understand that no product is perfect and can be suspicious when reviews are overly flattering.

Product reviews are part of the precious dialog between you and your customers.  Embracing user reviews can give you an advantage over your competition.  Finding strategic users is the first step in encouraging the creation of third party reviews.  The next step is to get your product in their hands for them to test and evaluate.  Trust them to take it from there, using their reviews they create as a part of your website, public relations and marketing campaigns.  After all,  you worked so hard to get that product out to the market, now is the time to let the strategic users tell potential customers what a great product you’ve created.

Give me a call, or send me an email, if this was helpful or if you have topics that you would like to see in future updates.  Don’t forget to call when you are ready for us to contribute to the success of your project!

Cheers,
Montie Roland
President -Montie Design
montie@montie.com
800-722-7987

About Montie Design

Montie Design is a collaborative product design and  development firm with core competencies in industrial design,  mechanical design and fuzzy front end services. Implementing  a client-centric approach in taking products from concept to  marketplace, Montie Design balances vision with usability in  realizing products that are economical to manufacture, elegant and robust. The firm operates out of the Research Triangle  Park region of North Carolina with access to industry-leading  technology, resources and innovative thought. For more  information, visit www.montie.com.

New Portable Shooting Rest Released by Montie Design

Xrest Testing(Morrisville, N.C.) Collaborative product design and development firm Montie Design announces the availability of its unique portable shooting rest, the second original product conceived, designed, and distributed by the RTP-based company in the last nine months. Designed to meet the needs of all shooters as well as most firearms, the easy-to-carry rest weighs less than two pounds and disassembles easily in three pieces, fitting neatly into a small carrying case. Unlike conventional bench rests, which are heavy and complex, the novel Montie Design model — made of sturdy yet lightweight aluminum — provides steady support for different sized long guns ranging from semi-automatic and bolt action rifles to shotguns, carbines and pistols.

“There’s nothing like this on the market,” said Montie Roland, president of Montie Design and active shooting enthusiast. Roland, who used to shoot competitively and has a daughter on a local junior rifle team, said he got the idea for the product after tiring of carrying around a conventional combination of a heavy rest and sand bags for recreational shooting.

“I realized that a lighter weight version would serve the recreational shooter better,” he said.

Karl Frank, business development manager at Montie Design, received positive feedback on the portable shooting rest at a recent Special Operations trade show in Fayetteville, N.C. “It’s clear this product has military or police applications as a training tool for the long gunners in the squad, and for sighting in and maintenance operations,” Frank, whose background includes development of tactical equipment for military applications, said.

Roland said the idea for the product came not only from personal experience but also from what he saw as the market prospects for such a product. Nationally, approximately 200 companies are actively involved in the U.S. firearms industry, combining for an annual revenue of $2 billion. In the Triangle region of North Carolina there are more than five shooting ranges and multiple firearms retailers, not to mention major chains selling guns and ammo to hunters and competitive shooters.

The design and distribution of the shooting rest comes on the heels of Montie Design’s innovative radio frequency identification (RFID) detector card which was released in January and is now being sold throughout the U.S. and seven foreign countries.

“Sometimes there is no better way for a design firm to find the next client than to show off a simple, well-designed product to a potential client and say, ‘we did this in our spare time, imagine what we could do for your product line,’” Roland said, adding that concrete examples like the RFID detector and portable shooting rest show initiative, leadership and capability to his clients

Both the RFID detector and the shooting rest are produced in the Research Triangle Park region of North Carolina, using local manufacturers.

“The Triangle is full of not only thousands of ideas for great products, but many innovative, quality firms with talented professionals who can produce, market, and distribute those products throughout the world,” Roland said. ADR Hydrocut, a Morrisville company that waterjets the parts for the portable shooting rest was instrumental in the development of the product.

According to Frank, ADR Hydrocut provided prototypes and extremely valuable input. “Having the manufacturer literally just down the street made the development process much easier and convenient. We call this approach ‘Made Right Here,’” he said.

