Let’s do two things: Give credit where credit is due, and clear up the notion that lean manufacturing and automation are somehow incompatible.
The first is simple. While there is a lot to criticize about GE and its rather schizophrenic approach to manufacturing and accounting, there is a lot to admire about the way they are making aircraft engine components in Bromont Quebec.
As to the second, automation has long been a central tenet of lean. It is in the automation versus labor cost issue where conflict arises. Toyota spends a lot of time thinking about and working on jidoka – automation with a human touch. In a nutshell, it means investing in automation to enhance human capability, rather than replace it. Read this piece from the Financial Post and you get the idea.
In most companies the decision to invest in automation – or not – relies heavily (solely, if we are going to be honest about it) on the labor savings. Real thoughtful stuff like, spend $1 million on automation, eliminate three jobs at $85,000 total a year per job, result is a 3.9 year payback, since it is better than the five year corporate policy hurdle rate, go ahead and buy the machines and whack the people from the payroll.
No one should be so naïve as to think the bean counters at GE didn’t do comparable math, but the gist of the story is “While different human operators once introduced slight variations into the final product, the robotically produced items offer better process control. Not only has the rate of returned parts decreased dramatically but the reasons they’re returned are also less significant.”
While the amateurs think automation is about labor cost reduction, the pros understand that quality – and flexibility – are the keys. The payback from automation is the ability to eliminate defects and change over from one product to another on a dime. The more automation facilitates this, the greater the savings. And productivity gains result – usually in a big way – not from the fact that the automation makes more pieces per hour than the human, but from the fact that it enables the human to waste less time on defective output and on producing stuff that isn’t needed due to a big batches.
“The initial fears that workers would lose their jobs proved groundless. The Bromont plant now employs more than 750 people, more than it did when automation was introduced.”
“We offer to retrain any worker involved in a manual process to oversee the new automated process. I can’t recall a case where an operator hasn’t adapted to the new technology.” Thus said the GE Operations Director in Bromont, which is exactly the right thing to do. It puts people in charge of and in control over automation, rather than foolishly thinking they can be replaced by it.
In a related article you can see some cool pictures of some of the automation they deploy up at the GE plant in Quebec. Good stuff!