Volume 8, Issue 3 - March 2007
The Road to “Lean”
Company Leaders Explain Why Becoming Lean is a Journey, Not a Destination.
Lean” is a popular buzz word today that describes the way a company can operate when it is optimizing its assets without significant waste. Sounds like a plan for success, right? You make the most of your resources, improve output and make more money. But, as several door, window and component manufacturers explain, the process of implementing lean manufacturing is a journey, and it means making huge changes in the way that everyone—from the chief executive officer (CEO) to the hourly worker—does their jobs.
Manufacturers who have implemented these principals in their plants describe the journey to become lean as a quest. No, it does not happen in a week, or even a month. Rather, some say you may not see any tangible results for at least six months. However, the benefits of becoming lean have outweighed the initial investments of resources, company leaders say.
Why Go Lean?
For Lauren Manufacturing in New Philadelphia, Ohio, a full service extruder and molder of organic, silicone and specialty polymer products, the decision to make the organizational transformation started at the top with the CEO, Kevin Gray. The company’s first goal was to make sure the company would have a future, says Lisa Huntsman, vice president of operations for the company.
“Lauren was losing its competitive edge and its financial health was decreasing,” she says. “Adding bodies to the company wasn’t solving the real issues that needed to be addressed … Lean was the means to improving its operational effectiveness which led to greater responsiveness to the market place finally bringing back profitable returns to the company,” Huntsman continues.
Great Lakes Window, a Toledo, Ohio-based manufacturer of vinyl replacement windows and patio doors, went through a process to achieve what it calls “operational excellence.”
“We needed to more clearly define a set of quality guidelines and practices,” the company’s president Jeff Klein explains.
Windsor Windows and Doors president John Smit made the decision to implement lean manufacturing into the plant two years ago.
“My background is not in the industry, and [Smit] recognized the fact that he wanted to start changes in a different direction by hiring me,” says Sheets, general manager.
Lauren officially started its lean journey in December 2002.
“We completely re-thought and re-organized our manufacturing processes based on their value streams,” says Huntsman. She says that the company actively looks for the removal of “eight deadly wastes,” which includes waste of defects, overproduction, waiting, not using peoples’ talents, transportation, inventory, motion and excess processing.
The ownership and leadership at MI Windows and Doors of Gratz, Pa., decided to implement the Toyota Way into its plant two years ago—coining the phrase “MI-oyota Way.”
“It’s continuous. It’s never ending, and it’s ever-changing,” says Brian Shilling, director of marketing and business development for MI Windows and Doors.
Bringing in Help
MI had two consultants come from Toyota and who went through the facilities.
Lauren also brought in help in the form of Todd Weston of Prophet One Solutions. Weston led a one-day single piece flow simulation called “Bright Ideas.” Both the hourly as well as all of the salary employees participated in the simulation.
Mike Sheets was hired by Windsor’s president to implement the new strategies of lean manufacturing.
“I had to prove that I could ‘walk the talk.’ I started teaching the management team [lean manufacturing principals], and then we got some of our management Greenbelt training.”
Six Sigma Green Belts are trained to utilize fundamental Six Sigma tools to improve processes, typically in their respective department or unit.
After a year, Sheets needed to move more into the general manager role that he was hired to do, so a third-party was sought to conduct training for employees. In recognizing how important training is, Windsor has built a new 105,000 square-foot facility for different trainings, Sheets says.
Implementing New Ways
“We broke the company into six process value streams and made them ‘mini-businesses’ within the company’s walls,” says Huntsman. Each business unit comprised of a multi-disciplined salary team including the leader, planner, customer service, quality and technical. Each of these business units had bid positions for the hourly workforce which also reported directly to the business unit leader, Huntsman explains.
In the process, Lauren went from ten inventory turns to more than 30 inventory turns, removing more than $2 million in inventory.
Windsor Windows took a different approach to lean manufacturing.
Sheets explains how they started with small projects—like value stream mapping events—where they would look at a project within an area. They would break off an area and just work on a portion.
