Make City Labs talk

This week I spent a few hours after work going through Lean tools for small manufacturers at the Make City incubator in Chicago.

We reviewed the basics of how to look for waste in a small manufacturing space and what useful tools are available to keep a production space in order. We spent some time walking through the Meliora Cleaning Products manufacturing space to answer questions about whether and how anyone "actually uses this stuff for real" (we do!)

If you'd like to set up a similar class or event at our location or yours, contact us!

https://www.blog.makertomanufacturer.com/p/about.html

Water Towers

Seth Godin's blog likes to hate on factories and physical spaces, but he still uses analogies from manufacturing and infrastructure. I enjoyed this one.

https://seths.blog/2019/12/water-towers/

The text:

Water towers

On the top of many apartment buildings (and on a hill in many towns) you’ll find a water tower, a large wooden or metal container holding tons of water.

Why bother?

It turns out that a pump that slowly and consistently pumps water uphill is way more efficient than the high-powered, high-capacity pump you’d need to meet spikes in demand. By using gravity to assist during times of heavy load, the consistent and more efficient pump gets the job done by planning ahead.

We all need a water tower somewhere in our work

Lean vs Waste

Lean Manufacturing, Lean Ops, Lean Whatever....many people haven't heard of it, have heard of it but don't know anything about it, have heard of it but only know a little about it...and so on.

"Reducing waste" - almost everyone understands what this means, right away, without further explanation for context about what certifications the person holds to help reduce waste or why reducing waste might be a good thing.

Why don't we speak more plainly about Lean and about what we do?

Let's reduce waste. In manufacturing, in service, in everyday lives. We can call out waste, in whatever form and location we find it, and work to reduce it.

Benchmarking a hemisphere away

I'm currently traveling in Phnom Penh, Cambodia doing multiple things, but one of them is always keeping an eye out for lateral benchmarks. 

Cambodia has a large manufacturing industry, with garment production being a large part of that. I'll be visiting several factories this week. 

Benchmarking can be done close to home or far away. I hope to have some good best practices to share from factories and operations here that can travel back with me to Chicago.

Right side Red

Sailors use red to mark the starboard side of the boat and guide into port with the red lights on that side.

"red to the right" is easy to remember and makes it simple when deciding how to mark a set of cables or other connectors. Here is a piece of equipment with two sides, that's likely going to be taken apart several times.


I've added a small piece of red marking tape to the right side, so whenever I pull the pieces apart in a hurry, I don't need to worry about remembering which side is which.

Ode to a Siphon Pump

Siphon pumps! What a wonderful tool. They:

-are inexpensive
-work without electricity
-take up very little space

They are a great way to move liquids around without needing to lift a heavy container. Here are some ways we use them:

1. transferring water between full 5-gallon buckets for cleaning up, rather than needing to lift one full bucket
2. emergency backup pump for any container size. We use lovely, convenient, electrical gas-station-style pumps for our 55-gallon containers, but the motors can wear out or the pumps can get clogged. Rather than stare at the full 55-gallon drums wishing we could get the liquid out, we've got a few extra siphon pumps around: a few-dollar insurance policy to give us a manual option until a new pump can arrive and get us back to normal.
3. Final emptying of containers that are an odd size for our standard electrical pumps.
4. Regular use for any liquid ingredients when we only need a little at a time, as an inexpensive start before getting a higher-flow rate electrical pump.

Here are some options:
5 gallon siphon pump on Amazon
55 gallon siphon pump on Amazon

Are You Messy?

Keeping things in order comes naturally to many people. For the rest of us, this is baffling. I'm naturally an extremely messy person. Here is my desk at the end of a long week of work:

But here is part of our production floor, taken at the same time. Note the production area is organized, but my desk area in the background is....not.

How do you keep your studio clean when you personally are fighting towards entropy? One way most of the studio stays clean is that I have a limited amount of space I allow myself to work. The Red Tag area, (aka my Zone of Disarray) is the formal spot that items go when they aren't needed in their particular space. My own desk is not quite so straightforward to organize since my normal rule of "will you use this item in the next month?" means I would answer YES to everything that's sitting on my desk. Keeping all these items in some kind of order is a challenge for a naturally messy person. That's one reason 5S and other Lean Manufacturing tools are all about continuous improvement, not immediate perfection.

What's your inventory style? JIT vs Doomsday Prepper

Lean Manufacturing consultants talk about "Just in Time" inventory but never define what that is. If you push for a definition they will say "all inventory is bad". I like to call this Abstinence-Only inventory education.

Doomsday Preppers have enough items on hand so they can start a new life without any input from others. This might mean food stores, or equipment to rebuild a whole society.

Which of these suits you more closely? The best answer is probably somewhere in the middle.

Short Runs and Low Inventory

Sometimes you'll notice breweries using plastic can wraps, or stickers/labels around an aluminum can. This seems silly at first - there doesn't seem to be any reasonable explanation; a can plus a sticker is surely massively more expensive than just a can.

Using a stock item (a plain can) plus a short-run custom item (stickers or shrink wrap) is a quick way to get product out and see whether investing in fully custom packaging makes sense. Custom packaging is a way to tie up tons of cash and is risky if you aren't sure a product will sell. Keep an eye out for this type of packaging: it's a pretty reliable way to tell which brands and products are new to the market.

What haven't you cleaned in a year?

When your 5S walk gets stale, this is a fun challenge: what's something in your studio you haven't cleaned in the past entire year? Clean it today.

Today, mine was the wheels of our pallet jack.

Pallet Jack Pen Pouch

Problem: getting all the way to the loading dock and neither you, nor the delivery/pickup driver, is holding a pen to sign the paperwork for the shipment you're receiving or shipping.

5-minute fix: duct tape folded into a pouch on the jack itself. Now a pen and a Sharpie both live on the pallet jack!

