"One of the most noteworthy accomplishments in keeping the price of (our) products low is the gradual shortening of the production cycle. The longer an article is in the process of manufacture and the more it is moved about, the greater is its ultimate cost."

What probably isn't surprising about this statement is that it was made by the CEO of a Fortune 500 company But what may be surprising is who made it and when Henry Ford, 1926. Ford was practicing lean manufacturing and just-in-time production and reducing set-up times at least 20 years before Toyota and other Japanese companies. What ultimately is most surprising of all is that few American companies really have taken these lessons to heart, even 75 years after Ford introduced them.

Set-up time is defined as the time that passes between when the last good piece comes off the current run and when the first good piece comes off the next run, while running at optimum rate.

On the surface, reducing set-up time may not appear to provide a significant payback, since set-up time in a typical manufacturing facility might represent only about 5-10 percent of total processing time. So, if that typical facility were to eliminate set-up time completely, the payback would be an increase in capacity of only 5-10 percent.

Reducing set-up time to zero can be expensive. So why are major companies working so feverishly to reduce set-up times? Maybe they see benefits other than increasing capacity.

Increasing capacity indeed is an important motivator for improving set-up time. Looking closely at capacity issues likely will reveal that most problems are caused by limited output of one or two machines or processes. These bottlenecks limit the entire facility's output, and probably are responsible for most late orders, so focusing time and effort on reducing set-up for key machines is going to be a good investment.

But most organizations that are effective in reducing set-up times discover big benefits in lead-time reduction and increased customer responsiveness. Lead time (or cycle time) is almost directly proportional to work-in-process inventory (WIP), and reducing set-up time also allows companies to reduce batch sizes, which results in an equal percentage reduction in lead time.
You usually can reduce set-up times by 50 percent without capital expenditures, and that same reduction in set-up time also can enable batch-size reductions of at least the same amount. So, in a relatively short amount of time and with no cash outlay, a company can reduce lead time by more than 50 percent.

But a set-up reduction program's most significant payback is that it may be the most-critical element, or at least the first step in implementation, of a successful lean manufacturing program. Without the reduced batch sizes that reducing set-up time enables, none of lean manufacturing's other components (UIT, Kanban, etc.) can be implemented effectively.
A few simple approaches to reducing set up time:

1. Measure key indicators to determine if progress is being made
   Current WIP (measured in terms of dollars or total pieces)
        • Current average lead time (in days)
        • Average set-up times (in minutes) of the worst 20 percent of all machines/processes
        • Average number of late orders at any point in time
2. Implement a set-up reduction project on the machine or process causing the biggest bottleneck. Your initial goal is to reduce set-up time by 50 percent without spending money.
3. Once you've reduced that bottleneck's set-up time by about 25 percent, begin reducing set-up times on the next 2-5 worst offenders. Again, your initial goal is to reduce set-up time by 50 percent on each machine without spending money.
4. When you've completed these set-up reduction projects, reduce batch sizes by at least 25 percent across the board.
5. By this point, lead-times should be down by 25 percent, and late orders probably won't exist. WIP also is down 25 percent, along with inventory carrying costs. Review your original bottleneck. Were any ideas suggested for reducing set-up time further with small capital investments? If so, implement them and reduce batch sizes further. If not, investigate other ways to increase that machine's productivity.
6. As soon as the facility is operating smoothly with a 25 percent WIP reduction, reduce batch sizes by another 25 percent. Other issues will come to light and expose additional opportunities for improvement, because large batch sizes can mask quality problems, machine downtime, material shortages and other concerns. Address these issues as they arise and continue reducing batch sizes. Remember - set-up reduction is a continuous improvement activity.

Some basic concepts / tips on reducing set-up times:

• Understand the difference between internal and external activities. Internal activities are those that must be done while the machine is stopped, such as changing welding probes on a welding machine. External activities are those done while the machine is running, such as retrieving parts and tools for the upcoming order. With that in mind:
• Treat external activities as true external activities. For example, if the machine operator also is responsible for getting parts for the next order, have someone else do this while the machine is still running.
• Change as many internal activities as possible to external ones. Get parts, tools and other needed items ahead of time. If the changeover is being delayed pending first-piece inspection, determine the risk of running while doing the inspection. Pre-heat parts (such as dies) offline that need to be hot to operate properly.
• Reduce the time it takes to complete internal activities. Use two people to perform the changeover, replace bolts with dowel pins or notches and install quick disconnects.
• Use a gopher to do external tasks. Make sure everything needed for the changeover is organized and on hand before the changeover begins.
• Try to position and orient everything so the changeover operator moves his/her arms but not his/her legs.
• Color code machinery and parts to prevent mistakes.
• Use guides and stops for placing fixtures and dies quickly. Eliminate variable adjustments by using block gauges.
• Put changeover tasks in a checklist and revise the list as set-up time improves.
• Graph progress. Set goals and objectives (50 percent reduction, 75 percent reduction, etc.) and document achievements on the graph.
• Don't allow deviation from die and jig standards.
• Videotape the changeover and review it for improvement opportunities.
• Eliminate bolts. On those that can't be eliminated, remove most of the threads. Use just a few common sizes of bolts and nuts to reduce effort and time required to find wrenches or other tools.
• Organize work areas and tool cribs.
• Pre-heat and install parts hot. Remove the parts hot.

Many companies find set-up times can be reduced to less than 30 minutes without significant investment - set-up time targets for many world-class manufacturers is 10 minutes or less.