Lean Job Shop

The Lean Job
Shop
by Psquared
This version has been prepared exclusively for the AICC by PSquared.
All rights reserved PSquared.
Chapter 1
Why Lean, Why Now
CONTENTS
1. Why Lean, Why Now
2. A Brief History
Why Lean, Why Now?
Because you will make more money! Because you will make it easier to do things right! Because your
organization will be more structured and more adaptive! Because people will do what they are supposed to do,
even when you are not looking! That’s why you should be applying Lean principles in your organization.
3. The Tough Get Going
The process improvement principles known as Lean have been successfully applied in everything from culinary, to
health care, to logistics, and to farming industries (soup to nuts). And yes, there are many improving their bottom
line by applying these principles to printing and packaging industries. Sure, they were developed in Toyota’s
assembly line factories, but to dismiss them as lacking application on the basis of the industry of origin is
foolhardy.
In the last few years we have seen the consolidation on a historic scale. Yet, the companies that have weathered
the storms best are those for whom adaptation and improvement were already a way of life. Our team has been
privileged to lead, train, and implement improvement in many of these companies. We have spent most of our
time in the Folding Carton & Corrugated printing and packaging. We work with assembly lines, but our strength is
in application of Lean strategies to job shops. Our motto is Process Raised by the Power of People because we
know that people learn, lead, build, measure, and sustain processes.
This little book is a compilation of articles we have penned in the last several years to address the application of
Lean principles to the job shop. Many originally appeared in trade publications and have been updated and
edited to assist you in learning, leading, building, measuring, and sustaining Lean improvement in your company.
2
Japan's "King of Inventors" Sakichi Toyoda. The patent rights to one of his machines had
A Brief History !
been sold to Platt Brothers (UK) and provided the seed-money for the development and
What is Lean? Ask six people and you will get six answers; “It’s about shop floor
t e s t - b u i l d i n g o f To y o t a ' s fi r s t a u t o m o b i l e s .
organization, you know 5S” or “Measurement is the key”, “Overall Equipment
Effectiveness”. Another will site Six Sigma, Standardized Work, Total Quality
In 1950 the company experienced its one and only strike. Labor and management
Management, Total Productive Maintenance, or Value Stream Mapping. All of these
emerged from this stoppage firmly committed to the principles of mutual trust and
answers are partially correct because they mention tools that assist us in Lean
dependence, and that corporate philosophy still guides our growth today.
Manufacturing. It’s a bit like the Indian fable of the six blind men and the elephant. Each
described the animal based on the part of it anatomy he happened to have encountered
Production systems were improved in the late 1950s, culminating in the establishment of
first. They were all correct, but there was a bigger picture to be grasped. James Womack
the 'Toyota Production System.' It became known as TPS in 1970 but was established
provided the most succinct definition of Lean in his book The Machine That Changed the
much earlier by Taiichi Ohno. Based on the principles of Jidoka, Just-in-time and Kaizen,
World. He described Lean as “manufacturing without waste”. It has since been
the system is a major factor in the reduction of inventories and defects in the plants of
broadened the production of goods and services without waste. The term Lean
Toyota and its suppliers, and it underpins all our operations across the World.
Manufacturing can be misunderstood as a shop floor initiative without application to entire
Lean Enterprise.
Toyota launched its first small car (SA Model) in 1947. Production of vehicles outside
Japan began in 1959 at a small plant in Brazil, and continued with a growing network of
Recently there has been a great deal of discussion in industry on the subject of Lean
overseas plants. Toyota believes in localizing its operations to provide customers with the
production practices. The claims made by its proponents include reductions in lead times
products they need where they need them; this philosophy builds mutually beneficial long-
and inventories as well as increases in profits. So, is Lean a new and easy magic bullet for
term relationships with local suppliers and helps the company fulfill its commitments to
all that ails manufacturing? No, this is not a set-it-and-forget-it
infomercial cure all.
l o c a l l a b o r .
Gallery 1.1 Early Days of Toyota
First, Lean is not new. The principles and practices have been
Today, Toyota is the world's third largest manufacturer of
automobiles in unit sales and in net sales. It is by far the largest
developed over the past fifty years, primarily in the Toyota
Japanese automotive manufacturer, producing more than 5.5
Production System. Second, and more importantly, it is not
million vehicles per year, equivalent to one every six seconds.
easy. As with any other effective manufacturing practice these
In the time it has taken you to read this paragraph, we'll have
tools require persistence and accountability. For most it calls
produced at least another three or four cars!
for a fundamental change in the way we see and lead the
business, its processes, and the people systems that support
The Toyota Production System was inspired by the problem
them.
solving and mistake proofing approach of Sakichi Toyoda. A
mandate from ownership motivated Taiichi Ohno to compete
The following excerpts below are taken from Toyota’s website:
with Ford Motor Company using many of Henry Ford’s
The Toyota Motor Co. Ltd was first established in 1937 as a
principles, including some that were not applied in his own
spin-off from Toyoda Automatic Loom Works, one of the world's
Credit: gembapantarei.com
plants. However, the economic pain and supply shortages of
leading manufacturers of weaving machinery.
WW11 reconstruction required that productivity be
The Toyoda Automatic Loom Works was then headed by
accomplished without the excesses of mass production.
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Ideals of Lean
What is waste?
In the broadest sense Lean organizations aspire to five key ideals. They speak to the
Here we go from ideal to everyday practicality; Lean is all about reduction of waste (waste
importance of Value, The Value Stream, Flow, Pull, and Perfection. Aspects of these
of time, materials, creativity and other essential resources) along the value stream. The
ideals are active in all successful manufacturers. However, when taken together and
decision to make the transformation from Mass to Lean is really a declaration of war on
consistently applied they will challenge much of conventional manufacturing wisdom; and
waste. Every battle requires a different array of weapons. The tools listed above are some
bring greater profit.
of the weapons you may employ to lower costs.
In the ideal Lean enterprise all team members perceive Value as providing the customer
exactly what is needed when and where it is needed. This is true whether the customer is
the end user or the next machine process along the assembly line. The Value Stream is
Ideals of Lean
Receive Order
Value
Provide what the customer wants
Value Stream
Order to cash without waste of resources
Receive Payment
Draw a timeline from the point that you receive an order to the point at which you receive
payment. Every activity along that line either adds value or it is waste. It is not unusual to
Flow
Moves thru the system without constraint
see that an order or product is idle 90% of the time as it moves through a production
process. The leaders on the path to Lean have defined seven classifications of waste on
Pull
Produced at the speed of customer
demand
Perfection
Continual Improvement
the shop floor. Overproduction and rework immediately spring to mind, but consider
losses due to waste of Time, Conveyance (Moving items), Processing, Inventory, Motion,
Administration (Poor Information), Abuse of technology (Overuse), Creativity, and Space.
the line from order to cash. The goal is to eliminate any waste of resources along that line.
This allows information and materials to Flow through production without constraint or
congestion. The resulting flexibility and reliability of the system allows leadership to
reduce inventories and produce goods at the Pull, or demand, of the customer. Finally,
every team member in the Lean enterprise is dedicated to the pursuit of perfection. It is an
environment that fosters continual improvement.
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Gallery 1.2 Seven Forms of Production Waste
Gallery 1.3 Seven Forms of Administration Waste
Seven Wastes of Production
Seven Wastes of Administration
1. Transportation
1. Errors
2. Inventory
2. Delays
3. Motion
3. Duplication
4. Waiting
4. Unnecessary Movement
5. Over Production
5. Unclear Communication
6. Over Processing
6. Incorrect Inventory
7. Defects
7. Opportunity Lost
The war on waste is necessary if we are to lower our cost of manufacturing. Gone are the
Often overlooked is the considerable opportunity for waste reduction in the office. John
days of making a better product and demanding a higher price. With market changes and
Bicheno has classified seven categories of administrative waste. Any improvement will
international competition has come requirements for higher quality and added service to
speed the handoff to production, and delivery to the customer.
retain business at a set or even a decreasing price. Lean manufacturers increase their
margins by continually decreasing their costs.
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company well. They also ask “How do the Lean ideals translate from an assembly line to a
Benefits of Lean
job shop?” Again the answer is that they translate with great success as depicted in the
The company with the greatest Lean benefits is, of course the inventor of the Toyota
results reported below. These are companies only a few years into the Lean
Production System. The practices of the Lean Enterprise have been developed by Toyota
transformation making incremental progress.
over the past 45 years. They are emulated across industries because they continually
lower cost while increasing process reliability and product quality. In 2004 they increased
The Tough Get Going: Ten Ways to Prepare for Recovery
market share to redefine the Big Three automakers and reported earnings of 11 Billion
(Originally published in AICC Boxscore November/December 2008)
dollars. By comparison that translates to $2000 per vehicle, while GM made only $18 per
vehicle, and Ford lost $197 per vehicle. None of us are happy to see such an icon of US
Small business owners make things happen. It is contrary to the nature of the
manufacturing falter. We all will feel the effects of Ford’s multiple plant closings, and our
entrepreneur to watch and wait to see what happens. Many however are hunkering down
hearts go out to the families affected. Perhaps the pain of rebuilding is what inspired Ford,
during the current economic upheaval. Small businesses have the advantage of
as it did Toyota, to make the Lean transformation.
adaptability. Those that use that advantage enjoy a much better chance of survival in
times like these, and the ability to recover quickly when the economic environment
Use of the TPS outside Toyota began with suppliers and has spread to virtually every
improves.
industry. Thoughtful observers often ask; “how well do these principles apply outside the
Japanese culture”. Apparently they work very well as the most profitable Toyota facilities
The Small Business Administration defines most manufacturers as small if they employ
are outside Japan. The principles of mutual trust and dependence are still serving the
less than 501 people. Larger companies, and those who behave like them, will respond to
hard times by consolidating shifts, reducing headcount, and focusing on low price volume
North American Job Shop Lean Production Results
50%
Reduction in set-up time
40%
Reduction in Work in Process (WIP)
driven sales. While these may be done out of necessity, the entrepreneur will look for
opportunity to use these adverse conditions to advantage. Like a small running back in
the NFL they will use speed and agility to turn a limitation into an asset.
The first hurdle to overcome is the limitation in the leadership team’s mindset. Those left
standing have already acted upon what they must do to survive and should now be
planning what must be done to thrive. Get out of the conference room and take a walk
30%
Increase in Usable Space
with the other leaders. Look for advantages, look for opportunities to improve. It’s a
chance to interview employees and ask what policies or conditions make it difficult to do
their best work. This is not the walk of shame where you assign responsibility for current
20%
Increase in Machine Speed
conditions to scapegoats; it is a chance to see what you are tolerating; because you
cannot change what you are willing to tolerate.
