DFT IMPLEMENTATION IN BRAZILIAN INDUSTRIES

BEZERRA, Jackson Leandro Luna

INPG – Instituto Nacional de Pós Graduação

jackson.bezerra@gmail.com

ABSTRACT

This study will try to find out the possibility of using the DFT (Demand Flow

Technology) business strategy in Brazilian industries, especially metallurgic

companies. The basic question the study is trying to answer is why this technology is

almost unknown by Brazilian companies. It also aims to increase the knowledge

about the technology in Portuguese, as there is no known bibliography in this

language. DFT is a business strategy that aims to increase the productivity by

eliminating wastes in the shopfloor and, at the same time, meeting customer’s

demands with no loss of productivity.

Keywords: DFT, productivity increase, waste elimination, business strategy,

market demands

1. INTRODUCTION

Nowadays it’s getting harder every day for the industries to acquire a

sustainable competitive advantage over its competitors. The manufacturing world

today is quite similar to what it was 30 years ago. High performance Brazilian

companies keep focusing on waste elimination, continuous improvement and lean

manufacturing, employing concepts from W. Edwards Deming and Eliyahu Goldratt

invented from the 70’s to the 90’s.

There is, however, a business strategy being used successfully in USA during

the same period that is basically unknown in Brazil. Its name is “Demand Flow

Technology” and it will be commonly referred in this work as “DFT”.

DFT is a business strategy created by the American executive John R.

Costanza. The technology uses applied mathematical methods to link raw and in-

process materials with units of time and production resources in order to create a

continuous flow in the factory. This strategy is promoted as a method particularly

suitable for high-mix, low-volume manufacturing.

Costanza’s ideas regarding the technology started to be created while he was

an executive with operations management experience, working in companies such

as Hewlett Packard and Johnson & Johnson. When the technology was totally

finalized, Costanza left the corporative life, wrote a book about his technology (The

Quantum Leap: in Speed to Market) and founded John Costanza Institute of

Technology (JCIT) to provide consulting and education services for manufacturers to

implement the methodology. Early adopters of DFT include American Standard

Companies, General Electric and John Deere. His work was nominated to a Nobel

Laureate in Economics for Working Capital Management in 1999, besides being

nominated as one of the “6 Heroes of U.S. Manufacturing” by Fortune Magazine in its

March 2000 issue.

Therefore, considering all of these credentials, it is surprising the fact that the

technology is almost unknown in Brazil. This article aims to understand why this

business strategy is not adopted in Brazil, being so successful around the world, and

especially in USA. The study foundation is based on my experience implementing the

technology in an American multinational company in Brazil and also interviews

performed with American consultants that works with the strategy.

2. THEORETICAL REFERENCES

DFT is a business strategy used in industries; therefore it is not surprising it

uses robust concepts in the market such as 5S, continuous improvement and lean

manufacturing, besides the usage of tools such as ERPs (Enterprise Resource

Planning) and MES (Manufacturing Execution System). However, the whole DFT

concept is much more than tools and concepts known in the Market. Costanza has

developed unique tools to DFT that improve the way how companies identify,

enhance and manage its processes flow, always driven by the demand – it is the

customer that by “purchasing” the product in the last cell at the assembly line, “pull”

the productive process, thus the strategy being called “Demand Flow Technology”.

Thus, in order to implement DFT in a manufacturing process, the first task to

be made is describe the product synchronization. It is the foundation for all other DFT

activities. According to Gillian and Taylor-Jones (2005, p.26), product

synchronization defines the relationships of the individual flow processes coming

together to create the part or product.

Figure 1 – Product Synchronization

Starting from this synchronization, each of the identified processes needs to

be detailed. In order to do that, Costanza created the Sequence of Events. As per

Gillian and Taylor-Jones (2005, p. 27), through this toll the processes are described

in the proper way they should be performed and also the time required to performed

them are measured, avoiding operators to think in other methods of performing a

work step taking a longer time than the necessary. Besides stating the proper

methods to perform the tasks, there is also TQC (Total Quality Checks) identified in

the SOEs. Each task in the sequence of events falls into one of four categories of

work: required labor work, required machine work, setup time and move time. Still in

accordance with Gillian and Taylor-Jones (2005, p. 28), using this categorization it is

possible to identify non-value-added steps (setup and move time) which are the tasks

we should try to eliminate in the process in order to decrease the process time.