What annoying thing can you fix in five minutes?

Last One Tags

How do you avoid running out of items? Especially lower cost, consumable items like shipping boxes?

1. Order three year's worth of these at a time. Find a place to store them, then realize a few month's in that they aren't really the right size for what you need.
2. Track inventory meticulously. Do a physical count daily, or require employees to scan them in and out so you can view the count from your computer at any moment.
3. Create a reasonable warning system so you know before you run out with enough time to avoid disrupting regular operations.

Here's one way to implement #3: print out a bunch of labels  like the ones in the photo. We print the words "Don't Use Without Reordering - No Usar Sin Reordenar" on the label. The item to be reordered can be written down as well, so you can remove the label when you get to it and use that as your reminder to order the items.

What's #1?

The Marina Bay Sands in Singapore is a massive hotel. 43 kitchens, 450 chefs, serving tens of thousands of meals a day. Chef Christie, who oversees the food operations, has a lot of individual processes, materials, and people to consider. There are a mind-boggling number of things happening at any time, including ordering, receiving ingredents, storage, prep, and serving.

So, with all that to oversee, what is the first thing he looks for to see whether things are running smoothly? How clean the kitchens are.

"I'm looking at general cleanliness, first thing. I'm looking at the floors...if it's total chaos or if things are really under control."

A good reminder that following the Shine step in 5S is both style and substance.

The full episode can be viewed on Netflix in the Mega Food series, or on Youtube here:
https://youtu.be/Nif0uFutv_w

Go/No-Go Gauge for Cave Tours

You don't want to get halfway into a tour for a cave and then find out the passageways are too small for your comfort. This entrance (at Silver Dollar City in Branson, MO) puts a cutout of the smallest passageway right at the entrance to the line for the tour. If you, your stroller, or your family members can't make it through this cutout, the tour is not for you. 

This type of gauge is useful in both manufacturing and in real life!

Pallets 101: Pallet vs Parcel

Parcel to Pallet - should you ship boxes individually or together?

A "parcel" is a general term for an item that can be picked up by hand. This might be a box, bag, or other container. Parcels are shipped using a parcel carrier like the United States Postal Service (USPS) or the United Parcel Service (UPS). 

A "pallet", also known as a skid, is a flat item used to secure and transport larger items or multiple parcels. Pallets are shipped using a truck, also sometimes called a freight carrier. If you're shipping one or more pallets, you might use an LTL ("Less Than Truckload") service provider to pick up the items and deliver to your destination. 

If you are regularly shipping many parcels to the same location, using pallets might make more sense. 

Some great things about shipping pallets: cheaper per-unit cost than shipping multiple boxes, the individual items are handled less and stay upright, minimizing damage compared to parcel services

You might not be ready for pallets if: you don't have infrastructure to handle pallets (such as a loading dock, forklift, etc) or if your customer does not have the ability to receive pallet shipments due to size or handling contraints. 

Daily 5S Walk: Weeding the Garden

the daily 5S walk is a lot like weeding a garden.

There is no expectation that suddenly one day you'll go out and there will be nothing to do. Weeds always grow and your studio will tend towards disarray.

Keeping up with it every day is easier than letting things get out of control.

It can be a soothing moment in the day when you check in with your studio and take care of your space.

You can consider the items you find to be just like weeds. "a weed is a plant out of place" - you're looking for items that are in the wrong place.

Daily 5S Walk: Kill Your Darlings

Sorting and Setting in Order doesn't always happen easily the first time. During the daily 5S walk today I noticed that our "red and white sides of clothespins" flag system wasn't working the way I had imagined, even though I'm a [sarcasm font] complete genius and it's almost inconceivable that one of my ideas didn't immediately cause the whole production team to jump for joy.

It's okay to try something you think MIGHT work. Around here we are used to "this might work, and if not, we'll change it" as the default for making improvements. It's an everyday part of our operations and lets us try things, which sometimes work out really well!

This clothespin system wasn't useful, so rather than leaving it up and working around it, we're scrapping it. The clothespins are currently sitting in the Zone of Disarray awaiting my next genius idea for how to use them somewhere else, or perhaps another use entirely. They weren't useful on the production floor, so they had to go.

Daily 5S Walk: Set in Order: Label it!!

On your regular walk, one of the easiest things to spot is under-labeled items. Today I walked right past this set of jugs.

The one on the left was labeled properly before going out onto the studio floor. The other two were rushed into service one day and need to be labeled to match.

A few minutes later, done!

Daily 5S Walk: Sort: Look In the Corners!

Corners are infamous crud-collection areas in your studio. Here, we have 'intentional' storage of a canopy tent for outdoor events (the black bag), and then a stack of buckets right in front. These buckets haven't been touched in months. They should be moved to the red tag area (aka the Zone of Disarray)

Ohaus scale review

In our shop we recently started using an Ohaus dual-display portion scale and I'm in love!

This scale can be bought online, including at Amazon here:  https://amzn.to/2SbGxgy

Here are my favorite features, compared to the discontinued KG-20 from AWS, which we use already and which I originally intended to buy for this purpose.

1. Dual display. Two people standing on opposite sides of a table can both read the scale's output - this makes it much easier to spot-check employee's portioning without peering over their shoulder. Even better, whenever we have two employees working, they can both see the scale, putting an extra set of eyeballs on the task to make it more likely we catch simple mistakes.

2. Small and light. The footprint is smaller and the scale can be moved more easily that others.

3. Check-weight feature. This can light up and beep when you get either in range or out of range. This is really helpful when weighing many of the same items - saves worker fatigue and attention for other tasks.

