Visual Control of Engineering at Genie Industries
A central issue for many service processes is controlling the process. Some successful kaizen workshops have focused on creating the system of tracking and controlling the process using visual controls. Genie Industries is an example of this.
Genie makes many different kinds of lift devices, like the hoist device phone company service people use to work on telephone poles. Genie has aggressively implemented lean throughout its operations and credits lean with keeping it afloat in a down cycle in the industry in the late 1990s and then helping it grow to the number-one producer in this market segment. In this lean improvement period, Genie went from five or six inventory turns per year to 45 turns annually over a three-year period. Total cost has been going down at a rate of 5% per year.
Most of Genie’s products are highly engineered, many of them to a specific customer order, so engineering can become the bottleneck in getting customers what they want when they want it. A key part of the improvement process in engineering was simply moving the front offices to the shop floor, where engineers and manufacturing team leaders sit together. The approach was to organize around value streams, get product engineers together with manufacturing, and use simple visual systems to manage the process.
The nerve center of engineering is now a conference room with visual displays on the wall. The two core processes visually represented in the room are engineering changes to existing products (e.g., to customize a product for a particular customer) and new product development. In the past, Genie ran both of these processes through computer schedules. However, it took too long, never met the schedule, and ended up generating 14 copies of each change order that circulated to a bunch of offices. Now they manage both processes through manual visual schedules posted where the team meets weekly to review progress.
For engineering change orders they use a large magnetic board. Magnetic strips identify the number and description for each live change order and serve as the title of a row for that change order. Time is measured across the rows, so you can see when the change order was initiated, when it is due to be complete, and if it is on time or late. A maximum of seven days is allotted to do the necessary research to determine what the change will involve and commit to a completion date. Part of the magnetic board has a “countdown” folder with slots for completion due dates out 1-7 days, 8-14 days, 15-23 days, and 24-30 days and a slot for those still in research mode waiting for a commitment date. The master version of the engineering change notice is kept in the appropriate slot and moves as time passes. There is also an engineering change-notice process flowchart showing the steps and responsibilities. Through this process, the time to incorporate change orders into the product was reduced from 120 days to 30 days or less.
They also use a visual system for new product development, which is essentially a large Gantt chart on the wall with sticky notes showing tasks. When a task is complete, a big X is put over the task. Each project takes about a year, and the chart covers much of the wall. There are some spreadsheets in the computer backing it up, but no complex, Web-enabled, collaborative product development system. What is on the wall is the main tool for managing the engineering projects. Since the lean effort, engineering costs have been driven down at a rate of 10% per year.