30%
Increase in Machine Capacity
144%
Increase in Overall Machine Efficiency
30 point
Increase in Plant wide Overall Equipment Effectiveness
Leaders focused on preparing to thrive have taken that walk and are prioritizing and
managing projects to improve in many ways. Here are ten ways they are lowering current
costs and preparing to thrive when the economy improves:
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Audit. Analyze the data from management system software with assistance from the
Find and remove FISH (First In Still Here) inventory and stop paying commissions on
vendor as needed. Look at safety, housekeeping, and quality audits to identify obstacles
anything held past an agreed upon limit.
to safety and productivity. How effective are the audits? Does the data drive
improvement? Do not audit to appease a regulatory body, improve the audit to gather data
Institute Standard Work. Agree upon and build standard operating procedures for critical
that will guide the business.
functions. Reduce variability in employee practices that waste time and effort by creating
downtime duties that script and prioritize productive activities during unscheduled work
Attack Bottlenecks with Cross-Functional Groups. Recruit representatives of all the
stoppages.
process stakeholders, (including suppliers and customers) to eliminate or reduce obstacles
to the flow of information and materials at the speed of customer demand.
Purge Tooling and Inventory. Create and enforce a system of identifying aged inventory,
tools that have exceeded a set date or number of uses. Remove and/or replace the
Tighten Control of Incoming Materials. Calculate the amount of material needed to
tooling. Automatically generate a letter informing sales or customers that the tool is being
produce the jobs in the backlog plus a buffer stock based on the length of the supply chain.
purged. Where appropriate, use the purge notification as a sales opportunity to visit
Start with extra buffer and reduce it as confidence in the new levels improves. The goal is
wayward customers.
to make a plan for every part. This improves accuracy, use of space, and cash flow.
Organize for Success. Use the principles of 7S to make any administrative or production
Map the Order Entry Process. The timeline from sales order (design request or
work center more effective. Make it easy to keep clean, orderly, and safe. Make
estimate) to the production handoff is usually 3:1. Work with a cross functional team to
expectations and measures of productivity clear and visible. Remove obstacles and be
map the current state of this process. Then create a desired future state and an action
certain that the tools needed for the job are prepared and easily accessible.
plan to remove delays, extra steps, and redundancies.
The best measure of fitness is recovery time. Leaders that use the time afforded by
Practice Changeovers. As any team drills on fundamentals, crews should be assigned
current conditions to reduce operating costs and improve effectiveness will survive,
to practice changeovers. Video tape a changeover and watch game footage with the crew.
recover more quickly than competitors, and thrive in the next economic environment
Rethink the distribution of work as well as the readiness and availability of tools and
materials. Cutting order change time in half gives the obvious advantage in downtime
reduction, but will ultimately impact job cost estimates.
Cross-Training. While others are reducing headcount make employees more valuable
and adaptive through cross training. Create a matrix for essential duties and use those
trained in multiple processes to reduce overtime and the negative impact of vacations,
training, and absences. Consider a continuous run schedule even if shifts are
consolidated.
Reduce Finished Goods Inventory. Use the time to set more aggressive min/max
standards. Remove guesswork by using kanban (visual signals for reorder points) in the
warehouse and in software. Organize the warehouse using the principle of first in first out.
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Chapter 2
Learn It!
CONTENTS
Learning Lean
4. Learning Lean
(Originally published January 2004)
5. Lead Learner
What can a box maker learn from an auto manufacturer? One of the packaging industry’s students of Lean
Manufacturing recently went to answer this question at the source. Wayne Millage is GM of both Allpak Container
and Trojan Lithograph near Seattle. It was the rising costs associated with increasing complexity that motivated
Wayne to seek solutions at such an unlikely place as Toyota. His reaction, “It completely shattered my paradigm
of how work gets done”.
Production and service have become more and more complex in the companies Wayne leads. Allpak Container
began as a brown box plant and has evolved to produce flexographic printed packaging ranging from simple to
challenging styles. Capital investments continuously focus on new technology. The specialty products department
produces engineered foam packaging and operates an assembly team for complex, multi-component displays
and drop ship programs. Next door at Trojan Lithograph the relatively simple world of commercial offset printing
was first complicated in the 1980’s by entry into the folding carton market where they became a supply chain
partner for software and technology companies. In the nineties a single-face laminator was added to provide
packaging with offset graphics and corrugated strength for customers who require both. It’s getting complicated in
Wayne’s world.
To learn how to manage this complexity what better model could be found than one that coordinates the
production and assembly of a product requiring 5000 parts that change from order to order. The process is so
vast and intricate that the “yeah-buts” often inhibit acceptance of the principles. Yeah-buts happen when data
conflicts with our comfortable paradigms. Wayne and his team expressed a few; “Yeah but they are so big they
can control their supply chain”, “Yeah but they have a much more predictable order flow”, and “Yeah but they are
making the same product all the time”.
For all the apparent differences, the two industries face similar challenges. Both products are seen as
commodities. For example, cars are sold at a price point; a 50% better Celica is still a Celica and cannot be sold
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for a 50% increase. The customer’s requirements for service and variation increase while
60 seconds. All of this was accomplished with no more than four hours inventory on site.
global competition dictates that prices remain static. In fact, China’s aggressive entry into
OK, Wayne’s world isn’t that complex.
auto manufacture has Toyota hearing distant footsteps. So, if either packaging or auto
producers are to make a profit the cost of manufacturing must be decreased.
While General Motors was the landlord, the management of the facility and its suppliers is
accomplished through the Toyota Production System (TPS). A key component of the
Wayne and his production leadership team began their Lean journey with the
NUMMI Lean Transformation has been the cultural adjustment to include the core values
implementation of 5S, a tool developed at Toyota to organize the shop floor for increased
of teamwork, equity, involvement, mutual trust and respect, and safety. Evidence of this
productivity. The improvement of the production environment in both facilities has paid
can be seen in their mutually beneficial no-strike and no-layoff policies. Further proof of
dividends in safety, ease of cleaning, and faster change-over. But, the box makers want to
their commitment to these values is the reduction of over 40 job classifications to just two;
speed up their Lean Transformation. The first order of business is to lower their own
production and maintenance.
operational costs. But Wayne sees beyond this to a deeper partnership with customers.
“We have a responsibility to our customers to help them identify opportunities, increase
The power of corporate culture is evidenced in the fact that this GM plant adopted the TPS
sales, and reduce costs”. His perspective is that the companies that thrive in the coming
whole-heartedly, while the balance of the GM culture refused it. This cautionary tale was
years will adopt Lean business practices, not only in production but throughout the
told well by NPR when GM failure forced a break in the partnership with Toyota, and the
organization. To accelerate their progress they knew they needed to see the principles of
closure of the NUMMI plant in 2010.
Lean at work in a complex and cost driven company like Toyota.
The Toyota Production System has evolved over several decades for the purpose of
reducing the cost of manufacturing through the elimination of waste. James Womack,
author of The Machine That Changed the World, described Lean Manufacturing in its
ultimate form as “Manufacturing without waste”. Many metrics and tools have been
gathered under the umbrella of Lean to seek out and reduce the effects of waste. Lean
thinkers target eleven classifications of waste that occur between receiving an order and
getting paid (insert figure 1, 11 classifications). By April of 2003 Toyota had done this so
successfully that they reported Twelve Billion dollars in earnings, while the big three
struggled, and lost market share. Unimpressed by their own gains the president of Toyota
put out an edict that all manufacturing facilities must seek to reduce their costs by 50%.
No one in the auto industry is laughing.
Convinced that he had found the model he needed, Wayne traveled with his production
leaders to visit the NUMMI facility in Fremont, California. New United Motors
Manufacturing Incorporated was a cooperative venture of General Motors Corporation and
Toyota Motor Corporation. The company’s 5,500 employees produced the Toyota Corolla
and the Pontiac Vibe on one line, and the Toyota Tacoma on another. In 2002 NUMMI
began manufacturing a right-hand drive Toyota, Voltz for the Japanese market. All
That story may be heard at http://www.thisamericanlife.org/radio-archives/episode/403/
nummi. The plant is now a cooperative effort between Toyota and Tesla motors.
The box makers toured NUMMI and a small supplier located a block away. “NUMMI was a
beehive of activity”, said Wayne, “Everyone was moving very purposefully, if some process
should fail it was very apparent that action was forthcoming. In our plants we have great
people but our systems need improvement. We accept delays as normal; when the supply
of materials or information fails we rely on someone filling out a non-compliance form to
shed light on the problem. At NUMMI you know about problems as they happen”.
Dave Miller, Allpak’s plant manager, is seeking ways to implement the transparency of data
he witnessed on the tours. A hockey style scoreboard known as an Andon board displays
real-time production data. As Dave’s focus alternated between the board and the workers
he said, “They have taken a very complex process and broken it down into small tasks.
They continually simplify; we need more of that. All of these team members can see how
they are performing relative to goals”. On the supplier tour Dave was impressed with the
display that showed NUMMI’s inventory levels as green, amber, and red. He noted an
amber number on the board and asked what would happen if it turned red. The suppliers
reply, “Then this tour would be over.”
vehicles were made to fulfill an order. A car was produced every 55 seconds, a truck every
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One common take-away was a new appreciation for the money to be made through
inventory reduction. “We would like to run only what the customer is going to use, when
they are going to use it. To do this we will need to reduce our set-up times. If that were
Lead Learner
(Originally published Boxscore Sept/Oct 2010)
our standard practice we could eliminate the warehouse” said Dave. This would also
The 1700 lb. bull I had been ‘leading’ to the corral knocked me aside and penned me to
require a change in the method of scheduling. Gary Vetsch, Trojan Lithograph’s
the side of the chute. My grandfather stepped in and whacked the stubborn animal in the
production manager, wants people to stay at their machines and have materials delivered
forehead; “first you have to get his attention”, he said. Now, as stubborn as any of us may
on a “to the minute schedule”. Once he has the inventory down he will move to step two.
be the economy of the last couple of years has given us all a few whacks, and created
He plans, “a pull system where consumption of material is the trigger, and material flows
teachable moments. The lessons applied can change the course of your life and of the
through the plant from the schedule at the shipping dock”.
team you lead.