The scale's capacity is slightly lower than our previous model, at 33 pounds instead of 40, but it was also about 1/3 the cost. The resolution is 0.01 lb (metric capacity: 15000g with readability 2g). this is slightly lower readability than the more expensive scale, but still suits our everyday needs within a very small (less than 1%) tolerance.







this blog post contains affiliate links. When purchasing using affiliate links, there is no additional fee, the destination website pays me a small commission on any sales, which helps keep the blog running.

Daily 5S Walk

Your daily walk should take less than 10 minutes. Walk around your studio space and check quickly for:

SORT: items that can be moved to the red tag area
SET IN ORDER: items that are out of place and can be returned to their homes
SHINE: grab a rag and wipe something down

The daily walk is part of your STANDARDIZE and SUSTAIN efforts.

Zone of Disarray, aka The Red Tag Area

In the first step of 5S - Sort - we remove items from an area when we realize they are not used there frequently. This is usually done first as a one-time effort, but it should become an ongoing activity. Unneeded items are removed to make room for useful items and to keep production areas clear of clutter.

Where do these items end up? Quality professionals like to call it a Red Tag Area and label it with red markings. I call mine the Zone of Disarray, and it's a standard size pallet off the main production floor and near my desk. Here's a photo of the Zone today:

Here are some things that are in the zone right now:
-a brochure from a supplier that I wasn't sure I wanted to read
-some soap I made as an experiment that did not turn out how I wanted
-lab coats that were hanging on our coat rack; I realized no one had worn one in months
-a mesh bag with rags in it. These were consistently the last rags used when cleaning because they weren't absorbent, were too small to be useful, etc.
-a bocce ball set (?)
-I could go on, but it's starting to get embarrassing

So, what happens to items in the zone? Whenever I have a spare moment or motivation (afternoon slump is a good time), I pick up items and decide what to do with them. They might get donated to our local crafting reuse store The Waste Shed, thrown out, recycled, or offered to friends and family. The zone gets quickly filled back up again as we keep discovering items on the production floor that don't quite belong. I also have an hour scheduled each week to dedicate to this task, to keep the zone from getting totally out of control.

Having the zone keeps the rest of the production floor clean of clutter. Instead of agonizing over what exactly should happen to an item that doesn't belong, it gets put in this purgatory-like area and awaits a time when I'm able to make a decision about what should happen to it. Production continues smoothly and isn't slowed down by me needing to decide right then and there where something belongs.

Unitaskers Hall Of Shame: Candle Wick Holders

Do you buy industry-specific items to make your products?

Let's talk candle-making. You need to hold the wick in place while the candle solidifies. You can buy wick holders to do this! They are only $0.50 each. Do you use them?



You can also use wooden clothespins. They are $0.10 each (one-fifth the cost) and can be used for lots of other things as well.



Which do you pick?

Hardware Kit for assembling a concrete mixer

This week we assembled a mixer (it's called a concrete mixer, but we'll be using it to mix other things!)

I'm in love with this hardware kit. Instead of a giant bag of nuts and bolts for you to pick through, each of the assembly steps has its own cell with the items you'll need. The cells are labeled and a thin sheet of plastic contains the cells, with a cardboard backing, It even has outlines in case you want to cut them apart!

How many times have you tried to use the wrong piece of hardware during assembly? This method helps. How many times have you ended up with not enough hardware or too much, unclear which step you did wrong or if you didn't have the right pieces to start with? This method helps.

How can you make it more clear what items get used during what step? Can you create kits like this one for your own assembly operations?

Three Things at Once?

Kanban was invented for industrial applications, but in a recent column, Oliver Burkeman describes using it for any to-do list. Check out the column here:

https://www.theguardian.com/lifeandstyle/2019/jul/05/how-to-tackle-your-to-do-lists-oliver-burkeman

Clothespin Stop and Go Signs

clothespins make a great easy-to-spot sign. Using a permanent marker, color one side red and one side green (or white and black, etc). Clip the pin on a shelf, product, other other object with the desired direction facing out. When you need to flip the sign, turn the pin over and clip in the other direction.

How Much is Left? pt 2

Clear containers are great but not everything comes packaged that way.

Here is the side of a steel oil drum - how do I know how much is left?

I use very nearly the same amount of oil for each batch of product I make. On the side of the drum, I write down a tick mark for each batch made that day. This makes it easy to quickly tally up how much total oil I've used. I can make about 38 batches from the entire drum, so when I get close to 38, I need to get ready to melt and open a new drum of oil.

This tick mark process doesn't require software or computers and if I miss writing down the amount used on a certain date, I can always check my batch records to see what was made. This method is faster than removing my oil pump to dip a long stick in to see where the oil level is.

No-drip pouring for liquids

If you're pouring liquids such as oils, this restaurant supply device might help keep things neater.

https://amzn.to/2QrpohP

You've seen it holding syrup at brunch restaurants. Can you also help keep your studio cleaner and avoid drips at spills when pouring oils and other liquids?

How Much is Left?

If you're lucky enough to get materials in a clear or semi-transparent container, here's a simple way to keep an eye on how much you're using. 

Every week (or depending on your studio, every day or every month), place a tick mark on the container showing how much is left. This barrel of oil went from being 2/3 full on April 8th to 1/3 full on May 20. 6 weeks to use one third of a barrel, so I can predict I have about 6 weeks left until I run out, around June 1. 

I'll be contacting the supplier today to let them know my expected date for restocking. I can confirm pricing and lead time for restocking this item. 

Maker to Manufacturer is now available in paperback!

The book is available on Amazon.com, and can be reached directly using this link!

https://amzn.to/2LqcBO5

Kanban Rule #6

Kanban Rule #6: The number of Kanbans is reduced carefully to lower inventories and to reveal problems.