“[The idea is] to take the current state and create a future state and implement the changes,” says Sheets. “We got people in the projects and [they would] actually complete them ... After each project, there would be a presentation and if there was savings, we’d implement the project. We looked at the money savings at each project.”
Sheets refers to the process his company has undergone as “JOE,” which refers to journey of excellence.
“We want to be fast, flexible and reliable to our customers, and easy to do business with,” says Sheets.
“We strive to build—not inspect—quality into our products,” says Jim Smercina, plant manager for Great Lakes Window, says. “We’ve adopted 5S and Six Sigma procedures, as well as robust process quality controls.”
Huntsman says that Lauren identified as much, if not more, waste in the administrative areas of the business.
“We stopped operating in a traditional ‘batch-and-queue’ structure and have worked diligently towards single piece flow throughout the organization,” she says. “This includes the paperwork side of the business as well.”
Getting hourly workers to buy into the ideas that lean manufacturing can make their lives easier is the key, says Shilling.
“They have to recognize that the work would be less movement, more products and more money in their pockets,” he says, explaining that the workers would produce more units, which would help their cause.
So, what happens when, in the process of identifying waste, a company realizes that some of the positions are unnecessary?“
As you become leaner, in some instances, we reorganized where a worker or a force wasn’t up to snuff. Our people have been empowered by this, and have taken this on as their own initiatives,” Shilling says.
Sheets agrees, and describes how Windsor uses its seasoned employees to encourage the rest of the workers.
“It’s a tool set to teach people to see efficiencies in the system,” says Sheets. “We had ‘Lean 101,’ a training program, with all our hourly employees. And in each area, we would select out a subject matter expert (SME). The expert would be someone who the other employees looked to as a leader, and that person would become our biggest representative.”
Some of the SMEs at Windsor are hourly workers, Sheets explains. “If they [SME’s] can see the benefit [of a new idea], then they buy into the program. And then they can get the others to buy into it.”
“Empowerment” is the word that Shilling uses to describe the plant workers at MI.
“Our people feel that every day they can make a difference,” he says.
Additionally, Shilling says that MI plant managers from all over the country have responded well by conversing with each other.
“They communicate to each other what works for their plant.”
“Without hesitation the hardest thing to change is that of the mind. Without buy-in and true understanding by the employees of why we need to change, the company cannot and will not succeed,” says Huntsman.
“One of the things that’s hard is breaking the old paradigms … Getting away from saying, ‘We’ve always done it that way, it can’t be too bad.’ It’s a new level of thinking. It’s open and it allows the brutal facts to come out to address the problems.”
Sheets says that when people can get past pointing fingers at each other, they can truly come together as a team.
“We had a good team from the start, but some of the members didn’t want to be part of it. Not all of the players wanted to participate, so some of them left the company because it wasn’t what they wanted to do,” Sheets adds.
Since they’ve implemented changes into the plant, Windsor Windows has seen improvements in time and complete delivery by approximately 10 percent. Labor has improved by 10 percent in standard and efficiencies and the cost of waste has been decreased by 25 percent, reports Sheets. Additionally, quality has improved by 15 to 20 percent.
“All the areas have undergone positive changes,” he adds.
MI has seen a 10 percent production output.
“It’s hard to put a real number on it, but we’ve seen increases in output, but the quality has to go hand in hand,” say Shilling. “Our safety records are better, and we put out a lot higher quality product.”
Great Lakes Window’s customers have noticed the difference also.
“At a rate of two a week, we bring our customers through the facility to experience the enhancements first hand,” Irving explains. “We are seeing a sustained decrease in customer backorders, and our on-time complete shipments have exceeded expectations.”
Having just finished its fourth year with the process, Huntsman says that Lauren is pleased with what its lean journey has accomplished so far.
“Lauren has increased its top line revenue 50 percent while increasing its operating income 100 percent,” he said.