The TPS is an orchestration of standardized work and problem prevention practices. The
We resist being teachable for a variety of reasons. Learning is hard work, its risky, and
box makers all noted NUMMI’s commitment to continuous improvement. Wayne was
gets us out of our comfort zone. The motivation to resist learning can be noble; “The
challenged by the requirement that team members ask for help immediately; “Ours is a fix
needs of the business take all my time in solving problems for customers’. It can be
it system, figure it out on your own and you will be better for it the next time. Toyota’s
complacent; “we make a profit, why risk the changes?” They can be downright arrogant as
system is based on getting help as soon as a step takes extra time or a part is missing.
is the case with some who believe their leadership position provides an exemption. No
They stop the line and come up with a solution that will prevent the problem from
matter how righteous the excuse the results will be the same for those who fail to adapt.
reoccurring”. Driven by goals to reduce costs and increase flexibility, the box makers are
Deming put it well when he said, “It is not necessary to change, survival is not mandatory.”
applying tools like Visual Workplace, Value Stream Mapping, and Quick Change-Over.
The tours provided a model of possibilities and practicalities of Lean Manufacturing. The
While education is important for all members of the team it is only an academic exercise if
most lasting impression, however, may be of attitude. When the line stops at NUMMI
the leader of the team fails as lead learner. We have had the privilege of coaching,
music plays. Conventional wisdom dictates that sirens would declare the emergency. The
training, and implementing best practices in hundreds of companies. The single most
wisdom of TPS is reflected in the music, and in the attitude of the team member who said
important factor that determines success is the leader’s willingness to learn and grow. We
“We stop the line five thousand times a year, and every time we restart, we make it
have seen many companies put double-digit improvement on the bottom line year after
stronger”.
year while better-equipped companies in better markets struggle. The difference is most
often a learning leader.
What the lead learners have in common is the determination to lead learning companies;
where they anticipate and respond with flexibility to market changes. Where there is
structure to consistently improve products and services; and to be the employer of choice.
Peter Senge called it the Learning Organization where the leaders are diligent about telling
themselves the truth and surrounding themselves with those who will do the same.
Recently Jim Collins wrote about the arrogance that is characteristic of companies that
enter the death spiral in his book “How the Mighty Fall”.
We have witnessed the success of a diverse group of lead learners. Their teachable
moment may have come with pain, fear, or previous failure, but they determined to learn
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through it and make the lessons learned into daily practice. They are committed to serving
their employees, customers, and stakeholders by removing the obstacles to success. It is
often said that a person should take the log out of his or her own eye before attempting to
remove a speck from the eye of another. It is in the spirit of this interpersonal
ophthalmology that leaders first work on themselves to remove the obstacles under
immediate control. The common traits they share as a result of these learnings include
humility, self-management, personal accountability, and prevention focus.
Humility
Lead learners are committed to discovering what they are best at. They don’t try to be
Accountability
It’s lonely at the top. Many have learned that it is better to be lonely than to bring the
wrong people into their confidence. When everyone in the building reports to you it can be
difficult to find unbiased assistance in decision-making regarding policy and strategy. Lead
learners seek out accountability for the same reason they hire accountants and attorneys.
They are not renting friends; they are investing in expertise that will make their business
stronger. This can be accomplished through a corporate board, an advisory board, or a
coach. These exemplary leaders learn to be candid regarding personal leadership
development goals as well as more traditional performance measures. They set clear
milestones for progress and they invite trusted advisors to hold them accountable.
irreplaceable. They learn to spend there time doing what can best be done with only their
experience, talents, and passion. They draw others around them whose skills are best
suited to the balance of the work, and they spend the time to equip them so that they can
be trusted to do it well. They do what they were born to do, and they replace themselves
every day.
Self-Management
Lead learners are disciplined about making and keeping promises. To build that kind of
trust and keep it over the long haul they learn to manage their priorities, their
commitments, and their key relationships. Two disciplines are essential to these leaders.
Prevention Focus
Smokey the Bear is not an action hero. There are other guys who jump out of planes and
fight the fires; Smokey’s all about prevention. While there is no glory in cost or safety loss
prevention the lead learner knows that it is the best place to focus effort. Solving the same
problem on Thursday that you solved on Monday is unacceptable.
These leaders have learned the steps of prevention:
1. Involve everyone in identifying problems;
2. Fix the immediate problem and meet the customers need;
First, they consistently use a time management tracking system that goes beyond to do
lists and appointment schedules to goals and priorities. They work to invest an ever
3. Involve the experts from across the organization in investigation of the root cause;
increasing percentage of their time in working on the business rather than working
4. Eliminate or reduce the root cause;
exclusively in the business.
5. Follow up and be certain it worked.
Second, they learn to manage their own emotions. The leadership role requires both
They have also found that once the system of prevention is in place they do not need to
technical and interpersonal skill. Emotional intelligence (or EQ) is the essential leadership
marshal most problems. They do require that all problems and prevention steps be
ability to recognize and respond appropriately to emotion in oneself and in others. Neither
documented in the form of policy, standard operating procedures, or work instructions, so
EQ or time management is a natural gift; they are skills that require practice. For leaders
that the number of repeat problems is continually reduced.
mastery in self-management is required and to accomplish this accountability will be
necessary.
Learning to lead in practices of humility, self-management, accountability, and prevention
is both painful and rewarding. The lifelong learners who have been successful in
developing this type of character are contagious. They inspire us to work daily to replace
ourselves in problem solving and decision making roles so we will have more time. Time
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to improve the systems and equip people for improved productivity and profit. Time to plan
the company’s future. Time to serve the company through the best use of our talents,
experience, and passion. Time to do what we were born to do.
12
Chapter 3
Lead It!
CONTENTS
Lean Leadership
6. Lean Leadership
(Originally published Boxscore Volume XVIII. No.2. March - April 2004)
7. Why Can’t I Just Yell?
Am I a bottleneck? Do I employ any? Are my policies and procedures creating or removing constraints? How can I
make it easier to do things right? These are the hard questions asked by the leaders of Lean organizations. They
have learned that machines don't serve customers, people serve customers. Lean has required that they rethink
the way they lead their organizations. Those who focus only on machines realize small and short-lived results.
The Lean leader's job description is to remove bottlenecks in production processes and the people systems that
support them. The result is an ever lower cost of manufacturing.
The core of the Lean enterprise is the ability to provide what the customer needs at the speed of demand without
waste of time, material, or human capital. This requires constant change in the pursuit of improvement. The
inherent predicament is that each change causes ripples which affect both people and process. In the case of the
flow of materials along a value stream, when one constraint is relieved another will naturally be created
downstream. The same is true in people systems, but the constraints are less predictable.
Think of each change as a pebble in the stream of the organization; the affects radiate out rather than just
following the flow materials along the machine processes. The ripples affect people throughout the facility with
changes to staffing, promotions, scheduling, training, recognition, and rewards. A Lean Leader anticipates these
changes and uses them to the advantage of both people and process.
As an example compare two recent machine installations in similar converters on opposite coasts. The same
model machine was added to the flow in both cases, the same installer, and same production trainers. Also
common to both was the decision by leadership to use the installation as an opportunity to radically improve
production practices. So, why is company A enjoying increased flexibility due to faster run speeds and shorter
changeovers while company B struggles to match the productivity of their old machine' The difference is
leadership.
13
The leaders of company B had the best of intentions, but they rushed their training and
relied on the new process to inspire new behavior in the crews. Consequently their much
faster machine often runs at half speed so that the crew may avoid cleaning or
Why Can’t I just Yell?
The Supervision Challenge (originally published Boxscore March/April 2010)
reassignment. All concerned are frustrated. Although the installation schedule was
For most of my life I have been watching and learning from supervisors. As a young boy I
originally a week shorter than that of company A the recovery time will be lengthy and
observed sixties style supervision in the plant run by my father. In the 70’s I learned from
expensive.
the variety of supervisors for whom I worked in lumber mills, factories, and construction
Company A's leadership team asked the hard questions and took the time to ensure that
the change in hardware would be a catalyst for cultural improvement. "What will motivate
people to help us meet our productivity goals" and "What might motivate them to resist the
improvement effort?" They sought out and eliminated bottlenecks in decision-making,
accountability, rewards, and timely information for the crews. They involved the crews in
preparation of the machine center as a visual workplace. The crews were also involved in
the customization of standard operating procedures for cleaning and maintenance. The
crew took ownership of the SOP's because they signed off as authors, and new operators
train by auditing those procedures. In short, they continually work to remove any constraint
to the production team's success.
The Toyota Production System (TPS), which tested most of the Lean practices in use
today, is often referred to as a toolbox for cost reduction. Consequently most focus on the
tools as the power in Lean production. The power of those tools is only realized in the
hands of a motivated team. The TPS relies on a team environment with clear pathways for
communication and decision making. They have learned to transfer ownership to those
who do the work so that everyone may share the responsibilities and rewards of
improvement. Lean leaders relieve bottlenecks in machine process and people systems
for sustained profitability.
Leadership Questions to Ensure Success ...
sites. By the late 80’s had received clear and lasting guidance regarding the priority of
production. In response to some esoteric point I had made, (which I am certain was
brilliant, but I can’t seem to remember), the pragmatic supervisor said “Let me explain this
to you college boy; there’s makin boxes and there’s not makin boxes. Not makin boxes is
bad”. Like you, I’ve noticed changes in the generations of workers that have followed. We
are led to believe that the generations, from Boomers to GenZ, are motivated differently.
Let me suggest that the characteristics of great leadership have not changed. Certainly
the expectations of leaders have progressively raised and earlier generations had thicker
skin. True leaders have always provided the tools, training, and direction to help people
get the job done.
Today supervisors know that expectations have changed. Most however are ill equipped.
A skilled machine operator is promoted and thrown into the role of supervisor without the
benefit of further training. The scope of the job increases from one to all machines. More
stressful than that is the responsibility of managing people, some of them friends and soon
to be former friends. The job may include: safety, workplace organization & housekeeping,
waste tracking & reduction, productivity, quality, staffing, training, and performance
evaluation. So, it was not surprising when a Production Management workshop attendee
said, “I miss the days when we could just yell at people. I’m just frustrated, but really; how
do you get people to do the right thing when you are not looking?”
From the perspective of senior management the job is even bigger. Over the past few
• Results; What will success look like?
years as we’ve led, trained, and coached companies through tough transitions it has
• Guidelines; What principles and procedures will be our guardrails?
become clear to the P2 team that the role of the supervisor is morphing. Leaders want
• Accountability; How will we measure our success and ensure consistency over time?
• Resources; How much capital, time, staffing, and realignment of policy will be
necessary?