Future plans for the portable shooting rest include releasing drawings and design specs as open source in addition to designing an adjustable, pistol-oriented version of the product.

To learn more, or purchase the new shooting rest or RFID Detector, visit www.montie.com.


About Montie Design

Montie Design is a collaborative product design and development firm with core competencies in
industrial design, mechanical design and fuzzy front end services. Implementing a client-centric approach in taking products from
concept to marketplace, Montie Design balances vision with usability in realizing products that are economical to manufacture, elegant and
robust. The firm operates out of the Research Triangle Park region of North Carolina with access to industry-leading technology, resources
and innovative thought. For more information, visit www.montie.com.

Media Contact:

Montie Roland
montie@montie.com
800-722-7987
919-412-0559 [cell]

NC Product Design & Prototyping Co-Op Lunch and Learn #2

NC Product Design and Prototyping Co-Op Schedules Second Lunch and Learn

(Morrisville, N.C.) The NC Product Design and Prototyping Co-Op, a project of the RTP Product Development Guild, has scheduled its second lunch and learn session for Wednesday, February 18 from Noon – 1:30 p.m. at Fineline Prototyping in Raleigh.

Co-Op members specializing in areas such as software development, engineering, design and prototyping, marketing, and project management work together in a collaborative environment to focus local resources on creating products with regional, national, and international applications instead of having local companies look elsewhere for assistance.

According to Montie Roland, president of the RTP Guild and advisor to the Co-Op, momentum is building within the local product design community to pool resources in order to bring new, cutting-edge product ideas from concept to reality.

“The talent, ideas, and resources are right here in Raleigh, Durham, Morrisville, Cary, Apex – the Co-Op is the missing piece of the puzzle to bring everyone together,” he said. Eighteen industry professionals attended the first lunch-and-learn event with over two dozen expected for the FineLine event, Roland said.

According to Roland, the lunch and learn events provide a great way for Co-Op members (and potential members) to get to know each other better.  Each attendee has the opportunity to introduce himself and his company to the group, and local engineers and managers are able to meet local design and prototyping vendors, Roland said. Each lunch and learn is free to attend.

Roland said Fineline Prototyping is the perfect example of the type of company which could utilize the Co-Op to enhance its network of peer professionals. FineLine was founded with the singular mission to provide the highest quality high-resolution prototypes for customers and deliver them with worry-free service. FineLine was the first in the industry to implement high-resolution stereolithography, initially for the medical device development market.

In addition to FineLine’s core offering of high-res stereolithography, they also offer state-of-the-art selective laser sintering, and a high-strength material that they call SLArmor — a nickel-plated ceramic-filled stereolithography part that can stand in for diecast or machined aluminum in many cases.

To register to attend the event, visit the NC Product Design and Prototyping Co-Op page at www.rtpproductguild.com.

About the RTP Product Development Guild
The RTP Product Development Guild seeks to improve the regional economy in Raleigh/Durham/Chapel Hill, N.C. by providing a framework for product developers and startups to work together on products in a collaborative environment. This helps entrepreneurs move products to market that might otherwise languish due to a lack of funding and professional guidance. The Guild accepts applications for products, services or concepts from entrepreneurs, early stage start-ups and corporate spin-offs. More information is available online at www.rtpproductguild.com.

About the NC Design and Prototyping Co-Op
The NC Design and Prototyping Co-Op is a project of the RTP Product Development Guild.  The goal of the Co-Op is to provide prospective clients with the capabilities that they need to design and prototype their next product with local resources.  The Co-Op is made up of professionals who personally know each other and who are used to working together in a trusted network.  Whether you are an RTP company, or a company far from RTP, the Co-Op can provide the resources you need including mechanical engineering, electrical engineer, industrial design, software development, business development, rapid prototyping, prototype manufacturing and project management.

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Media Contact:
Montie Roland
(800) 722-7987
(919) 412-0559 [cell] montie@rtpproductguild.com

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