Applying this rule in your studio: in a studio where sales levels are consistent, then reducing the number of kanbans is one way to reduce inventory levels, which improves cash flow and increases production speed. However, in a studio where sales levels are growing (and often growing quickly!), then it’s more common to add kanbans than to take them away. Reducing kanbans is recommended for when sales level off at your studio or if you’re working to reduce the total inventory you have on hand (see Chapter 12).

Kanban Rule #5

Kanban Rule #5: Defects and incorrect amounts are never sent to the next downstream process.

Applying this rule in your studio: if there is a problem, it gets stopped immediately! Never send a product with a problem further down the process where it could possibly end up in the hands of your customer. If defective products stay in the kanban, your next process won’t have the right number of correct items. Defective problems should get flagged immediately and removed from the production floor and dealt with totally separate from regular production.

Kanban Rule #4

Kanban Rule #4: A Kanban should accompany each item, every time.

Applying this rule in your studio: you shouldn’t be making product unless your system needs it, shown by having an empty kanban. The labels help make sure each product is labeled.

Kanban Rule #3

Kanban Rule #3. No items are made or moved without a Kanban.

Applying this rule in your studio: kanban is your autopilot! Use it instead of a production schedule, to tell you how much and what products to make.

Kanban Rule #2

Kanban Rule #2. Supplier (upstream) produces items in the precise amounts and sequences specified by the Kanban.

Applying this rule in your studio: make product in the same size and quantity each time. When filling a kanban, don’t overfill it or fill it partway. The number of items per kanban, and the number of kanban, is how the total amount of product is controlled.

Kanban Rule #1

Kanban Rule #1: Customer (downstream) processes withdraw items in the precise amounts specified by the Kanban.

Applying this rule in your studio: when you take a full kanban of product, you can always know that exactly how many products are included because they’re always the size/quantity indicated. If the bin or kanban is full, there is no need to count or measure how many items are included.

Toyota’s Six Rules for Effective Kanban Systems

The basic rules of using kanban are the same whether you are running a car factory or a jewelry studio. These rules were developed at Toyota but can be applied at your studio.

1.      Customer (downstream) processes withdraw items in the precise amounts specified by the Kanban.

2.     Supplier (upstream) produces items in the precise amounts and sequences specified by the Kanban.

3.     No items are made or moved without a Kanban.

4.     A Kanban should accompany each item, every time.

5.     Defects and incorrect amounts are never sent to the next downstream process.

6.     The number of Kanbans is reduced carefully to lower inventories and to reveal problems.

What Should You Make Today?

How do you decide what product to make on any given day in the studio? With limited time, making the wrong thing hurts twice. You don’t want to make product that isn’t selling, and you don’t have time to waste when you have orders to get out the door. By using this system, your to-do list is entirely out of your hands and controlled by your customer. There’s no need to calculate what needs to be made, you simply visit the area where empty kanbans are kept and see what needs replenishment. All the time spent on ‘production scheduling’ can now be used for more practical things, like production itself. Manual changes to production are reduced to non-kanban orders such as custom products and seasonal items. Using this system is also useful when employees are being onboarded, as it’s obvious what needs to be made next.

Information to include on your kanban

Since your kanban is the indication you need to make more product, you should include information on the tray to tell the team what needs to be made. The product name and quantity per kanban is typical, as is the storage location where the kanban should travel to once it has been filled, and where to return it when empty.

Card, bin, tray, hopper?

Kanban: translation is “visual card”. A written card can accompany any size item; if items are small enough to fit into a bin or tray of some kind, it’s best to place the card on the outside of this bin by labeling the bin. You can call this whatever makes sense in your own studio. At Meliora they are called “trays” because the most often used size is a re-purposed cardboard fruit tray collected from a local wholesale store.

Only the amount needed.

Kanban is meant to help deliver items only when they are being sold or used by the next customer, so that there is no excessive pileup of inventory or finished products on the floor or in the warehouse. Using kanban is a way to regulate product flow through the factory. Think of it as a system of pipes that you control so you can increase or reduce how much material heads to a certain place.

Kanbans: backup batteries for production

When you are worried about running out of battery life on your phone, on a cordless drill, or anything else, you keep a backup battery handy. When your drill runs out of power, you grab the backup battery and plug in the dead battery. This way, you keep moving on your project while the extra battery recharges. Having multiple kanbans means you never run out of product at the wrong time. When you reach the bottom of a kanban, you start working on the next one while the empty kanban is refilled.

Practical Pull System: adjustable kanban

A Kanban system keeps a very small amount of inventory on hand, so as soon as a customer places an order, they receive an item from the inventory. Then the factory builds more of that item, builds work in process needed for the item, and reorders any raw materials needed, working all the way backwards through the system to ensure the entire system will be ready to go for the next customer order. The exact amount of product moved depends on the batch sizes and the customer demand. This system can change over time as the business adjusts batch sizes and has changes in sales volume.

Kanban makes your pull system happen

The pull system is the strategy behind how you make products, and kanban is the day-t0-day tactics for executing the strategy. In a pull system, everything starts with a customer order. Using kanban helps to control the flow of production so that product can quickly be moved to fill orders, then the Work-In-Process and inventory levels can be restocked back to the appropriate levels. A working Kanban system works to strike the balance between two extreme versions of a pull system.

Two Extreme Pull Systems

A Pull system describes how product moves in your studio, but not necessary how much to have at each step. Here are a few examples of the extremes: 

Extreme Pull System: Grow-To-Order

In a totally made-to-order setup, you wouldn’t stock any finished product or order any raw materials before receiving a customer order. If you are a brewery, you’d wait until someone came in to order a beer before heading in the back to start brewing. Then you’d start growing the hops and grain for the beer, so your customer sits at the bar for a few months before they can enjoy a drink.