• Rewards; What are the benefits of success for all the team members involved?
their supervisors to get the big picture and manage their portion of the business as a
business. They are expected to become Value Stream Managers with responsibility for
the flow of materials and information at the speed of customer demand. If this is to be
accomplished we must be much more intentional about the training and coaching of
supervisors. This will require far more than a Production Management workshop, a
14
Your Job is To Remove Obstacles
In yourself: (don’t be a bottleneck)
1
Gain credibility and respect
2
Lead by example
3
Communicate clearly
4
Relentlessly improve;
You cannot change what you are willing to tolerate
5
Manage your own time well
6
Embrace change and anticipate crisis;
Entropy is unrelenting
7
be a life long learner, always open to coaching
In the workplace
another way; “Are you staffed to produce or are you staffed to improve?” Second, does the
job look like that of a problem solver or a problem preventer? Third, do your verbal
directives match the non-verbal ones? If we say that safety, quality, and productivity are of
equal importance and then behave as if hot jobs trump all else then we train supervisors to
ignore all else.
Once you have your list you will want to sit down with your supervisors to make the
expectations clear. It will also be important to assess the gap between the supervisors
current skill and performance and the expectations you have outlined. With the objective
defined and stated openly you will find it much easier to prioritize and set goals for
development in this key employee. You will do well to point out any failure paths you want
the supervisor to avoid, as well as outlining the resources available, the milestones that
will define progress, and the time allotted to achieve these levels of improvement.
Below (figure 1; the inset) shows one such list of supervisor expectations. It is very clear
that the supervisor is expected to manage the effect she or he has on the workplace as
well as the flow of information and materials. The list can be daunting but is encompassed
1
Evaluate and train people for success
2
Organize materials and information
3
Develop work methods
4
Manage the work methods
5
Develop goals; people need to know how they are doing
6
Measure performance, Discipline and Recognize
7
Continuous improvement, problem solving and prevention
in the first statement: remove obstacles. Recently we met in Dallas with 25 production
leaders of diverse experience to learn more about this important role. Each expressed the
constant frustration of trying to do well in all aspects of the job; both the process part and
the people part. After a couple of days of principles, tools, and best practices; each
personal to do list was full. Each of us chose one thing to attack, to measure, and be
accountable for. It was a good start, but only the first in a long list of projects on the road
to becoming a leader.
The leadership role is summed up as removing obstacles. I began learning this from my
friend Fred. I was still in school and I’d go out to do some work for him or just to engage in
the favorite farmer pastime; solving the world’s problems. On one of these occasions I
conversation about leadership expectations, or an afternoon reading the employee
found Fred on his tractor out on the edge of the corn field. I noticed that his corn was so
handbook. It will require ongoing commitment from leadership to provide tools, training,
uniform in height that it looked like a tabletop. Every stalk seemed to have multiple ears of
coaching, and back-up.
healthy corn. My own sparse crop seemed to be doing the wave and was rife with an
unpalatable blue fungus. I asked Fred how he grew his corn so healthy and plentiful. “I
To equip your supervisors to meet the challenges of managing today you may begin by
don’t grow corn”, was his puzzling reply. “Fred”, I asked,” is this your field?” “Yep”, and
clarifying your expectations. Spend the time to outline all the tasks and priorities of the
then he endured a barrage of further questioning. Finally he had mercy and offered, “I
job. Now, step back and ask yourself three questions. First, is the job as outlined
don’t grow corn, I just take away all its excuses for not growing.”
achievable with the people and time allotted? Leslie Pickering often asks the question
15
The challenging job of supervisor is very like the job of the farmer. Any obstacle to healthy
growth that can be controlled must be controlled. Unfortunately, all things cannot be
controlled including people who refuse to thrive in ideal conditions. The majority of the
team will be motivated by this type of leader to do the right thing, whether or not the
supervisor is looking.
16
Chapter 4
Build It!
CONTENTS
The Visual Workplace: Seeing is Believing
8. Visual Workplace, Seeing is Believing
(Originally published Paperboard Packaging Feb 2004)
9. Blueprint for a Perfect Installation
The first step toward Lean is the creation of a Visual Workplace where order rules and non-verbal signals and
limits make it easy to do things right. The transition to a Lean production environment requires the reduction of
10.Lean for the Office
11.Value Stream Mapping
any activity that does not add value in the eyes of the customer to the product or service. In short, it is a war on
waste.
The crews stand on the front lines in the war on waste. If they are to believe in their ability to reduce waste then
they must see Leadership’s commitment to improvement. The construction of a Visual Workplace demonstrates
that commitment and seriously diminishes crew skepticism. It is a physical display of leadership because it
removes many of the obstacles to doing things correctly.
To fully grasp the value of the Visual Workplace put down this book and take a walk. Visit the machine center that
produces the highest return per unit. From a vantage point that offers a view of the entire machine center observe
the flow of materials, information, and tooling. Watch the movement of the team members. Consider the gains
that would be made if change-over times were increased by 25%. Think about increasing the company’s ability to
attract and retain quality people, and to train new and temporary workers. Then resist the temptation to crack the
whip: it may bring temporary satisfaction but the gains in speed will disappear as soon as you do. Better to build
a system that makes it easy to do things right, and difficult to do things wrong.
There are many tools in the Lean toolbox for the construction of the Visual Workplace. Most of them have
confusing and foreign names. A partial list includes 5S, 7S, 4P, Kanban, FIFO, and Andon. This is likely due to the
fact that consultants believe they will get paid more for initials and foreign names than they will for assisting
manufacturers in “getting organized” or “Getting it right the first time”.
The cryptic words and initials represent helpful principles which may be applied, once they are understood, under
more common sense names. The extensive application of the principles to manufacturing may be novel but they
17
are by no means new. Remember Kindergarten? Though most students enter it under-
It is imperative that care be taken during this step to involve all the people that share a
socialized and illiterate they are able to work, play, and learn in order, comfort and safety.
work area in the placement of tools and materials. If the goal is spring cleaning or
In each area it is obvious what activity is to be done, how it is to be done, and where tools
preparation for an important customer visit than by all mean just set the standard and tell
are to be stored when the task is complete. In manufacturing the workers are more
people where to put things. However, if the goal is to uphold the practices when no one is
sophisticated and the work is more complex, but the principles apply equally.
looking, and to be prepared to a plant tour without notice, then the people who must
uphold the practices must take part in their design.
Organizing for Success
The concepts behind 5S were developed by the authors of the Toyota
Production System to improve the organization of the workplace. The
Japanese words for Organization, Neatness, Cleaning,
Standardization, and Discipline have been Americanized by the
publisher Productivity Press to read Sort, Set in Order, Shine,
Standardize, and Sustain. Recently, Toyota has added two
more; Spirit and Safety.
7S is really just a set of standards that all coworkers agree to
The placement of a pallet is an example of a simple change that will be best
adopted if temporary materials are used until all of the people who
share the work area agree that the proposed change is for the better.
Let us suppose that in the current way of working the pallet is
placed in a general area next to the work station. The team
decides that it would save steps if the pallet was placed in a
particular spot designated with yellow tape on the floor. They
try it out, and find that minor adjustment is required to
accommodate maintenance access or ease of material
uphold so that the workplace will be organized for success.
handling. In short order they agree on the best location. The
The 7Ss are three ongoing activities, two agreements made by
difference that comes as a result of this practice is that those
all participants, and two results.
who participated in making the policy will enforce it. Lasting
improvement can only be achieved at the speed of good
Three Activities
First the crew and their supporters from management, maintenance,
quality, and other departments Sort through the tools and supplies to make
sure that all unneeded items are removed. The workers from other areas assist in the
physical labor and bring a new perspective as they ask questions. They ask, “Do we need
this here?”, and they challenge crew members to break with old habits. They push hard
communication.
There is value in the organization of materials in the warehouse and
between processes machines by use of the FIFO (First in First Out) system.
This reduces time spent looking for product, damage incurred in multiple handling, and the
losses due to aged inventory. When product is sequentially loaded between machine
processes sorting is reduced when defects are identified.
knowing that the crew members will return the favor when 7S comes to their work areas
The third activity is to Shine, the work area. This step involves cleaning and inspecting the
Second, the team begins to Set in Order each part of the work environment so that
hassles and wasted effort are eliminated. Most of the improvements made during this
stage are low cost. Even those that do involve some investment will quickly pay for
themselves as time and steps spent retrieving tools and materials are eliminated. More
benefit will be gained when set up and change over times are reduced. Examples of these
improvements include shadowed tool boards with color coding for the machine center,
area on a regular basis. For the initial Shine session the scheduled preventative
maintenance is extended to allow for deep cleaning and inspection of the machine. Return
of the process to its original capability exhibits management commitment and helps the
crew to take pride in the machine’s appearance and condition. Crews learn to clean to
inspect and prevent downtime. The machine stays cleaner and small problems are
noticed before they grow into big ones.
carts for cleaning supplies, limit lines for inventory, and locations for everything.
18
Two Agreements!
By the fourth step, Standardize, the participants have seen the effectiveness of the
temporary measures and they are ready to adopt them as policy. They will pull up the tape
and replace it with paint. The participants agree to uphold standards for order, cleaning,
and regular inspection of work areas. This is a great opportunity to upgrade Standard
Operating Procedures to include many pictures. Visual reminders of best practices and
checklists for cleaning and maintenance are adopted with relative ease at this point.
The 4Ps is standard developed by Englishman Leslie Pickering which requires that only
Spirit is another way of saying morale. By working through the activities and agreements
of 7S many of the communication barriers between shifts and departments are broken
down. The crews experience a new level of ownership for their machines and
responsibility to the customers they serve. They feel more like a team, they take more
pride in the workplace, and they find it easier to communicate and work together.
As people communicate and behave as a team it is no accident that Safety improves.
They begin to watch out for each other. They have removed the clutter with its trip hazards
and poor sight lines that complicate in the workplace.
People, Pallets, Pivots (British for wheels), and Posts touch the floor. The system includes
painting and placement protocols for improved visual communication, reduced clutter,
easier cleaning, and improved safety.
Gallery 1.4 Visual Workplace Example in the Print-room
Another tool in the Visual Workplace toolbox that is easily implemented during this stage is
the Kanban. This is a fancy name for a visual signal, like a card, bin, or pallet that
indicates a need for supply. For example, an empty green pallet may signal; “make a
pallet of product x”. Thus the need for scheduling the upstream machine is eliminated.
Sustain is the most difficult of the steps. It requires commitment on the part of
management to make the changes a permanent part of doing business. Initiatives that fall
short on this stage of accountability and dedication are dubbed “half S” by the crews and
written off as yet another flavor of the month program. It is important to work accountability
activities such as audits of SOPs, 7S inspection, and increased recognition into the
existing fabric of the organization. The addition of red tape should be avoided. Sustain
activities equip the team members to keep the improvement going. It’s a commitment to
what the Japanese call Kaizen, the environment of continual improvement.