Figure 2 – Sequence of Events

The sequence of events is the base document to create the Operational

Method Sheet (OMS) that will be available for the operators during the process

realization. This tool consists of detailed instructions the operators should perform in

order to assure the processes occur with the best quality and in the best time

possible.

Figure 3 – Operational Method Sheet

Another thing that assures the processes quality are the so-called TQCs and

Verifies that the operators perform in their tasks. According to Gillian and Taylor-

Jones (2005, p.177):Illustrated TQC operational sheets not only show the operator the work to be

performed, they also show the work to be verified and the required total-

quality-control inspections. Employees can verify work performed at the

same operation, but they can never do a TQC inspection of work performed

at the same operation. Any time multiple times to perform work exist, but

only one way is correct, the work requires a TQC at another operation.

Therefore, when the operator perform the task, he shall verify if what he’s

done was proper (if it’s something considered critical for the product), and when he

perform a Verify, this generates a TQC in the next operation, as this other operator

will check if the activity previously performed was done properly. TQCs and Verifies

activities are identified in OMSs through a red triangle (TQC) and a blue circle

(Verify).

Another DFT tool used to assure the production flow and the customer

demands is the so-called “Employees Flexibility”. This tool definition according to the

John Costanza book update written by Gillian and Taylor-Jones is (2005, p. 159):Production employees in Demand Flow manufacturing must be able to work,

at a minimum, “one up” and “one down”. In other words, they must be able to

do the operations on either side of them, which means they must be able to

perform at least three different operations: their one, the one immediately

before it in the process, and the one immediately after it in the process.

This tool grants to the production line a faster response to the needs, since the

operators can “flex” from one cell to the other in order to help in case of difficulties.

More than that, under a high turnover environment, flexibility is crucial for the

processes’ continuity, which proceeds even with “holes” in the assembly line. .

Figure 4 – Operators Flexibility

However, in order to have the employees’ flexibility working properly, it is

necessary the company assure the operators know the activities in his station and

also one up and one down. Therefore, a skill matrix shall be created to record the

operators’ certification in each operation. The matrix describes either the operator is

certified in that station or if he is under training. It also states if the operator is a

“Master” – which means he can certify other operators. Operators shall be re-certified

under a certain period of time, so in order to track it down the certification date is

logged for each operator in every certified station.

Figure 5 – Skill Matrix

Besides all these tools, and using them, DFT also uses applied mathematical

methods to calculate Kanban, Demand at Capacity, Operational Cycle-Time, the

amount of people needed at each station and even how flexible the assembly line

should be in mixed-model environments. Using all these tools, the technology allows

the design of the best flow line, grouping tasks designed as the best possible flow

line. According to Gillian and Taylor-Jones (2005, p.36):In flow manufacturing, the design of production lines and cells always

supports the highest required volume and the corresponding shortest

required operational cycle time. When designing a flow line or cell, the

manufacturer should seek management’s and sales’ most realistic prediction

of the highest anticipated capacity volume for each product.

The required volume must look forward at least a year into the foreseeable

future. The flow manufacturer then calculates the targeted operational cycle

time based on this anticipated highest demand to calculate process takt time

for the line.

Utilizing these tools, it is possible to have a flexible line, meeting the demand

forecasted and that could also meet lower fabrication levels, as using the operators

flexibility it is possible for them to work on more than on operator as they are certified

on them, without loss of efficiency. It will also avoid production peaks that can’t be

met.

Figure 6 – Demand Scheduling Before and After DFT

Implementing this business strategy, what impact will DFT have on your

business? The answer is given by Goodwin (2014), responding that, on average,

businesses will see improvements of 41% in working capital, 9% in customer service

levels and 8% in cost of goods sold (COGS). Having all those qualities, what could

be the reason this technology is almost unknown in Brazil?