A major part of the lean manufacturing journey for some companies is gauged by customer feedback.
“Externally, we have a Voice of the Customer initiative to gain and then organize feedback,” says Smercina. “Internally, we put in a metrics-based system, designed to track production, reworks and efficiency. Any issues that arise are addressed within 48 hours.”
None of the companies DWM spoke to said they are finished with becoming lean—at least for now.
“The journey is what makes us better,” says Sheets.
“We’ve offered our expertise to suppliers to help them understand what we’re doing and to be sure that they’re on board. It is an ever-expanding role to drive that philosophy in our partnerships,” Irving adds.
Intek Plastics Inc., a company based in Hastings, Minn. that produces jambliners and supplies product to Windsor, has been working with MI Windows and Doors to improve its on-time delivery and order quality.
“Now we are looking at nice savings that can be shared between both of us,” Sheets says.
“They’re [the suppliers] all part of the mix,” says Shilling. “They’ve all been helpful with inventory management … and helping us streamline the process,” he says, adding that some suppliers have been better than others.
On the other hand, some manufacturers such as Lauren did not get a helping hand from their suppliers.
“Unfortunately, our suppliers did not help in our deeper understanding as we began our lean transformation,” says Huntsman, who adds that Lauren found companies to benchmark against to help the learning curve. “The company is now the benchmark for our suppliers and many customers,” she adds.
Huntsman says that change must be driven from the top down.
“If the president or CEO of the company is not committed or truly understands the value of a lean enterprise then the company will never get lean off the ground.”
She suggests researching and creating a lean deployment strategy fist.
“Lean cannot be viewed as the flavor of the month or try to be implemented from the middle or the bottom up,” she says.
Sheets agrees with the importance of staying the course.
“If they [company leaders] back down the first time there’s a hiccup, it’s a set back. You have to work on continuous projects, and events have to tie you back to the costs. You should say ‘wow’ and it should tangible and identified,” Sheets says. “It takes time and sometimes it might cost you some money,” he says, referring especially to the training costs. “The results six months to a year later are more than worth it. If you stick with it, you’ll get there.”
“No one said it would be easy … if it was there would be so many more companies using lean tools,” Huntsman adds.
The Lean Toolbox
Waste elimination. Waste in a process is any activity that does not result in moving the process closer to the final output or adding value to the final output.
Visual controls are a system of signs, information displays, layouts, material storage and handling tools, color-coding and mistake proofing devices. These controls follow the saying: “a place for everything and everything in its place.” The visual control system is designed to make product flow, operations standards, schedules and problems instantly identifiable to even casual observers.
5S is the Japanese concept for housekeeping: sort (seiri); straighten (seiton); shine (seiso); standardize (seiketsu); and sustain (shitsuke).
Six Sigma utilizes information and statistical analysis to measure and improve a company’s operational performance, practices and systems by identifying and preventing defects in manufacturing and service-related processes in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness.
Pull scheduling is the flow of resources in a production process by replacing only what has been consumed.
Value stream mapping is a paper and pencil tool that helps you to see and understand the flow of material and information as a product or service makes its way through the value stream. A value stream map takes into account not only the activity of the product, but the management and information systems that support the basic process.
Cell design is a manufacturing approach in which equipment and workstations are arranged to facilitate small-lot, continuous-flow production. In a manufacturing “cell,” all operations necessary to produce a component or subassembly are performed in close proximity, allowing for quick feedback between operators when quality problems and other issues arise. Workers in a manufacturing cell are typically cross-trained and can perform multiple tasks as needed.
Kaizen Blitz is the Japanese term for continuous improvement, taken from the words ‘Kai,’ which means continuous and ‘zen,’ meaning improvement. The Kaizen definition has been Americanized to mean “Continual Improvement.” A Kaizen Blitz is defined as a sudden overpowering effort to take something apart and put it back together in a better way. What is taken apart is usually a process, system, product or service.
Seven Types of Waste
Sarah Batcheler is an assistant editor for DWM.