Any tool that allows team members, suppliers, or even customers to see how well the
process is performing will sustain improvement. One such tool is the Andon board which
visually displays meaningful real-time production data to the people that need it.
Two Results
1C1J (1Cart 1Job) staging of materials with Job Sequence Board clearly
showing from a far has the cart all it needs for production needs.
19
Productivity, morale, and safety increase as people focus process improvement. They
learn to shift the focus from product defects to building a better process. The Visual
Blueprint for a Machine Installation
(Originally published in Paperboard Packaging Vol. 88, #7)
workplace assists all team members in attaining a new perspective of the manufacturing.
Even skeptics begin to see the process and to believe that they can improve it. In the
Imagine that you are the owner of a brand new NASCAR automobile that has been
visual workplace seeing really is believing.
equipped with every high tech advantage the rules will allow. Your driver is excellent and
your crew is among the best. Your passion for speed and competition has pushed you
Gallery 1.5 Visual Workplace Example at a DieCutter
beyond the comfort zone of you budget. You are anxious to start racing, start winning, and
start recouping your investment. All those costly high tech gismos have delayed your cars
arrival and you are faced with a dilemma; should you take delivery on race day and rely
on technology to win the day or should you give the team the time to become familiar with
the car, even if it means racing on a later date? It is easy to answer the question logically,
but a tough decision to make on race day.
This is the dilemma faced each time a machine is installed. More often than not, the day
the machine is operational it is scheduled to provide a key customer with a critical order.
The usual result will include a heroic effort by the crew, a strained customer relationship,
and a headache for the CEO. The following pages depict a blueprint for an ideal
installation. The machine used in our example will be a Rotary Die Cutter. Though the
upfront investment of time and effort may appear excessive they will pay dividends in
crises prevented, machine health & speed, and crew effectiveness.
The three keys to the ideal installation are prepare, prepare, and prepare.
First, prepare and manage the expectations of all of the stakeholders involved.
Second, prepare the environment around the machine to reflect the best practices you
1C1J (1 Cart 1 Job) sequencing the cutting tools at the die-cutter
eliminates the need for a production schedule at the process
desire to spread across your organization.
Third, prepare the people to operate and improve the machine and the processes that
support it.
Many of the changes that effect your organization are beyond your control. The stresses
they produce can be seen in low productivity and high turnover, along with resistance to
new ideas and anything else that sounds risky. By contrast, the ideal installation is
marked by enthusiasm, involvement, and openness to innovation. The installation is a
change that you can, and should, control for the benefit of your people and processes.
20
Before the Purchase – Prepare Expectations!
When the business strategy requires a change in machinery the most important
expectation to be managed is your own. As in the race car analogy, the logic is simple but
objectivity is near impossible. Listen to all the stakeholders involved; from supplier, to
production leadership, to your customer. You may choose to check your objectivity by
running your ideas by an objective outsider such as a CEO of a similar business with
whom you do not compete. Explore your alternatives by listening to those who have
purchased a similar machine. Visit at least two. If possible photograph or video the
The addition of new technology may require rigid specifications for cutting dies, print
plates, mounting systems, and inks. Source the best supplier for cutting dies on the new
machine. The process will be served by the purchase of new cutting dies for three largest
product runs prior to machine startup. Investigate the use of new print plate technology for
high graphics or process jobs. Take advantage of the latest tooling technology. Placing
old technology on new equipment will compromise both machine and people performance.
Prepare the Environment
machine visits. Careful interviewing will help you to avoid problems in your installation. Ask
Two Months to Installation
how it was to work with the equipment manufacturer, who did the installation, how the
An installation brings with it an opportunity to install upgrades to the production
training was, and what went well. Most importantly, learn from their experience by asking;
environment as well as the machinery. To perform optimally the new machine should be
“Knowing what you know now, what would you do differently”. The answers you receive
placed in an environment where the flow of information, materials, and people is more like
from the CEO, the production manager, the crew, and the maintenance staff will serve you
ballet and less like hockey. The first step toward choreographing that flow is the transition
well as you plan your installation. You will come away with a much better idea of the time
to a visual workplace. The traditional environment is cluttered with tools and materials that
and resources you will need to plan for.
are unnecessary to the process. The visual workplace has everything needed to do the
job. It is clean and easy to keep that way. Instructions, tools, and supplies are clearly
One final note on objectivity; ask these questions before investing in a machine. Although
marked so that it is easier to do the job right the first time. The process of creating a visual
some of us have more practice than others, none of us enjoys looking stupid. So, we will
workplace has been called 5S, 7S, and Industrial Housekeeping, by the authors of the
resist negative information about a product in which we have already invested.
Toyota Production System. Whatever you call it, installation is a perfect time to get
organized for success.
After the Purchase
When you order the machine and schedule the installation be certain to make use of the
knowledge you gained in your earlier reconnaissance visits. Request the installers and
trainers about whom you had good reports. These will be very influential people who will
lead an important and expensive few weeks in the life of your organization.
Installation is the best time to set the standard for the way you wish your production floor
to look and perform. The site of the installation may serve as a template for the standard of
organization you desire. Improvement ideas may be piloted and later shared across the
facility.
The New Machine Team may assemble at this point to gather best practices,
wherever they may be found. Start with a footprint of the new machine. Tell the group to
Once your own expectations are under control it is time to prepare those of your people.
forget where the tools, supplies, materials, and information were on the old machine. Now
This may be done by gathering the stakeholders (including the OEM and suppliers) to
ask them to brainstorm about placement of the items for optimum safety, convenience, and
inform them, to set goals, and to gather their requirements. If the machine is to be running
productivity. Operators, maintenance, and material handling personnel should be
well by the target date than each group represented in the meeting will need to identify key
represented in this session. Sketch a To Be Map, a preliminary drawing of the future
information or materials necessary to accomplish the task. Capture this information to be
placement of items as discussed by the team.
shared with the group. Because timing will be critical, a time line on the whiteboard may
be helpful. It is a simple tool that will aid the stakeholders in seeing the importance of
timing, and the interrelatedness of the tasks. This group will be your New Machine Team,
utilizing the suppliers and the OEM as needed.
Next send the team out to gather best practices. They will go the plant floor, to suppliers,
to OEM mechanics, and they may call contacts in other industries. Send a few
representatives out to exemplary plants, and those that have installed similar equipment.
21
They can find out what is working, and answer the key question you asked earlier;
There will be a great deal of training during the installation and some will suffer from
“Knowing what you know now, what would you do differently”. A wise man noted that we
information overload so now is the time to complete training on safety and visual
should learn from other’s mistakes because none of us lives long enough to make them all
workplace.
ourselves.
Review the timeline with the group. Display it publicly and solicit feedback and questions.
Once the best practice ideas have been gathered and distilled into a well planned To Be
This will keep people informed and head off misinformation. Your organization can only
Map, the area can begin to be prepared for the new machine. Involving key operators and
improve at the speed of good communication.
maintenance personnel in the transformation of the area will help to transfer ownership of
the new practices to the crews.
Installation & Training
Weeks One and Two
Ideally the area will be empty so that the entire space may be cleaned and/or painted.
Whether it is being painted to conform to the plant’s existing protocol, or a new protocol is
being piloted, the job will be easier before the machine arrives. Consider painting under
the machine to increase reflected light and ease of cleaning. Paint the approved locations
of pallets, carts, trash cans etc. Identify the flow of materials to and from the machine and
plan locations for dunnage, supplies, carts, anilox roll storage etc. Design a roll cleaning
unit for off line cleaning of rolls. Consider painting the ink pit white; this will encourage the
operators to clean it more frequently.
Computer cabling, air, water, power, and lighting services are more easily installed at this
point. Investigate the use of incidental lighting to be used when the machine is open.
Convenient and accurate placement of the lighting will encourage consistency of
performance, which results in shorter set up times.
Prepare the People
The bulk of the installation of a Rotary Die Cutter normally takes about two weeks. Any
time your maintenance personnel can spend observing and preferably assisting will be
well spent. During the installation and the training period that follows there is an
opportunity to collect a great deal of information. Take pictures, notes, and video of the
process. The real nuggets come when the installer or trainer says, “Now this isn’t in the
manual but it’s real important...” These notes and pictures can be added to your manual or
database. The confidence this inspires in the maintenance crew will greatly increase their
effectiveness. Understanding the machine from the inside out will equip you for
preventative and predictive maintenance.
Week Three
They say that races are won or lost in the pits. If the saying is true than this is a critical
week in the life of the machine. Invest time in week three to debug the machine and to
dedicate it to maintenance training. Once you turn it over to production the dedicated time
will be lost forever. The goal is to go beyond maintaining the machine to improving it. In
Six Weeks Prior to Installation
the west we have the mindset that on the day of installation the machine is the best it will
Although you have been preparing the New Machine Team for some time it is now time to
ever be. We could learn from the Japanese companies that see it on the same day as the
discuss the new machine in some detail with the production crews and maintenance staff.
worst it will ever be, and then set out to improve it. This mindset will save you downtime,
The crews will want to understand the selection process for the new machine. This may
be a good time to lay out the requirements for a top operator. Some may be surprised that
the magician operator, who constantly adjusts older machinery, may not be the best fit the
new breed of Rotary Die Cutter. Older machines are adjusted by feel whereas the new
technology is adjusted by measurement through the computer. The best operator of the
new Die Cutter will be content to set the machine to predetermined standards and then let
hassle, and expense.
Production Training
Week Four and Five
Create opportunities for success for the trainer and crew by planning this phase well. If
possible train all crews on one shift. Choose jobs that do not have critical time pressure,
and keep the run lengths short. Protect their success by exercising discipline. In the first
it run. Magicians are likely to get bored quickly with the new technology.
22
days the trainer will begin with safety, start-up, shutdown, and clean-up procedures. The
balance of the time will be spent becoming proficient at setting up the machine. This
schedule will allow you to set up job #1 on Wednesday. The job should be well within the
normal limits of the machine and the run length should not exceed 5000 sheets. The key
is for the crew to get a feel for the sights and sounds of normal operation. Longer run
lengths will not allow a sufficient number of changeovers to instill confidence once the
trainer leaves.
In week two jobs of increasing urgency and difficulty may be inserted.
Lean for the Office
The greatest profitability improvement to be gained through Lean practices will be
achieved on the administrative side of the business. At first glance it seems contradictory
to say that principles adapted from the Toyota Production System would have their
greatest impact in non production areas. The truth is that Lean principles of waste
reduction can only be effective and sustainable when they are applied to the whole
business.
