Gibson Guitar plays it Lean for gains

by Deborah Nash
Montana Manufacturing Extension Center

8/29/01     

      Tuning in to Lean Manufacturing’s   "value added" philosophies has doubled the production of Gibson Guitar's Montana Division as it continues its tradition of hand-building Gibson Acoustic Guitars with the vibrant sound, high quality, and creativity that have earned it a place in the hearts and hands of America's greatest artists for over a century.

     The company, located in Bozeman, Mont., employs about 140 people and is the sole acoustic guitar division for Gibson Musical Instruments of Nashville, Tenn.

    Gibson Montana decided to play it Lean last year at the recommendation of Lori Rydberg, current Director of Operations. (Lori points out a CNC carver shaping intricate guitar necks in photo on the right).  She had attended the Montana Manufacturing Extension Center's Lean production strategy workshop and live simulation, "Play the Lean Game."  With a CPA background, she immediately recognized the cash power of one-piece flow and eliminating wastes. She convinced General Manager Eric Klotz to try implementing it, using guidance from MMEC and the University Technical Assistance Program (UTAP). These two programs offer assistance to manufacturers across the state from the Montana State University College of Engineering and other locations in Montana.

       Sixteen months into its Lean transformation, Gibson's production has nearly doubled, without a $1-2 million dollar facility expansion that had been in the works. Inventory turns have doubled, and factory order-to-delivery time has been cut in half.

            "Our facility expansion had been planned in order to exceed what was considered production capacity of 50 guitars per day.  We're now producing more than 70 per day in the current facility and working toward corporate's even higher goal of 100.  I think we'll get there," Rydberg predicts.

Refocus Perspective

    One of Gibson’s first steps was to use value stream mapping, which is a simple pencil and paper tool to chart or “map” the flow of materials and information processes to help understand how a product makes its way through production from raw materials  through the finished product.

      Gibson initially tackled Lean transformation in the back plant where raw wood is transformed into the body, neck, and fret board components. Gains there were not translating significantly to the delivery side. Undaunted, the innovative company changed its perspective, becoming customer focused. Letting customer demand dictate what adds value (a basic tenet of Lean) and working that back through production was the turning point when measurable impacts began to be realized.   

            The company asked two major questions:  “What product mix is in the highest demand?” was the first. They also  wanted to know   how they could maximize that mix – or schedule production to optimize flow through the plant?

    The value-added focus triggered more balanced process flows and expedited manufacture and delivery in what are still very manual production methods for sanding, edge banding, bridgework, and inlays. Production scheduling was re-geared to the largest constraint, the paint booth.

    Custom design is what Gibson sells, so the value-added focus made sense but created some challenges.

    With five basic guitar body styles, 30 models and then combinations of color and accents, it will take time to get 100 part numbers all into one-piece flow or get that number down, Rydberg said. Lean trainers say one-piece flow is the holy grail in Lean Manufacturing. It eliminates or reduces batch sizes to an ideal of one moving through each work station, pulled through the plant in response to a customer order rather than by forecast.

    "We've already made a lot of progress, and we've only scratched the surface without any real process changes or reaching true single piece, continuous flow, just by eliminating high-end wastes.  We still have a long way to go to reach one-piece flow.  As a matter of fact, John Shook, another Lean specialist and co-author of ‘Learning to See’ and a large contributor to ‘Creating Continuous Flow,’ visited the plant in July to help us take the next step to do just that."

            Initially, working with three UTAP engineers  -- Scott Hertoghe, Chad Gilliland and Travis Baar -- under the supervision of MMEC Field Engineer Mark Shyne, the company became educated about Lean manufacturing and how to apply it inside the plant. The engineers attended management meetings and helped Gibson examine the issues. They asked important questions. Now Lean is helping Gibson ask the right questions as they work toward one-piece flow, a production ideal in lean manufacturing.

            Play the Lean Game training was provided for all key production staff. "The course was essential. It is excellent hands-on training and provides the understanding of where we are trying to go with all of these changes," Rydberg says.

            Another Lean tool, value stream mapping, helped to visualize non-value-added activities like overproduction, excess motion, defects, excess inventory, underutilized people, etc., and to evaluate changes. A thinking/planning tool, it will help continue to move the lean transformation forward.

            "Value stream mapping is the best," Rydberg said. "Bob Cass (of Gibson)  is now our value stream manager for continuing Lean transformation. He really understands the mapping process and the business. It takes vision. He has that."

            Klotz calls Rydberg the company Lean Champion. She calls herself cheerleader and credits the production managers and supervisors, most notably Tod Christensen, for actually getting the job done. Christensen was recently promoted to Plant Manager, largely for his hard work on the Lean program.

            "The enthusiasm and dedication of the production team in handling the difficulty of ramping up production so dramatically while implementing significant changes in flow related to Lean must be mentioned," Rydberg said.

Bumps in the Road

        "We set aggressive goals and sometimes met resistance on the floor related to not wanting to let go of the way things were done,” Rydberg said. “If you have ownership of a process, you also have control and can recommend changes that work."

            "With anything this big, you make mistakes along the way. For our operation, there were so many areas where Lean could be implemented, we got bogged down," she admitted.

            That didn't stop the commitment to Lean.  Instead, management learned about key constraints and then focused on one key constraint at a time, elevating it (since desired output was known) and taking steps both up and downstream to overcome it using Lean Manufacturing tools.

            Ramping up also created a few problems with external vendors who had not ramped up as fast. Improved projections of demand to those suppliers helped resolve it.

            Today, the Lean journey continues for Gibson, striving to reach or exceed 100 units per day and ultimately on to one-piece flow.  Essential to the journey have been upper management buy-in, a willingness to risk mistakes, and not letting constraints stop you, Rydberg said. She compares Lean implementation to life.

        "You don't always have everything you know you need, as an ideal, to move ahead, but we're always moving ahead. Maybe a jig here and a jog there, but always ahead."

        For more about Gibson MasterBuilt Acoustic guitars see Web site http://montana.gibson.com

 Sidebar

                                                            Lean benefits

            Some of Gibson Guitar’s  key benefits of implementing Lean Manufacturing procedures have been:

Process flow time cut from 6-8 weeks to just 15 days (approximately eight days of required rest times, leaving yet more improvement potential in lead times.)

Unit production time cut from 15 hours to 11.5.

Production increased from 35 units per day to 70-plus with minimal increases in the labor pool.

$500,000 freed up by doubling inventory turns.

Achieved a much smoother, balanced flow, especially in neck work where the most intricate, complicated steps in the back plant take place.

 Added a professional look in the administrative offices and break area, plus a general plant clean up to improve image for staff and visitors.

Cut materials handling time and effort by adopting point of use storage (POUS) and some "supermarket" storage where variation is too great for POUS.  This also freed up floor space previously used for raw materials.

Scrap costs cut by at least half.

A quarterly bonus plan for employees put in place tied to Lean objectives.

Send questions or comments to Carol Schmidt: cschmidt@montana.edu. Or you can send letters to Carol Schmidt, MSU Communications Services, 416 Culbertson Hall, Bozeman, MT 59717.

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