Demand Chart – Before DFT

Demand Chart – After DFT

3. RESEARCH METHODOLOGY

Due to the lack of people with DFT knowledge in Brazil, the research was

performed with American consultants that work implementing and training people

from industries interested in having the DFT technology in their companies. Two

consultants with wide experience in the tool were interviewed, plus a former JCIT

consultant (JCIT is the company founded by the technology creator, John Costanza).

The research was performed in an interview format with 4 basic questions and they

are going to be discussed in the next chapter.

4. RESULTS DISCUSSION AND ANALYSIS

In order to understand if there are Brazilian companies using the technology,

the first question asked to the consultants was “Have you already worked in the

implementation of the DFT technology in non-American companies? If your answer is

yes, in which countries those companies are based?”.

The first consultant, Bobby Click1 , answered that he had already worked in the

DFT implementation in non-American companies and cited the list of foreign

companies he had already worked with and the respective countries: Bang & Olufsen

Medicom (Denmark), Carl Zeiss AG (Germany), Leybold AG (Germany), Iscar

(Israel), Aviv (Israel), Dansk Bank (Denmark), Inwido (Denmark), Astra Zeneca

(United Kingdom), Atlas Copco (Sweden), Maestro Business (Denmark and United

Kingdom) and Louwen Windows and Doors (Canada). When argued if he had

already worked in any Brazilian company with DFT, Bobby answered that only in the

Brazilian plant of NACCO Materials Handling Group, but which is, in fact, an

American company with a plant in Brazilian territory.

1 Bobby Click is a DFT Consultant for more than 22 years, being 11 at John Costanza company, JCIT, and 11 in his own company, Spike Enterprise.  In these 22 years he gave consultancy and helped implement  DFT   in   companies   such   as  General   Electric,   Stanley   Toolworks,  Northrup  Grumman, Atrium Doors  and Windows,  Black  & Decker,  Nacco Materials  Handling  Group,  Mentor  Medical, Varian, LAM Research, John Deere, Stryker Inc.,  American Standard, Cascade Designs, Flextronics, Fastenal, Storage Technology Corporation, Copeland Compressors, and Respironics, among others.

The second consultant, Mike Cavanaugh2 , answered in a very similar way.

Mike claimed to be worked in DFT implementations in the following countries:

Mexico, China, Malaysia, Saudi Arabia, United Kingdom AND Israel. However, Mike

emphasized that typically the engagement starts from an American company

recommendation or connection via a supplier or customer and, once they see the

potential results, they start to run trial implementation programs. Mike also confirmed

that he never worked in DFT implementation in any Brazilian company, despite

having applied DFT training to Brazilians in USA, but those people worked for

American companies.

At last, the response given by Kal Tailor3 also followed the same pattern. Kal

has been involved in several DFT implementations when he was a consultant in

USA, as well as in Mexico, Canada, Japan and currently he is supporting the

Brazilian plant of the company he works nowadays.

The second question was made considering the answers given for the first

question: “Considering you have never worked with DFT in Brazilian companies, do

you see any kind of barrier of implementing the technology on non-American

companies?”.

Bobby Click answered he does not believe it has something to do with

nationality. In his answer, Bobby highlighted the barriers he has encountered are lack

of management understanding and/or commitment to the DFT process, and lack of

establishing a technology and deployment foundation through targeted education and

consulting for all personnel in the target scope of deployment. Bobby has also

affirmed the realignment of current management metrics to those more consistent

with DFT strategies and tactics is also critical to drive performance measurements

and desired personnel behaviors.