The run length
may be increased to 10,000 sheets. Fingerprint the machine this week. The trainer will
press the crews to run the machine at maximum speed whenever possible in order to
develop the crews comfort and control. At the end of week two the trainer exits.
In The Machine That Changed The World, James Womack et al said Lean is
"manufacturing without waste." The book exposed the Toyota Production System to a
wide audience that often misidentifies it as a shop floor program. We are better served to
think of Lean as the production of goods and services without waste. The influence of
Week Twelve
administration is obvious when the timeline between order and payment is considered. All
The machine manufacturer will send a trainer to deal with any issues that have developed
the activities of Lean are aimed at shortening this line by removing non value-added
in the first weeks of production. It is beneficial to have a different trainer for this phase as
a new set of eyes will spot bad habits and different chances to improve. Once issues are
activities (waste). The timeline on the next page depicts the many departments that have
opportunity to remove waste in both processes and people systems. Note that production
dealt with, the focus of the week will be high-speed production training.
holds the order for only 9% of the time.
The Results
Through the Lean transformation, manufacturing processes become faster, more flexible,
The investment in preparation of the expectations, the environment, and the people will
pay long-term dividends. This less pressured schedule will result in a healthier and more
reliable machine and a more productive team of qualified operators. You will have created
an exemplary machine environment that will influence your entire facility. You will have
equipped your team to win.
responsive, and predictable. The major sources of waste in the packaging world are
overproduction and excessive inventory. We make too much, we make it before we need
it, we hold it for too long, and take too much of it back in returns and allowances. Though
these activities occur on the shop floor they are directed by the administrative policies
and practices we have chosen in order to ensure customer satisfaction. The gains in
manufacturing are substantial, but the greater savings will be found in administration. The
war on administrative waste will be won by implementation of a three stage battle plan.
1. Begin by improving the accuracy and timeliness of the information and material
flow within the administrative processes themselves.
2. Focus improvement efforts on the quantity and quality of material and information
provided to production, administration's primary customer.
3. Take the knowledge and success gained internally to assist external customers
and create sales opportunities.
23
Stage One
To address the higher fruit they generated a list of problems and assigned cross-
Improving Administration
envisioned with nine steps removed and 1.5 days lead time eliminated. The process was
functional teams to solve them. Thirty days later they had achieved the future state they
Every function in the enterprise can reduce operating costs through application of a few
rapid, but by no means cavalier. Quality and safety were never compromised and the
core principles and tools. Each department can find processes that suffer from a feast or
customer was never disappointed. Today they are faster, and they improve their value
famine of material and information. Mapping the value illustrates the steps that add value
stream every week.
and those that comprise the seven wastes of administration. Using the value stream
mapping tools, any team may improve two key factors: flow and pull.
Stage Two
To increase productivity and profitability materials and information must flow through the
Partnering with Production
system without constraint and they must be pulled at the speed of customer demand.
In Stage One the administrative team began Improving the reliability and consistency of
Using these tools accountants have decreased the time it takes to receive payment,
its own process. In most plants production will have led the Lean charge and will show
planners have increased the frequency of delivery and reduced the amount of raw
signs of improvement in consistency, flexibility, and speed of response. The gains made in
material inventory, and trainers have reduced turnover and overtime through cross
safety, order, speed, changeover efficiency, and quality will pay large dividends.
training.
Concurrently, production will become a more demanding customer of administration.
Most packaging manufacturers find a wealth of opportunity for improvement in the sales
In Stage Two the administrative team can affect dramatic results by partnering with
and order processing functions. Some balk at the investment of time, the confrontation of
production to improve flow and pull for greater profitability. The foremost gains will be
protected personalities, and the purge of practices that have outlived their use. A typical
made in improved information and inventory reduction.
example of the gains available is depicted above in the Value Stream Map of one
company that did rise to the challenge.
Recently, a packaging manufacturer broke with tradition and began the Lean
transformation in the office. The cross-functional team included members from all
Armed with process knowledge, open minds, butcher paper, pencils, and erasers a cross-
administrative departments as well as representatives of its primary customer, the
functional team representing all parts of the value stream (sales, customer service,
manufacturing floor. A Value Stream Map revealed big improvement opportunities in both
design, scheduling, shipping, production, and tooling suppliers) gathered for three days of
inventory and information flow.
dedicated study and improvement. Setting aside rank, turf, and the phrase "We have
always done it this way," they drew each step in the existing process and recorded the
time the order was active and the time it sat idle.
The result is a value stream showing the total lead time of approximately three days, and
a total cycle time (the time value was being added) of about three hours. After taking a
Leadership determined that raw material, WIP (work in process), and finished goods
inventory accounted for 29% of their operating costs and set a goal to half that amount.
The team also used internal feedback provided by the quality department to measure
customer satisfaction in production. The cross-functional team sited both people systems
and physical processes that required improvement:
break to wipe their tears the team assaulted the task of creating a future state map and a
1. Teamwork "We are not a team; we all do our part without coordinating with the people
list of problems that would need to be solved to achieve that improved state somewhere
downstream. There are no points for making it easy for the next guy." Measurement of our
north of 4% value-added.
administrative worker's productivity and quality is sloppy.
Solutions:
During the three-day event the team addressed issues they considered low fruit. Faced
a. Build a scorecard based on internal and external customer feedback.
with the data the team saw that they could remove duplicate new item meetings and two
b. Set goals for order cycle time reduction c. Add a weekly order process improvement
redundant quality checks. They also moved the design request earlier in the process. In
short order they eliminated five steps and took 7.5 hours out of the process.
lunch.
c. Add a weekly order process improvement lunch.
24
2. Unclear information Factory cards have incorrect, conflicting, or confusing
information. The production codes showed that 20% of machine delays were attributed to
clarification of data, and that time pressured decisions often resulted in compromised
quality.
Solutions:
a. Form simplification and reduction.
b. No writing on factory cards.
3. Warehouse information accuracy The CSR screens do not reconcile in a timely way
Stage Three
Selling with Lean
In this stage of the battle against waste the company may trade on the credibility it has
gained through the improvement experience to gain market share. Companies that
prematurely posture as Lean suppliers will fail We must first remove the proverbial log
from our own eye before we will be able to assist the customer with the speck in his.
Neil Rackham, keynote speaker at AICC's spring meeting in April. discussed the need for
a new approach to sales in the developing global economy. When the team is ready for
with the releases of inventory.
Stage Three members will be equipped to compete in two types of sales described by
Solutions:
Rackham; Transactional and Consultive.
a. Work with software vendor to improve accuracy.
b. Use kanban (simple reorder points and signals) to improve awareness.
4. Estimating Our system is anti-Lean. Our pricing is set up to encourage customers to
In Transactional sales the club store type customer would prefer that the supplier of a
commodity be easy and automatic. Lean tools allow the supplier to automatically
replenish supermarkets (kanban controlled buffer stock). The accounts are managed by
order more than they need and then add 10%.
internal customer support and shipping personnel. Lean suppliers are able to profit from
Solution: Referred to top management for decision.
They grant the customer's wish and they become invisible.
this high volume I low margin work by eliminating sales calls, and keeping inventories low.
5. Finished Goods and Compensation We don't see inventory levels changing until we
In the example of a Transactional sales relationship below, the end user purchases one
stop paying for over-production. Current commissions encourage large lot sizes and levy
water heater at the home improvement center. An electronic kanban is sent to the water
no penalties for aged or obsolete inventory.
heater manufacturer. The signal is automatically relayed to Knoture Box (pseudonym)
Solutions:
indicating the need for a replacement package.
a. Stop adding 10% quantity to all warehouse items.
b. Prorate commissions on items in the warehouse 60 days or more.
The first signs of success were seen in noticeable reduction in Work In Process when the
leadership responded to the team's suggestions by imposing aggressively low maximum
inventory levels for fast moving warehouse items. One-third of the daily schedule was
dedicated to warehouse items. Leadership recognized that producing the exact order
In Consultative sales the Lean supplier helps customers understand their problems,
issues, and opportunities and arrives at new and better solutions than they would have
discovered on their own. Sales professionals experienced in the use of Lean tools act as
advocates within the supplier organization, ensuring the timely allocation of resources to
deliver customized or unique solutions. Successful Consultative sales make the Lean
supplier irreplaceable.
quantity on all warehouse items would recover more than 17 hours of flexible time in their
tight production schedule without loss of income.
This exemplary administrative team had the courage and management support to
address both processes and the people systems that support them. They successfully
implemented most of the drafted solutions with improvements to information and material
flow as well as morale. The partnership built in Stage Two broke down barriers between
departments and created a competitive advantage for the company.
25
This three-stage attack on waste of material. information, and human capital in
For example, in the diagram above, it takes Sales about 120 minutes to visit a customer
administration has equipped Lean suppliers to become more profitable, and adaptive as
and get the details of an order. It then takes 40 minutes for the sales person to drive to
packaging markets change.
the plant to begin communicating the information to the Customer Service
Representative. So 120 minutes is designated as Value (Cycle Time) while the 40 minutes
travel is Waste (Idle Time). It then takes 20 minutes for the CSR to enter the job
information before she passes the job along to the retoucher. The job will then typically sit
in the retoucher’s inbox for about 120 minutes. Again, there are 20 minutes of Value and
120 minutes of Waste. Note, in-between these stops is our symbol for Waste (Idle Time),
the Tombstone.
Value Stream Map versus a Workflow Diagram
A Value Stream Mapping (VSM) tool is very helpful in analyzing complex processes like
the digital workflow in a graphics communications environment. A simple workflow
diagram does help describe what is supposed to happen. But an accurate Value Stream
Map shows what actually happens; PLUS it depicts the process times, the time spent
waiting, and the amount of inventory or materials tied up in the workflow. This information
becomes very useful for analysis and isolation of specific problem areas. The VSM can
also be used to benchmark the workflow process to allow for future measuring
improvements and calculating the percentage of value-added time as compared to the
total lead time required to complete a job.
Value Stream Mapping & Kaizen Events Defined
A Value Stream Map tracks the progress of material and information through a process.
This easy, low-tech tool allows all stakeholders in a process to contribute to the
understanding and improvement of bottlenecks constraining the flow of material and
information. Every step is measured and identified as either “adding value” or
“contributing to waste.” Once the opportunity for improvement has been identified, a
cross-functional improvement group is assigned to participate in a focused improvement
effort known as a Kaizen event.