Extreme Pull System: Super-Stocked Warehouse

In this opposite example, your orders are ready to ship in a heartbeat. You’ve pre-packed every possible combination of different products and have them sitting in inventory. When a customer buys a red size medium shirt and a black handbag, you’re ready to go and find the box with that combination of products in it from your warehouse, which is millions of square feet to hold every possible product combination.

What is kanban?

Like many manufacturing terms, the work “kanban” comes from Japanese production systems. The direct translation of kanban is a billboard or a sign. Using kanban means that you will use some type of physical sign to tell the production team what to make. This can be done with by moving a written card, writing on a whiteboard, or physically moving an empty cart or bin in the studio.

Order Fulfillment: Benefits of Using Distributors

Distributors provide services such as warehousing and shipping product to stores. They are convenient for stores, since the buyer can purchase stock from a single catalog rather than individual manufacturers. Many stores prefer this convenience, so using a distributor increases the number of stores that are willing to carry your product. They also provide support such as product information, sales support, and demo/sampling services. Using these services can be a simple way to expand the capabilities of the sales function at your company without adding more people to your company.

Order Fulfillment: Costs of using Distributors

Distributors require an existing customer demand for your product. The distributor will charge various fees, either directly or as a percentage of sales cost, for the services they provide such as warehousing and shipping. Sales support is typically not included in the percentage fees taken by distributors, so a brand must provide its own sales staff or pay the distributor for this additional service. Distributors in different industries will work differently and have different requirements and costs, so the best way to learn more is to try to contact the distributors used in your industry.

Order Fulfillment: Distributors are Logistics Partners

Distributors warehouse products and ship them to stores. When you sell product to a retail store that in turn sells to customers, you can either manage each store’s inventory and fill orders yourself or use a distributor. A distributor is essentially an outside fulfillment company that specializes in sending products to businesses for resale. If you aren’t sure what distributors would potentially carry your products, ask the buyer at a retail store where your products are sold or where you want your products to be sold. The buyer will know the commonly used distributors in your industry.

Order Fulfillment: Using Third Party Fulfillers

There are many services available to store your products and fill customer orders on your behalf. Rather than hiring someone to come to your studio and fill orders, you hire the fulfillment service to accept large shipments of your product and pick, pack, ship, and send notifications to your customers from a separate warehouse location. There are a growing number of ecommerce fulfillment companies offering such services. Because fulfillment companies hire dedicated workers to pick and pack orders and receive volume discounts on shipping costs, they can potentially fulfill orders more efficiently than each individual business can. However, after considering the markup of these costs, the final cost to you is often the same or more than fulfilling directly. Some popular fulfillment services in the USA are ShipBob, FedEx Fulfillment, Amazon, and WhiteBox.

Fulfillment service costs

The direct monetary cost of using a fulfillment service includes setup fees, storage fees, per-order costs, inventory receiving fees, and more. There is also the cost of losing an opportunity for you to interact with your customers through the ‘unboxing’ experience. Because of the time needed to send product to the fulfillment service, you would need to keep more inventory on hand at the fulfillment center than you would when filling orders directly from your studio.

Fulfillment service benefits include the removal of a large space-consuming and time-consuming activity from your operations so you can focus on other items. If you are low on space at your studio, you can send product as it’s produced and use all the available space for production activities. If you don’t yet have a production facility, you can rent temporary space (at a shared commercial kitchen perhaps) and produce enough inventory to send to the fulfillment center, then manage your business from home. This would allow you to scale up without any dedicated studio space at all.

Pick and Pack: Ship The Order

The outside of the package should contain enough information to get the order to the right place and avoid confusion with other orders. For shipping using a common carrier such as UPS, USPS, FedEx, or DHL, the shipping label will contain this information. If using a trucking company, delivering yourself, or having customers pick up, then include at a minimum the customer name and order number.

Pick and Pack: Pack Second

To Pack, take a completed picked order and check it against the packing slip. Ideally, one person picks the order and a second person checks it while packing. You can also pick orders in the morning and pack in the afternoon, checking them yourself. Seeing each order twice gives you a chance to catch any mistakes in product quantity or type. When checking and packing, place your initials on the “packed by” location on the packing slip.

Pick and Pack: Flag Orders That Aren't Ready

Use a visual flag/alert system to identify any orders that are not ready to ship. The orders might have special requirements like samples to be added, a personal note to write, or product that needs to be made before the order ships. The needs-attention flag should be something simple yet visually out of place, such as a brightly colored gift-wrapping bow, a mini traffic cone, or a yellow rubber ducky. By easily identifying any order that needs special attention, you can focus on moving out all the other orders without worrying that you will accidentally pack an order before it is complete.

Pick and Pack: Separate Orders Visually

The picked order is laid out on a table, in a box, on a tray or other contained area along with the packing slip. Using a physical space like a piece of paper or the sides of a tray helps to visually separate orders from one another.

Pick and Pack: Pick First

Separating out the two steps of Picking and Packing helps to double-check the order and make sure it is correct. Using the packing slip as a checklist, the order is collected from storage/warehousing. The person that picks the order should initial the “picked by” line on the packing slip.

Pick and Pack: Packing Slips

Packing slips are printed copies of the customer order that are packed with the items. Having a packing slip tells you what to pick and allows you to double check the order while packing. The packing slip also tells the customer what is inside the package. Creating a packing slip can be done manually or using a template from your fulfillment software. You can also use a printed copy of a customer order as a packing slip. If you print out a packing slip for each order placed, you can use the pile of packing slips as your to-do list while filling orders. This will help make sure every order gets filled.

Here’s the information often included on the packing slip:

·         Customer identification (name, address)

·         Order identification (such as order number, date, or purchase order number)

·         Products ordered

·         Quantity ordered

·         Store contact information (name, phone/email, address)

·         Shipping information (service)

Order Fulfillment: What is Pick and Pack?

