Lean identifies changes companies need to make: Part 2 of 3

Here is a look at two companies as they begin the Lean effort. Each company had its own reasons for undertaking the effort, its own priorities and its own timetables.

Background: Two companies want to implement Lean. Their initial steps were based on their culture and their priorities. Company A, a cut flower grower, wanted to expand its business. The company needed to determine whether it could accomplish the expansion in its current facility or whether it would need to expand, requiring a substantial capital investment. Company A’s goal was to expand its sales without increasing its work force.

Company B, a nursery in the Midwest, wanted to sustain its current level of business, but was having difficulty maintaining adequate labor. The company’s goal was to reduce the number of employees while maintaining, and perhaps even increasing sales. However, Company B had not identified a specific project that would accomplish this goal.

Selecting the right team members

Company A, with its project already identified, started with a full day of training for key personnel. This group would become experienced in the first kaizen (continuous improvement) event and then be the champions for expanding future Lean activities.

Company B, not having identified a particular project but fully understanding the overall purpose of its effort, conducted mini-simulations for all employees over a two-day period.

Either approach works as a first step. There is no one-size-fits-all answer for every company when it comes to Lean. These efforts need to be tailored to each organization.

Once the initial training was complete, it was up to the companies to identify the team members who would make up the first kaizen group. Several characteristics to consider in selecting team members include individuals who are open minded to ideas, have a positive attitude and are willing to work with others. Avoid negative outlooks from dominant personalities.

How it works

The starting point. In any kaizen effort it’s important to establish the starting point. This gives team members a basis from which to measure improvement. The process of finding the starting point is also a good method to begin the team-building atmosphere.

At the onset of every kaizen I always have the group verbalize the project for the week, discuss the scope of the project and set the goals.

The project. While most organizations do a good job of top-down communication, it’s always a good idea to have group members verbally discuss what they are going to work on. For example, a project to improve productivity in the pulling operation can sometimes mean one thing to one part of the group (do it faster so shipping can be done earlier) than it does to another part of that same group (spend fewer labor hours per item pulled). This is usually not too difficult to resolve but needs to be done early on.

The scope. Understanding where the project begins and where it ends is sometimes a bit more difficult. For example, does reducing the time it takes to fill an order begin when the customer calls to place the order or when the business receives the order and starts to fill it? Defining boundaries will go a long way to making sure the team stays on target.

The goals. In a lot of cases, goals have been discussed either in the group or with a consultant ahead of time. Keep in mind that what is most important is having a few clear, well-defined goals. A company does not want a laundry list of everything it would like to happen. The group has a limited amount of time (usually three to four days) and a limited amount of resources (themselves) to examine the current state, develop improvement options, implement changes and then measure them.

Expected improvement

Having done the initial training and selected the teams, let’s continue to see how both companies approach the Lean effort.

Both Company A and Company B went through the process of identifying the starting point. They now know what improvement effort they will work on and how success will be determined.

In both cases the companies set a productivity improvement target of 40 percent. That might sound aggressive, but for companies just starting out it is about right. The target was driven by their perception of the current state and some timely prodding by their consultant.

For the first event of a company starting a Lean effort, I have had only one situation in which the group did not achieve at least a 40 percent improvement in productivity.

Lean tools

“Having the right tool for the job” is a phrase most of us have heard. It applies to both consumer and commercial situations, including kaizen events. While the goal of eliminating waste is consistent, the method of achieving that goal varies. Tools for examining labor in a potting barn will be different from tools used to improve customer service response. Knowing the correct tool for the project and applying it properly goes a long way to determining the team’s level of success.

For both companies the tool of Standard Work Analysis was selected. Each company is trying to understand how work is performed now so that it can consistently attain better results. Standard Work Analysis lets a company analyze the individual steps in the operation (the work sequence) and the positioning of materials, manpower and machinery necessary to do the job (the work area layout).

How a company analyzes the work sequence is fundamental to getting a handle on where it can effect positive change. There is also a need to have a reference point from which to evaluate customers’ demands. This reference point is known as Takt time.

Takt time. Of all the Lean tools, Takt time is perhaps the most misunderstood. The basic definition of Takt time is relatively simple: It is the pace at which a company needs to produce to satisfy a customer. Calculating Takt time is equally simple. It is the available time divided by demand. All too often, companies get caught up in the “every day is different” dilemma. They spend more time talking themselves out of setting a reference point rather than just setting one and seeing what it might tell them.

Every company has changing demands. The purpose of Takt time is to give a company a reference point with which to evaluate its staffing level. The calculation may need to be altered later to reflect the change in demand. Calculate the Takt time and go from there.

Work area layout is important because, in most cases, it (the positioning of materials, manpower and machinery) determines some if not most of the work sequence.

Gathering data

Once the tools have been explained and examples given to the team members, they need to gather data using those tools. That activity takes 1-1 1/2 days. Gathering, analyzing and using only data provides a solid fact-based platform to effect change.

Both of the case study companies completed their training and went directly to the kaizen project sites to begin gathering data.

The results

Company A completed its kaizen on its pull-and-pack process. Results included:

* 60 percent reduction in the number of people pulling orders for packing.

* 67 percent reduction in the number of packers.

* 33 percent reduction in the number of material handlers.

* Quality was improved because there were fewer moves and handling of product. These results would need to be measured over time. Not bad for a week’s work.

Company B attained these results:

* 25 percent reduction in crew size.

* 90 percent increase in crew output.

* Combining these changes resulted in an 150 percent improvement in productivity per worker. Equally as impressive.

The doubters

Many times when these results are shared with other audiences, there is a feeling by some that the companies must have really been in bad shape or they would not have made such dramatic improvements. In most cases, these companies are well-run operations under standard measures of effectiveness. Even well-run companies operate with a high level of waste that is difficult for those on the inside to see.

The real benefit of Lean implementation is that company employees begin to see things differently. This difference very often results in improvements of the magnitude experienced by these companies. If you examine your organization from a different vantage point, they might apply to you.

Lasting effects

Once a kaizen is completed, results are displayed and congratulations are offered, the real work begins. In the next installment I’ll let you know how the effort played out in the days, weeks and months after the event.

A kaizen takes places in days

Talk to anyone who has been part of a kaizen and they will tell you every event has its own personality, its own ebb and flow.

Day 1. The morning is usually one of apprehension (“What am I going to be asked to do?”), unfounded optimism (“Sure, we can achieve 40 percent improvement) and a bit of despair (“How are we going to do that?”).

By late afternoon, team members often experience doubt. The team understands the tools and how to use them, but now it has to carry the learning through and accomplish results.

Days 2 and 3. Day 2 is one of disbelief. Team members can’t believe how much work there is to do and begin to question what the data have revealed.

Late Day 2 and Day 3 can be the lowest points for a team. The members may begin to question the changes that need to be made and the immediacy of when they have to be made. They start to question what happens if the changes don’t work. These are the days during which changes are developed and implemented. The changes can be exciting, but they can also be intimidating.

Day 4. Day 4 is usually the most rewarding. Team members can’t believe how much work they accomplished in a week and the level of improvement achieved. If a company and team members understand that these stages are pretty typical, it will be easier to push on during a kaizen event.

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- Roger Fisher

Roger Fisher is president, R.S. Fisher Inc., (330) 650-4774; fr34@aol.com; www.rsfisherinc.com.