Kaizen Events
Kaizen means “to continuously change for the better,” but it has become synonymous with
a concentrated process improvement team approach to change. Once a bottleneck is
identified, a cross functional team is assigned to study and solve the problem. The team is
comprised of the people who use and supply the process regularly, plus a few people who
are outside the process. The “outsiders” are valuable participants who provide a much
needed perspective not constrained by familiarity. They often ask annoying, ignorant, but
very insightful questions to push the team to open up their problem-solving perspective.
26
Kaizen events can range in length from three to five days, during which the team works
uninterrupted on process improvement. The schedule begins with a mandate from
company leadership (i.e., senior management) providing the scope of the problem and any
“guardrails” or barriers regarding the desired solution. The team then sets about studying
the problems’ current state, designing a future state and testing solutions. Finally they
report their findings back to company leadership for permission to enact corrective action.
The process is rigorous, and the team usually finishes exhausted and invigorated because
they have created both the solutions and the buy-in to support them in a very short time.
27
Chapter 5
Measure It!
CONTENTS
The Power and the Pitfalls of Measurement
12. Overall Equipment Effectiveness and the
Changeover Effect
(Originally published Corrugated Today December 2008)
Traditional measurements in the packaging industry have focused on utilization and speed. This may be due to
the fact that most packaging plants were owned by the same folks who owned the trees and the paper mills.
Consequently, a high performing packaging plant was measured on consumption of paper rather than overall
profitability.
Whether the process being measured is an entire plant or an individual machine the same rule applies: You Get
What You Measure. If you measure and reward speed you will get speed at the expense of quality. When a job is
particularly important and operators are instructed to closely watch the quality then speed will go down. If
utilization is key than we may decrease preventative maintenance and incur the inevitable breakdowns. Even
more than most industries, we need to have well balanced measurements. This article will discuss four key areas
of measurement that will help companies demystify the gathering and application of good data: Baseline
Measures, OEE to the Bottom Line, The Changeover Effect, and Establishing Goals.
Baseline Measures
We tour hundreds of plants every year. In far too many we search the production facility and find no posted
measurement. Often if measurements are in place they are not readily available or up to date. So where should
a company start if it falls into this category? Start by gathering baseline numbers. No improvement project on a
machine center, work cell, or even a department should start without some sort of meaningful baseline data. If
you don’t know where you started, how will you know if you have improved? Everyone in your company should
have some sort of quantifiable way of measuring their daily work. We regularly ask workers, “How do you know
how you are doing?” The lack of irate customer calls or the absence of shouting from ones supervisor does not
count as a good measurable. To get you started we will focus on measuring the production floor. There are a
number of measures a manufacturing company can use, but we will suggest only eight. They are called the Eight
Key Baseline Measures for Production. These can be measured daily, weekly, or monthly but we will focus on a
weekly duration to start. You will need at least a month’s data to generate meaningful baselines for each key
measure. Once the baselines are established, the next step is to calculate OEE.
28
Overall Equipment Effectiveness and the Bottom Line
Availability
Eight Key Baseline Measurements for Production
1
Total Machine/Work Center Hours Scheduled
(this is not machine capacity)
2
Quality
(units in verses salable units)
3
Maximum Run Speed
(use OEM Specifications or highest recorded speed x 100)
4
Average Run Speed
5
Downtime
(planned and unplanned)
6
Number of Changeovers
7
Average Changeover TIme
8
Total Changeover Time
OEE is a balanced measurement that accounts for all three attributes of process health:
Total Time Machine is Scheduled to Run
Availability
Losses
The top bar shows the total time the machine is scheduled to run. This is not capacity, it is
only the time that labor is charged against the machine. The Availability bar shows how
breakdowns, changeovers, adjustments, breaks, lunches, and meetings decrease
operating time and leave us with less running time.
So in this example of a one month’s production the Availability calculation is:
!
!
!
!
!
!
Running Time!／ Staffed Time!
210 Hours ／ 590 Hours = 0.35
Availability, Performance, and Quality.
!
Or 35.6% Availability
The best attributes of OEE is that it is prescriptive and easy to understand; telling you
which investment of time and effort will achieve the desired result of increased productivity.
The drawback of OEE is that it was developed for the automotive industry, an industry that
does few changeovers. Job shops that make their living off of custom orders perform
multiple changeovers throughout the day creating a significant amount of excess downtime
not necessarily valued by OEE. We will deal with The Changeover Effect in the next
section.
29
Performance
Total Time Machine is Scheduled to Run
Availability
Performance
Total Time Machine is Scheduled to Run
Losses
Availability
Losses
Performance
Quality
Losses
Losses
Losses
If the machine or work center ran at the designed speed during the running time it could
This measurement is often made more difficult than it needs to be. Keep it simple, a
produce the maximum output quantity. Reductions due to handicapped processes,
specific number of units are brought into the production area to be worked and a specific
product requirements, and minor stoppages result in an actual output less than maximum.
number of units will leave the area to be sold. The ratio between the two is your Quality
!
!
Actual Output! ／ Target Output ( Availability x maximum possible output)
number.
So the measurement looks like this:
!
!
!
!
!
!
7,000 ／ 15,000
!
!
Conforming Output ／ Actual output!
!
!
!
!
!
!
Or 46.6% Performance
1,300,000 ／ 1,470,000
!
Or 88.4% Quality
30
Overall OEE
Tying Dollars to OEE
Once you are comfortable with your OEE
numbers it is quite simple to figure out what a
Total Time Machine is Scheduled to Run
one point improvement in Availability,
Performance, or Quality is worth to the
organization. Let’s assume that a company is
Availability
Losses
looking to increase its production capacity.
The chart to the right is a real world example
Performance
of a corrugator sales earnings per hour as well
Losses
as earnings for square feet produced. Using their numbers a 1% increase in availability
would increase their sales potential another $50,000 per month. A one point performance
Quality
increase would raise their potential sales capacity by another $76,000 per month. A one
Losses
point quality gain would return approximately another $50,000 per month. Therefore a one
point gain in each area of OEE for this Corrugator would make available another $176,000
in sales per month!
The Overall Equipment Effectiveness calculation in this example would look like this:
.356
(Availability)!
x
.466
(Performance)
x
.884
=
.146 x
(Quality)
100
=
The Changeover Effect: OEE for the Job Shop
14.6%
(OEE Index)
Since OEE was developed by the auto industry the measurement works quite well for
traditional production lines which perform few changeovers. There are challenges,
Now, we know for this particular measurement period how the production area performed.
however, within the measure for the job shop that that performs multiple changeovers in a
The 14.6% OEE should be used as a line in the sand. When we begin to establish goals
given week. The problem is this: as changeovers increase, so will downtime. While
each area of OEE should be targeted for an improvement. OEE also allows the
multiple changeovers are a necessity for all job shops (and being good at them is a great
benchmarking of the work center to other like work centers.
benefit) the downtime they incur has as a negative effect on OEE.
Changeover Effect
In addition, the three individual measures provide a diagnostic for improvement activity.
should be top priority. Further investigation into production data or from direct observation
will show whether to attack downtimes (planned or unplanned) or changeover times.
50
Downtime / Hours
Following the numbers above it is clear that the Availability of the machine to do work
40
30 25
27
28
30
32
80
85
90
95
33
35
38
40
42
43
37
110
115
120
125
130
20
10
0
Downtime
75
100
105
# of Changeovers
31
P2 has developed a measure for the job shop that will accurately compensate for desirable
changeover improvements and their heretofore negative impact on OEE.
Establishing Goals
In looking at the multiplier in the example above, availability raises from 35 to 47.3. This
Companies able to reduce their changeover times create more capacity to perform even
more changeovers. The chart below depicts a company that averages 75 changeovers a
week. The work center started at 25 minutes but was able to reduce their changeover
results in over a 12 point improvement. Finally crews get credit for their changeover
efforts.
Many companies have some sort of measurement structure in place. In these you will see
times to 13 minutes. Excess capacity gained equated to another 900 minutes/week.
numerous charts and graphs showing different trends. What you don’t often see are good
systems in place to drive improvement based on those numbers. Why have
measurements if there are no plans to do something with them? Too many facilities have
Minutes / Week Gain
25min Changeover Baseline
900
750
600
450
300
150 75
0
24
150
225
375
300
450
525
600
675
825
750
900
improvement.
The most successful facilities establish goals for each machine center or work station.
They should be clear, attainable, and meaningful. A good place to start would be to set
goals for the three sections of OEE, Availability, Performance, and Quality.
Extra Capacity
23
22
meaningful production goals established and fewer still spend significant time on
21
20
19
18
Time should be set aside beyond normal production to work on area goals. Workgroup
17
16
15
14
13
Changeover Time
meetings are a great way to promote teamwork, communicate with employees, and attack
obstacles. As goals are established be certain that individual goals align well with
While the reduction of changeover time and extra capacity are very positive things, the
company goals. Once a crew or individual reaches their goals, some sort of recognition
extra downtime is actually shown as a negative when calculating the availability for OEE.
needs to take place. Recognition does not necessarily need to be monetary. Each
Therefore to get an accurate measure for availability you will need to establish a
organization is different; sometimes a handshake from a supervisor or a thank you from
changeover baseline. Once the baseline is established, giving the crews credit for doing
leadership is enough. Below are some pitfalls to avoid when establishing goals.
more changeovers in less time will give availability a positive multiplier. The following chart
shows how the calculations work. The only data you will need to perform the
Common Pitfalls
measurement are highlighted in yellow.
Misaligned Rewards: The most common pitfall to any new measurement is human
Baseline
Changeovers/Month
Baseline Scheduled
Hours/Month
Calculation
Baseline
300 / 395
0.76
300
395
Current
Changeovers/Month
Current Scheduled
Hours/Month
350
315.5
Current Availability
Multiplier=[1+(currentbaseline)]
35
1.35
Current
nature. Competition, while providing much positive motivation can also blur judgment.
This is particularly true when measurements are changed without reviewing the reward
systems in place. If the organization has rewarded (formally or informally) volume and will
now focus on OEE, than the message and the rewards need to be aligned.
350 / 315.5 =
1.11
Skip process health: Some may be tempted to manipulate availability on the short term
1.11 - 0.76 =
0.35
by skipping or reducing commitment to PM’s, training, or crew meetings. The lessons here
New Availability
35 x 1.35 =
are obvious and painful.
47.3
32
Beat the clock: Others may try to gain time by moving the crew and charging the labor to
other work areas when work is not scheduled on the machine. This is a great idea! But, it
should only be done if the crew could not be better utilized at their machine cleaning,
maintaining, or practicing change-over.