Picking and Packing is the process of gathering finished products into one place in order to fill a customer order. The completed order will be shipped to, or picked up by, the customer. This consists of two separate activities, picking/gathering the items needed, and then packing them to get them ready for shipping or pickup.

Order Fulfillment: Set Aside Space for Fulfilling Orders

Use a dedicated space for filling orders. This can be a 100% dedicated table or one that gets cleared off when it’s time to fill orders. For a multiple-use location, you can use the activity-kit system described in Chapter 5 to keep your filling and packing materials ready to go. Anything you run to grab while packing orders should be added to this kit/station. To start, here are some things to have ready when filling orders:

·         Computer and printer for printing packing slips, invoices, and shipping labels

·         Trays for holding items in groups while picking orders

·         Packing filler material such as paper or peanuts

·         Tape

·         Scissors

·         Boxes for shipping

·         Pens and markers

·         Thank you notes, samples, or other ‘extras’ like stickers telling customers you reuse packing materials.

Order Fulfillment: Set Aside Time To Fulfill Orders

Fill orders at the same time each day or week. This helps you track how much time you’re spending on order fulfillment. Since specialized knowledge of making your products isn’t needed to fill orders, it’s one of the first tasks that product makers tend to hire help to complete. By knowing the time being spent on fulfillment, you can more easily estimate how many hours to hire help for, or in determining whether to use an external fulfillment service. If you are following a daily production schedule, then you should start with the ‘pull’ of customer orders in the morning, allowing the rest of production tasks to follow the rest of the day.

Order Fulfillment: Keep a Single List of Open Orders

Compile all open orders into a trackable list so you can make sure everything has been accounted for. Some online fulfillment software systems (such as Shippo or Shipstation) will automatically compile different orders into a single list that you can also add to manually as needed. You can also use a whiteboard to track orders or print out individual orders and use the stack of paper as your working list of open orders.

Order Fulfillment: Track all of your sales channels

Each different way that customers can order your products is a sales channel. Your own ecommerce site is one sales channel. Third party listing sites, such as Etsy, Ebay, Facebook, and Amazon are sales channels. Direct emails or phone calls from wholesale customers to place orders is a sales channel. Make a list of all these ways you allow people to place an order. Do you have a central place to keep all your open orders so you can track and fulfill them in a reasonable time frame?

Order Fulfillment: Selling products in person

The simplest way to fill an order is directly between you and your customer. You set up a table or display, and a customer pays in cash or via check or credit card. Temporary selling events include farmer’s markets, craft shows, art fairs and festivals. You may also operate your own semi-permanent or permanent retail location at your studio, a storefront, popup shop, or mall kiosk. Filling the order happens as the sale is made, so you don’t need to track the open order or ship it.

For orders that are not made in person, you’ll need to track the open orders, pick and pack them, and ship/deliver them to the customer.

Order Fulfillment: Orders Come First

Filling customer orders is the most important activity in your studio. Filling orders comes first in a pull system because every other activity at the studio is done to support filling orders.  Production activities, storage and ordering of raw materials is all done to respond to customer orders.

Pulling: Let Your Sales Make Your Decisions For You

Autopilot is a crucial part of flying a plane. It is used to save attention and energy for the part of the flight where the pilot’s skill and decisions are needed. Wasting that energy during the easily auto-piloted segment of the flight means you have a tired pilot that needs to work the entire time, making decisions.

Think of using a studio pull system like autopilot: you want to have the autopilot on as much as possible, so you can save your attention for items that require it. For parts of your production that are easy to put on autopilot, why use your valuable time and skills to manage them? Default to using a pull system when you can; use push when you must. Here are some examples of situations where each type of system makes sense.

An Order Pulls the Product Flow Through Your Studio

A customer orders; they are sent product as soon as possible, usually from stocked inventory (your Finished Products Store) or items that are quickly custom-built from waiting work-in-process. The customer is happy. The factory now has work to do to move the rest of the product forward to be ready for the next order. Additional finished product is made to replenish the store shelves. Any additional work-in-process is made to replenish the work-in-process store. Orders are placed to replenish the raw material store.

Stores Hold Items At Your Studio

Anywhere inventory is stored in your studio, it can be referred to as a ‘store’. When filling an order, you get finished products from your finished products store. When doing production, you get your ingredients from your raw materials store. Each of the various storage areas is run in a similar way to a grocery store, being replenished according to demand.

Pulling vs Pushing Product through the studio

Pulling Product

Starting with a customer order is like pulling on the noodle. We start with the sales order, and then move along the rest of our process to follow the order and keep the noodle straight. Starting with the sales order allows all the activities in the studio to be based on actual demand, not forecasts. It lets you make product only if there is a need for it, so less time and materials are wasted. Pulling materials through your production system keeps everything neat and efficient.

Pushing Product

If you instead run your system according to forecasts, pushing on the noodle, you keep piling in raw material and storing it, making product without waiting for actual demand, and storing it even if no one is buying it. You run out of some products because they are more popular than you expected and you haven’t put time to make them in your schedule. You keep making product because of the forecasted schedule, and not because of what your customers are actually buying. Pushing on your production system should be avoided whenever possible.

Pulling The Noodle

Spaghetti noodles are like production systems: they seem pretty simple until you try to move one where you want it to go. Try pushing on one end of a cooked noodle on a countertop. It bunches up into a tangled mess. Now try gently pulling on the end of the noodle. It follows your hand in a neat line. Rugs, beach towels, toy trains, noodles: all are physical examples that remind us that pulling on something is the best way to keep it orderly while moving. 

Pull Systems at the Grocery Store

Your local grocery store carries shelves full of items so they are ready to be purchased as soon as you walk in the door. Shelves are restocked according to what gets sold, with the goal of always keeping a few items on the shelf. If there is too much inventory, the store needs a huge space and risks products expiring before they sell. Too little inventory, and the items will sell out leaving an empty store where no one wants to shop. By stocking a small inventory and replacing items according to sales, the store stays in business. Your studio should take the same approach to stocking and restocking inventory for sale.

