Drummond's Time Standards for Lean Manufacturing

I was first exposed to the art of estimating labor costs for a truss plant in the early 90’s.  The company I was with was installing new design software, and the labor estimation part of the program needed to be set up.  I had no idea how to approach that task, but I observed a senior salesman who was doing the labor setup.  He assigned various time values to elements such as board footage, lineal footage and numerous other factors.  He would then adjust the computed figure based on his feel for the job.  What I did notice was how few truss examples he used to actually create the labor estimation formulas.  He was satisfied with his results, because on “average” it worked out.

This method of using averages is normally referred to as bottom line averaging.  It is a flawed method for individual work order labor cost and should be always avoided in lean manufacturing facilities.

Most truss shops use one of the following factors for estimating labor…

1) Board Footage    

2) Linear Footage                                              

3) Material Cost    

4) Sales Dollars

5) Number of Lumber Pieces (***Latest seriously flawed method***)

It is easy to understand why most truss shops use these numbers.  They are easily derived from the truss design program.  However, none of them can be directly linked to actual labor man-minutes required for any given order.

Board Footage – Do you think your employees would rather build pole barn trusses or a hip roof system based on board footage?  Every production supervisor will tell you that board foot is a very poor method of understanding how long an order will take to produce.  Board footage does not have any consideration for setup time for saws or tables.

Linear Footage – Are common trusses as easy to build as customized profiles with multiple pitch breaks?  Again, setup time is completely overlooked and other factors such as number of varying time requirements of piece types is completely ignored.

Material Cost – When the material costs fluctuate because of market conditions, does the ease of building the trusses coincide?

Sales Dollars – When an order has been discounted, does it mean they can build the order faster?

Number of Lumber Pieces – Number of lumber pieces do not proper handle the setup and most do not adjust for lumber length and size.  The "average" setup time divided over numerous pieces really skews the labor estimations.  For orders with very few setups the time estimation is way over estimated and complex orders with complex setups are extremely under estimated.

 Estimating time by the number of piece example…

 Order #1

• Automated saw has setup time of approximately 1 man-minute per unique setup 
• Sawyer and lumber catcher for 30 seconds equals 1 man-minute

• Quantity of 6 of 2x4x8’ for an average time of 5 seconds of saw time
•  5 seconds of saw time is multiplied by 2 crewman equals .17 man-minutes each

• Total time = (.17 runtime per piece * Qty of 6) + 1 saw setup = 2.02 man-minutes with proper setup.
• Average time per piece is (2.02 / 6 = .337)

 Order #2

• Automated saw setup time = 1 man-minute
• Sawyer and lumber catcher for 30 seconds equals 1 man-minute

• Quantity of 20 of 2x4x8’
• 5 seconds of saw time is multiplied by 2 crewman  equals .17 man-minutes each

• Total time = (.17 * 20) + 1 = 4.4 man-minutes with proper setup.
• Average time per piece is (4.4 / 20 = .22)
• *** That is a 65% difference for just 2x4x8*** There is no conceivable way you can use average time per piece and be consistent with your labor estimations.

***Do NOT let some plate/software vendors tell you that piece count is a proper method for labor tracking efficiencies!  Their software cannot track via proper man-minutes and they are trying to convince you that it is good enough.  For a better labor tracking software alternative see my labor tracking software. Truss Shop Labor Tracking Software ***

We all try to make allowances for the given complexity of each order.  We try to factor in whether there are numerous setups or the board footage changes based on cord size.  However, can we say with any honesty that we are consistent?  We all make the same mistake repeatedly by telling ourselves that what we are looking at is the average rate.  To make matters worse we try to measure individual groups on a daily basis that does not relate well to the “average”.  Intuitively we know that none of the measurement tools really works on the individual level, but that is all we have had to work with.

Knowing how long the individual activities should take, by doing time studies, is called Time Standards.  Time standards have a long history in development of the practice.  Even Benjamin Franklin did his own time studies.  Toyota really made it mainstream with the practices of Lean Manufacturing.  If you say you are practicing Lean principles than time standards, at the activity level, is a must.  In the truss industry, we sometimes refer to this as the “Houlihan” method of measurement.  (Man-Minutes, R.E., or S.U.)  John Houlihan was an Industrial Engineer who preformed time studies for companies who hired his services.

Proper time standards are not derived from knowing what has been done, but knowing what should be done.  It takes many hours of tedious number crunching and watching people work with a stop watch.  Note this should not be thrust upon an individual, such as a designer or salesperson, with no prior labor time studies training or understanding.  This type of work cannot be done in a few hours or even in a few days and it requires a great deal of effort.  

Ok so now you are asking yourself, if it really matters whether you know how long it takes to do the individual activities?  Industrial Engineers are educated with the following…

 For Most Manufacturing Shops - Gains Expected from Clear Time Standards

*All performance figures have a normal deviation range of +/- 10%.  Source from case studies with Industrial Engineering Consultants Mitch Fein and Fred Myers.  These studies have remained consistent across various other bodies of work and are considered statistically valid.

On average, most manufacturers gain a 42% increase in productivity by simply employing proper time standards.  ((85% - 60%); divided by 60 = 41.7% gain) What manufacture would not like a 42% gain in productivity?

Todd Drummond Consulting provides Truss Manufacturing Time and Motion Standards

• 9^th year as full time lean manufacturing consultant.
• 50+ consultations completed
• 20+ year in the truss industry.

Truss manufacturing Time Standards

• Proper Production Efficiencies
•  Proper Pricing of Trusses
• Proper Scheduling of Production

80 Different Time Elements to Choose From for Differing Conditions

• All time elements are based on man-minutes in units of 100’s and are for normal staffing. 
• May use time estimations for Man-minutes, R.E. or S.U.
• All labor estimations are for “Setup” and “Run/Build” on the following equipment assets…

1.  Semi-Auto Fence Line Pull Saw - Example: Speed Cut, Mango or others
2.  Linear Automated Saw - Example: ALS or Omni Miser
3.  4 or 5 Blade Manual  and Automated Component Saws - All types component saws
4. Roller and Hydro Press Gantry Tables with AutoSet/Wizard, Laser and No Laser for Roof trusses
5.  Any kind of gantry table with various setup systems
6.  Roller and Hydro Press Gantry Tables for Floor trusses
7. Any kind of gantry table with various setup systems
8.  Does not include any kind of support activities such as lumber/plate picking, lumber stacking or other kinds of support activities.

Terra Nova Trusses - We felt the time was right to have a person like Todd give us an independent assessment of our entire operation. We were struggling with labor estimations on certain jobs, and Todd implemented the proper Time Standards for us to follow, which would allow us to be more precise on job costing.

See reference page for statements by general managers and owners about services.

In recent years, the market for component manufacturing businesses has changed drastically.  Our industry has become extremely competitive. The drop in construction has caused manufacturers to reduce prices as far as possible in order to “get the job.”  During this time, we are forced to question our estimating techniques.  We believe that a critical key to success is the ability to identify our true cost on every job that we estimate.  We have to be aware of the point at which the job is no longer profitable.

Todd provided us with time standards which were specific to the equipment that we use.  This information allowed us to estimate our jobs with a dramatically increased level of accuracy on each project, regardless of its level of complexity.  The time standards also gave us the information to measure our production and establish target output for each workstation in our shop.

Todd also offered suggestions for lean manufacturing practices, marketing, quality control, production, and design incentives.  We continue to implement his ideas, which have received positive feedback from our customers. Each has resulted in improvements to our operations.

I recommend Todd’s consultation to any truss manufacturer, even during this difficult market.  The expense of the consult was money well spent in improving our profitability.