2 Mike Cavanaugh had his first experience with DFT 15 years ago, while worked with the technology at General Electric. Ever since he has been working with the technology and he is now the President of High Impact, company that offers training and consultancy in the strategy. 3 Kal Tailor was JCIT consultant (John Costanza’s company) since the very beginning. He was part of the first 13 people hired to start JCIT, and he also helped in the process of writing “The Quantum Leap: In Speed to Market” book, still today considered the “DFT Bible”. Tailor spent 5 years in the company and worked in more than 50 DFT implementations in companies such as GE, Lennox, John Deere,  Trane,  GE  engines  and  many  others.  After   this  experience,  Kal  had  his  own consultancy company   for  over  10  years,  and  afterwards  he  was  hired  as  Divisional  DFT  Manager  at  NACCO Materials Handling Group, being responsible for maintaining the strategy in all American plants in the group, along with the Mexican and Brazilian plant. 

Mike Cavanaugh’ response follows the same pattern as Bobby Click’s.

Cavanaugh believes the power of DFT is the same, regardless of the environment,

which means the possible barriers shall exist no matter the company nationality.

Kal Tailor’s answer is also quite similar, although he believes the language

may be a barrier. Tailor mentions that the main barrier is the way the technology is

considered. He believes most countries uses a “product” driven philosophy, while

DFT is a “process” driven business strategy. Kal states this is the main barrier, since

DFT shall not be taken as a “project” as most companies considered, but as a “Way

of Business”, and it has to be part of everyday life and accountability. Tailor finalizes

saying that, despite being said the language could be a barrier, personally it was not

a barrier for him, as he was born in Hungary and always had familiarity with several

different cultures in different languages, which always facilitated in his approach.

The third question was about the strategy benefits: “Do you think the benefits

from implementing the technology could work in any industry, regardless of culture

and language?”.

Bobby Click answered yes to that question. Click said he had educated and

implemented DFT technology in the following industries; High Volume/Make-to-

Stock, Low Volume/Make-to-Order, High Volume/Make-to-Order, Machine Intensive

Processes, Health & Medical, Aerospace & Defense, Process and Service Industries,

and there are proven quantifiable financial and non-financial benefits, including

improved response and customer deliveries, higher quality, lower costs, improved

employee productivity and morale, reduced inventories, working capital and

overhead expenses.

Mike Cavanaugh’s answer was also affirmative. According to Cavanaugh, his

company’s internal studies have shown that regardless of industry, location or

language DFT has tremendous benefit. Mike stated the power of shortening lead-

times are universal as it makes you less open to variation, ties up less cash and has

higher level of productivity even in countries where labor rates are extremely low.

Mike also said that in Northern Mexico in particular, every year most of the workers

leave and go home for the holidays, and companies expect that 20 to 40% will not

return, therefore they have to train an all new workforce each year taking a hit to

quality and performance while the new workforce gets up to speed. Using DFT and

focusing on mixed-model process design and OMS creation, it is possible to usually

reduce the work content time a person must know in order to work on the line and

with visual work instructions developed to standards makes it easier for the person to

learn the new role.

Kal Tailor corroborate his colleagues’ responses, saying that in all companies

he had worked it was possible to obtain the benefits when the company really

understands the concept of value added and non-value added, as the DFT

consistently pursues the elimination of non-value added activities. Tailor quotes that

an example of value and non-value is a banana – you pay for the peal and the fruit,

but the only value is the fruit, the skin has not value to you. Kal finalizes saying that,

in summary, regardless of culture and language, the companies should always look

at the direction of successful companies, follow them, and improve in order to be

ahead of competition to grow the business.

Finally, with the answers of these three first questions, it was already possible

to identify that indeed no Brazilian companies utilizes the strategy and it should have

no barrier, either language or culture, that could stop a Brazilian company of

implementing DFT. Therefore, the final question was made to the consultants: “Why

do you think there are no Brazilian companies working to have DFT in their

facilities?”.

Bobby Click answered that as he’s not intimately familiar with the Brazilian

markets, this is a difficult question to answer. He thinks Brazil is an enormous

emerging international market, and the answer is likely a combination of several

factors, among them lack of awareness. Click said this could be addressed through

communication, public education and demonstrated results from early adopters.