The Real Metric from The Goal: Make Money

The three important metrics of the book The Goal combine to help the factory make money.

INCREASING throughput means that more product is sold from the factory.
DECREASING inventory means less money is invested in purchasing things to turn into throughput.
DECREASING operational expense means less money is needed to turn things into throughput.

Do you track any of these three metrics at your studio?

Metrics from The Goal: Operational Expense

The final of three metrics used in the book The Goal is Operational Expense.

Operational Expense is defined as "all the money the system spends in order to turn inventory into throughput".

In other words, what does it cost to take materials and sell them? Equipment, maintenance, consumables like safety gloves, and all of the labor costs are part of this.

Reducing Operational Expense helps to spend less money while making product to sell.

Metrics from The Goal: Inventory

The second important factory metric from the book The Goal is Inventory.

Inventory is defined as "all the money the system has invested in purchasing things which it intends to sell".

The book demonstrates that the best approach is to reduce inventory. Inventory is product sitting somewhere in the factory: it can go obsolete, become damaged, or simply tie up cash that could be better used somewhere else.

Metrics from The Goal: Throughput

In the manufacturing-production novel The Goal, our production manager eventually understands that there are three key metrics that show the health of his factory. The first is Throughput.

Throughput is defined as "the rate at which the system generates money through sales". A higher number is better and represents more money made for the factory.

Important: this is NOT simply how much product is made. It has to be sold in order to count as throughput. This means you don't get to cheat by over-producing product that sits on the shelf. It doesn't matter how many products you make that don't sell.

The best way to increase your throughput is to make products to match all of the potential sales. However, this will have an impact on the other two metrics, which are Inventory and Operational Expense. 

  

Book Club - The Goal

If you enjoyed the book The Bottleneck Rules, a longer version, in novel form, is The Goal by Eli Goldratt.

It's a manufacturing classic. The book follows the manager of a production plant with problems completing orders on time. By walking you through some counter-intuitive examples, you can see how a better manufacturing facility would work. One example? Not everyone in the factory should be busy every second of every day.

The book eventually reaches a point where it recommends three key metrics for a manufacturing plant: Throughput, operational expense, and inventory. These are the main items to keep an eye on to see if your factory is running well.

Lumi Packaging

Lumi packaging is an interesting potential source for branded packaging for ecommerce businesses. They seem to be a one-stop-shop for getting your logo splashed all over every box and envelope you ship to a customer.

https://www.lumi.com/

Lumi declares that their process works best for companies shipping 1000+ orders per month. Even if you're below that amount, you may get some ideas for adding branding to your shipping packaging.

Movie Club - STINK

Yesterday I finally watched the documentary STINK, about the hidden ingredients in products like children's pajamas, perfumes, and more.

The message of the documentary is that brands are keeping secrets about ingredients from their customers. The people in the film call customer service, communicate with overseas factories, and show up at shareholder meetings to try and figure out what might be contained in products they buy and ask whether the ingredients should be disclosed.

One of the most striking things is how little brands actually do know about what is in the products they sell. Justice, the children's brand featured, doesn't manufacture any of the products sold in stores. The product managers don't list ingredient information online, and the customer service teams haven't been trained to understand what is in the products.

Does this look like your brand? Are you purchasing raw materials from suppliers without understanding the ingredients that are in them? Do you have a policy to purchase only products with fully-disclosed ingredient lists? Most manufacturers don't. Would it be an advantage to you to be able to answer these kinds of questions from customers?

What is a Spec Sheet?

A Specification tells you the important features of an item you are purchasing. These will vary depending on the item.

For buying raw materials and chemicals, a specification includes the ranges of chemistry, the density of the material, color, and any limits on impurities such as heavy metals.

For finished products, the specification includes measurements such as weight, length and geometry features, and any functions performed by the item.

Some examples of what you may see on a spec sheet:

Glass Dropper Bottle: Blue virigin glass. Dropper with bulb. Dropper holds 1mL liquid. Bottle holds 15mL. Total weight 0.5 oz.

Ground Fine Pumice: 1 lb package. Particle size 149 to 240 um particles.

Receiving Goods

Do you have a process for bringing materials into your studio?

When deliveries show up, they should be checked against the purchase. Did you get what you bought? This includes quantity and product type. Does the item look, smell, taste as you expect it to?

The materials should be cleaned of any dirt or residues from warehousing and placed in the studio where they will be used. Update the inventory counts in your system (whether this is a computer system or a physical system on the floor). File any certificates of analysis and make a note of when the payment is due to the supplier. 

What is a COA or Cert?

A COA is a Certificate of Analysis. Sometimes also called a Cert or Certificate. It contains the results from any testing done on the batch of materials being shipped.

This certificate is different than a specification sheet. The Specification (or spec) tells you what SHOULD be in the material, often reported as a range. The COA tells you what's actually in the batch you are receiving. For example, if purchasing a bag of sugar:

Bulk Density

Specification: 800-850 kg/m3

COA: LOT 12345, Processed 1/28/19, 834 kg/m3

Book Club - The Bottleneck Rules

The Bottleneck Rules is a fast, easy read about bottlenecks.

Clarke Ching uses real-life examples to show how bottlenecks work and how working on them can help your processes.

Finding bottlenecks in your process and eliminating them is one of the fastest ways to improve.

What is a Bottleneck?

A bottleneck is the part of any process that limits the total process.


You cannot drink a beverage faster than it can come out of the neck of a bottle, no matter how big the overall bottle may be.
The bottleneck can be anywhere along of a process from start to finish. In chemistry are called "rate-limiting steps". In project planning it's called the "critical path". 
Spending time working on the bottleneck helps improve your overall process speed. Time spent speeding up the other processes is wasted effort if you don't improve the bottleneck. 
Do you know what the bottlenecks in your process are?

Inventory, Cash Flow, and Profit

Inventory sitting on your factory floor is doing you no favors. It can go obsolete, get damaged, and tie up cash. So why have it? Buying more product gets you more discounts, which increases profitability.

Everyone wants to be more profitable, right? There's even a shortcut to being more profitable, and it doesn't require any real work - dump all your cash into inventory. The fastest and easiest way to make a business look more profitable on paper is to decrease costs. The fastest way to do that is to pay less per unit for materials. The fastest way to pay less per unit is to buy in massive quantities. So - the quickest way to look good on paper is to dump all of your cash into inventory that will sit on your floor.

Or.

You could keep a careful eye on inventory, turning your cash into product in smaller amounts that keep your cash more readily available. You won't see big discounts in product and your profitability-on-paper might not look as nice. But you'll keep the doors of your business open longer.

End of day studio walk

Right before leaving for the day, take a lap around the studio to check for things that are out of place.

Someday I hope to do this and actually be able to leave! In the meantime, there's always time to out one more thing away to the proper place.

ProFood Tech - upcoming trade show

Attending trade shows is a great way to get ideas.

The ProFood Show, March 26-28, is coming up in Chicago and I'll be walking around to see how different liquid and solid food products are handled, processed, and packaged.

This gives an idea what my factory could look like in the next several years and introduces me to vendors that might be a good fit for ingredients, packaging, and equipment. Even if you don't make food, seeing how things get made with brand new machines on an expo floor usually sparks some ideas for improvements in your studio.

https://www.profoodtech.com/

I don't have an affiliation with the show. I have found that pre-registering is relatively inexpensive, and that usually a free registration code can be found with a quick search or by contacting an exhibiting vendor and asking nicely for a code so you can visit their booth.

Make Problems You Can Find

Major food manufacturing companies are worried about bits of metal ending up in cereal, granola bars, and yogurt. Lots of preventative maintenance is done on the machines to avoid pieces chipping off, but items are also inspected by high speed metal detectors as they are made.

You'd think this means any employee should avoid carrying around or wearing metal, just in case something like a button falls into production. But that's exactly what they do - make sure fasteners or easy-to-break-off items ARE made of metal. That way instead of losing a plastic button in a cup of yogurt, the metal button is easy to find.

What kinds of mistakes are you making that are hard to find? Can you make the mistakes more obvious?

What is Poka-Yoke?

Poka-Yoke is the process of designing in error-proofing.

In other words, make things really hard or impossible to screw up on accident. (making things hard for people that are TRYING to screw them up is a different story).

Your camera battery doesn't fit in your camera if you try to install it backwards. 

Your clothes dryer won't tumble if the door is open.

Your address is printed once, on the electric bill, and is visible through the envelope window, so no one gets mailed a stranger's bill. 

Our Lord and Savior, Lean Manufacturing

Lean Six Sigma Manufacturing. Have you heard of it? Have you certified as a yellow belt, a green belt, a black belt? Do you know the Founding Fathers of Lean? Have you named your firstborn after Taiichi Ohno?

It's okay if you haven't. Use the jargon, history, and methods that help your production. Leave the rest.

Colored tape for marking items

The best visual management system lets you identify something from across the room.

A simple, inexpensive way to help with this is using colored electrical tape. 

http://identi-tape.com/ is a Colorado-based company that stocks and ships all kinds of tapes in different colors. The tape is reasonably priced, and although the "shipping and handling charge" is a bit much (11.95 for a recent order of 4 rolls of tape), the processing and shipment times are excellent. 

I don't have a relationship with the company and don't know anything about them other than being a very happy customer. 

Materials Reserve and Low-Fuel Lights

Having a reserve of critical materials is important so you recognize when it's time to restock.

An annoying dashboard light tells you you are low on fuel; now you have time to plan for filling up the tank or plugging in your vehicle. In the meantime you have some fuel remaining, so you car doesn't simply stop in the middle of traffic.

Drums: closed head vs open head

Drums come in different sizes but a typical size is 55 gallons.

The top of the drum may be closed or open. A good brief video showing the difference is here: https://www.youtube.com/watch?time_continue=73&v=GxuyD1e5WT0

Summary:
-Open head drums are better for solids and thick liquids. The entire top of the drum comes off. The lid may be solid or have bung holes in it to hold a pump. They are easier to empty and clean out, but they aren't leak proof.

-Closed head drums are sealed except for one or more holes. These holes are typically threaded to accommodate pumps. The tight seals make them leakproof. These are better for liquids, especially those you want to avoid spilling such as hazardous liquids.

Different materials and ratings make the drums appropriate for different things, ranging from acids and caustic liquids to thick liquids and solid and granular materials. 

Physical Inventory tip: Handheld Tally Counter

If January is time for physical inventory, here's a great item to have on hand: a handheld tally counter. These may be familiar to you from seeing them in action the door checker at a big box store or a bouncer at a nightclub. Click once to count one. Very simple, and helps to avoid "Agh! I have to start over!" syndrome.

Inventory and Gift Cards

It's tempting to buy lots of inventory so you don't run out and you can take advantage of bulk pricing, but it comes with a downside. Buying inventory is like taking cash out of your wallet and turning it into several different gift cards.

Instead of $20, you now have $5 at Starbucks, a $5 Amazon credit, $5 at the local spice shop, and a single $5 bill left over for any other purchases. If you only actually needed $3 worth of coffee, a $3 kindle book, and $4 in sea salt, then you have $5 sitting around in unneeded product. You could have had double the amount of cash in your pocket to use on a different purchase.