Familiarity can also be increased by leveraging non-Brazil owned companies

practicing DFT that may have facilities in Brazil. According to Click, once the benefits

of DFT become known in one industry, the interest tends to spread quickly within that

industry, and with a solid foundation of executive awareness and understanding of

DFT that awareness can extend across industries.

Still according to Click, other barriers to deploying DFT can be the “not

invented here” syndrome, the “we’re already doing a lot of this” rationale, that DFT is

just another “program of the month” and will go the way of other initiatives tried in the

past, and other excuses. The strategy is simple to describe, but requires a level of

focus and attention difficult for most companies to understand, adopt and support

over time while adapting to changing market and customer needs. Change

management for all personnel from executive-to-execution must be diligently

monitored and all employees must be engaged and input encouraged throughout the

transition to establish the momentum necessary to make the change to DFT

permanent such that DFT principles and practices become woven into the fabric of

everyone’s daily work routines, and process ownership at the individual level.

Click finalizes saying there is also a financial component needed to establish

the DFT foundation. This is for both education and at least a first DFT deployment so

a company can be immersed in the technology to the extent that they are ultimately

able to sustain the DFT environment on their own. The financial outlay is necessary

before any real benefits can be realized; therefore usually companies are afraid of

making such investment.

Mike Cavanaugh said he does not know the Brazilian Market deeply, so he

can’t precisely say what is the reason DFT is not known in Brazil. In spite of that,

Cavanaugh affirms he can’t see any barrier that could stop a Brazilian company of

implementing DFT in their productive processes.

Kal Tailor also said he can’t give a total answer on the subject, but he could

try to guess why does this happen. First of all, the training and knowledge of DFT has

not been seen, accepted, or tested in the country; the schools haven’t done any

evaluations on DFT so they have very little knowledge to pass onto students; the

management of companies are “too busy” to look at what the plants should look like

5 years from now; and finally, he said that maybe the Brazilian Government is not

supporting the introduction into the country, schools, or business’s, and it should be

doing that. Kal finishes saying that Deming was trying to implement “New Processes”

in the US and the Americans did not embrace it, so Deming went to Japan, who

created the Toyoda principles and became very successful taking away

Manufacturing Excellence from the USA. Then DFT came around in the early 90’s

and was embraced by companies in the USA and became very successful. Thus,

DFT is maturing into the USA and expanding into all types of companies, so in order

for Brazilian companies to compete they will need to embrace DFT very quickly.

5. FINAL CONCLUSION

This study objective was to understand why the DFT business strategy,

successfully used in the whole world and especially in the USA, is not used in

Brazilian territory. DFT consultants were interviewed in order to understand why the

technology is nearly unknown in Brazil.

Considering the results presented above, the conclusion is that there is not a

single reason to determine why the tool is unknown to Brazilian companies, but a

series of factors that influence so that the strategy is not used in Brazil: lack of

knowledge about the tool in Brazilian territory, lack of Brazilian companies using it,

but mainly lack of interest from executives and government, and I hope this could be

minimized with the production of this article in Portuguese language, helping in

spreading the knowledge about it in Brazil.

6. REFERENCES

GILLIAM, Dean and JONES, Steve-Taylor, Quantum Leap: The Next Generation,

JCIT International, 2005.

GOODWIN, Sandy, How DFT Impacts Your Business Part 1, an April 24th, 2014

blog article, available at http://myhicoach.com/demand-flow-technology-impact/

Accessed in: September 27th, 2015

FULMER, Mark, Falcon V FlowPower from JCIT, article available at

http://www.theautochannel.com/news/press/date/19990726/press027219.html

Accessed in: September 25th, 2015

THE FREE LIBRARY. Fortune Magazine Names Englewood CEO a Hero of U.S. Manufacturing; JCIT's John Costanza Honored Alongside 5 Other U.S. Innovators, article available at

http://www.thefreelibrary.com/Fortune+Magazine+Names+Englewood+CEO+a+Hero

+of+U.S.+Manufacturing%3B...-a060501265, Accessed in: September 17th, 2015