The mix card: One of the problems with conventional measurement is that the types of
work being processed can differ drastically in areas such as run length, complexity, mix,
and so forth making accurate measurement of similar process difficult and dissimilar
processes impossible. OEE will allow that accuracy only if the OEM spec for speed is
used. As soon as handicapping is allowed the ability to benchmark is lost and the games
will begin.
Speed for speed sake: Some will mistakenly see opportunity in speeding up the
operators. The push to go faster will be counter-productive unless the excuses of
inadequate performance training and machine capability are first addressed.
The quality of quality reporting: It is difficult to manipulate the quality number. Our
reporting systems, however, do not support accuracy of good sheets in versus good
sheets out. Further the measure will push us to improve even more if we include returns
and allowances to the calculation.
Measuring Production Alone: Let’s face it; production is measured more than any
process in manufacturing because it is easy. Measurement of sales, design, and customer
service activities are more difficult to measure, but they are well worth the effort. A
lucrative 70% improvement in speed and accuracy of information, materials and tooling
supplied to the work center is typical.
Summary
Measurement is a powerful tool for process improvement. OEE is one of those tools that
can be used as a balanced, diagnostic, and motivational measure. Measurement should
be easily understood so everyone in the organization can use it. A weekly OEE posting for
machine centers provides visual guidance for improvement. Because the job shop has
unique challenges, the changeover effect should be accounted for. As with any measure it
can and will be used against you if you fail to prepare for the pitfalls along the path of the
Lean Journey.
33
Chapter 6
Sustain It!
CONTENTS
Sustaining Lean
13. Case Studies on Companies that
Sustained Improvement and Profitability
(Originally published Corrugated Today September/October 2006)
It is more like a theater than a production plant. The first thing that strikes you is that there is about half the WIP
of typical converter. People don’t run, but they move with purpose as if a choreographer were directing workers,
conveyers, lifts, and trucks. There is a sense of urgency and confidence in a plant where best practice is common
practice and each team member works daily to make it better. It appears that they live by the Lean definition; to
produce goods and services without waste of time, material, or effort.
The number of converters (printers, corrugated, and folding carton that are beginning to fit this description of a
Lean enterprise is increasing. They post double digit productivity improvement, 30% reduction in finished goods
inventory, 40% reduction in order lead times, 50% reduction in WIP, 60% increase in machine speed, and 70%
increase in order accuracy. What separates the few Lean leaders from the many companies that have launched
Lean initiatives and found it difficult to produce and sustain significant improvement?
Three Lean leaders were interviewed for this series of articles to answer this question from their own experience.
As Shakespeare put it “some achieve greatness and some have greatness thrust upon them”; such is the case
with these leadership teams. One was forced to go Lean by a major customer, another was an early adopter of
Lean principles, and the third chose Lean strategies just two years ago as a means of reinventing a 50 year old
company. All three have developed a corporate character, an organizational discipline that ensures the changes
will endure.
Those interviewed here represent the paths various companies have taken to sustainable increases in
productivity and profitability. While none claim to have arrived at the end of the journey, they have all made
remarkable progress. Their willingness to be open about their struggles as well as their gains demonstrates
commitment to excellence in both operations and culture. Joseph M Palmeri, Jamestown Containers’ Director of
Technical Services, is well known in the industry for his commitment to implement Lean in each of their box plants.
34
The first interview, with GM Robert Warnock, tells the story of Jamestown Containers
Buffalo Division and how a customer thrust Lean upon them.
Q; (P2) How did Jamestown begin the Lean journey?
A; (Warnock) It was a matter of survival for us in Buffalo. As a third party packager we
spent months working with a major automotive supplier to understand their process and
extricate it so that we could complete it for them on a contract basis. Like everyone that is
growing we had systems that were out of control and needed Lean, but then the customer
required us to go Lean by doubling the volume of our commitment three days before we
were to begin fulfilling their orders.
Q; (P2) What questions do you ask regularly?
A; (Warnock) Do I really believe that if I don't grow, my business will die?
Do I believe that my leadership team and I have what it takes to lead the Lean change to
our cultural that is necessary to survive? Or are we simply good people who are dedicated
to continuing the "good fight?"
The good fight isn't good enough. How are we going to reinvent our process, procedure
and policy into a truly reformed business if we are counting on those who simply know how
to keep the current model running as best they can? I was fortunate to have a proactive
team who embrace change and betterment as a way of thinking.
Q; (P2) What did your group do first?
A; (Warnock) We got outside help; we needed to learn about Lean and which principles
applied to our immediate need. The University of Buffalo provided training to 40 of our
Gallery 1.6 Jamestown Container
people and we were able to get state reimbursement for employee instruction. We started
implementing on the highest volume line, which would also be the most visible when our
customer visited.
Our initial Kaizen's (improvement team events) focused on creating flow. We changed the
line from one team of 10 to 5 teams of 2 with much greater productivity and flexibility.
Then we moved upstream and held Kaizen's to attack the bottlenecks.
Q; (P2) How long did the initial transformation take?
A; (Warnock) It was 100 hour weeks from the General Manager to the Janitor for 8
months. I wouldn't recommend that aggressive a schedule to anyone, but it was what we
needed to do. Perhaps there is a lesson learned in that. If we all treated every day as a
day of survival and embrace change, more of us will be here tomorrow to tell our story.
Q; (P2) So the customer forced you to rethink your strategy?
A; (Warnock) We had to rethink everything, from mission & strategy, to measurement &
operating procedures. We work at staying that innovative.
Many of today's business and leaders are in the same situation and don't want to admit it
Clear signage for everyone
(maybe because they don't know how to fix it). We leaders need to ask ourselves the hard
questions and face the brutal facts, regularly.
35
Am I prepared to be the most dedicated learner in my business on Lean systems, cultural
change, and whatever else is required?
Gallery 1.7 Jamestown Container
Am I prepared to step out, on faith, because of the success stories I am hearing all around
me?
Q; (P2) What have been the largest obstacles to progress?
A; (Warnock) Busyness of course, and the temptation to delegate responsibility below the
leadership team. Our plant manager, Mark Wrigglesworth, has been on the front line of
this entire process and provides a consistency that has been invaluable. Lean cannot be
delegated down or take back seat. We need to put in systems that keep everyone on
track, including ourselves. For example Standard Work is that work (process, procedure,
report) that must be accomplished regularly in order for the system to sustain itself. This
standard work is published and visual for all to see. I can hold the system accountable by
observing the lists are being checked off, but there must also be an audit of the standard
work to hold those performing the work accountable to the system. The audit process
speaks volumes to what the leader feels is important. Remember that an organization will,
over time, take on the characteristics of the leader. (so, if you don't like what you see...look
in the mirror!).
Q; (P2) It sounds like you have integrated Lean with your existing quality system?
A; (Warnock) We believe that the Toyota Quality System (TQS) is the benchmark system.
JCC adopted the "5-Why/5-Phase" elements of this system and took our customer
Dashboards for all critical metrics making it easy to see how you are
doing against the plan
complaints to heart.
We audit our process (105 internal audits per week). We measure our Safety, Quality,
the entire plant. Again, we embraced the concept, grew the culture, never lost focus, and it
Delivery/Fill Rate, and Tidiness and post the results on our SQRT Board. I believe that if
worked.
you focus on these, Costs will eventually take care of themselves.
Q; (P2) Any advice for those beginning the Lean transformation?
Q; (P2) What benefits have you experienced so far?
A; (Warnock) Be prepared for idleness in your plant. Embrace it, it is a good thing. Idleness
A; (Warnock) Well needless to say we kept the customer and grew our business with
simply becomes a new waste that needs to be focused on. We found we were getting the
them. In addition the things we learned with this product line translated readily to the rest
same amount of volume done in less time. Idleness means that Lean is working and your
of the business. Our bottom line improvement, one year after implementation, was 10%. It
capacity is increasing. We were surprised by this and we had to make a plan. We couldn’t
was a large improvement that was made up of a myriad of micro-improvements throughout
tell employees that Lean is good for the company and, because they are now excess, they
are bad for the company. We made lists of "all the things we want to get done, but can't
36
find the time for". We go to these lists when we find ourselves with temporary excess
people capacity. We were able to reduce temporary labor and cross-train for coverage of
breaks, meetings, and vacations.
Answer #1
Pacific Southwest Container, Early Adopter
Early adopters are a breed apart. They try the latest toys and tools, they help the
manufacturers get the bugs out of new technologies, and they drive down the price for the
rest of us. They often also get an edge that makes it difficult for the rest of us to catch up.
Such is the case of the early adopters of Lean strategies at Pacific Southwest Container
This article began with the question; What characteristics define packaging companies that
(PSC). They took the risk and invested the resources, learned from their failures, and
have sustained great benefit from Lean? Jamestown Container’s answer cites
stuck with it to make these strategies a part of the organization’s DNA.
commitment, willingness to risk, and the adaptation of people systems. These traits are
evidence of dedication to a new way of doing business. Given the positive impact on
Founded by Don Mayol in Modesto, California in 1973, PSC has grown from a small
operational expenses, enterprise sales, and preferred employer status, they are glad to be
family-owned business to one of the largest independent converters on the West Coast.
on the Lean journey. Their final bit of advice, begin on your own schedule and don’t to
With John Mayol at the helm operations in Modesto and Visalia now produce corrugated
have Lean thrust upon you.
containers, single face lamination, POP, protective packaging, and folding cartons. PSC
has long held a reputation for innovation deserving of the slogan, “More than just a box”.
Lean packaging manufacturers strive to produce goods and services without waste of
time, material, or effort. Their results: double digit productivity improvement, 30% reduction
Like most the early adopters of Lean PSC started small. They isolated a few work centers
in finished goods inventory, 40% reduction in order lead times, 50% reduction in WIP, 60%
in the manufacturing area and began with 5S. There was enthusiasm during the activity
increase in machine speed, and 70% increase in order accuracy.
stage when improvement was visible and management appeared committed. However,
when market conditions or the busyness of the season sidelined the initiative the
What separates the few Lean leaders from the many companies that have launched Lean
improvements that had been achieved deteriorated. Some workers felt they had been
initiatives and found it difficult to produce and sustain significant improvement? Three
duped by another flavor-of-the-month program. This resulted in a good deal of resistance
Lean leaders were interviewed for this series of articles to answer this question from their
when management decided to adopt Lean in earnest to adopt it as a way of doing
own experience. Jamestown Container’s Buffalo division, discussed in Part One, was
business in every department. One characteristic that sets Lean leaders apart is the ability
forced to go Lean by a major customer. Pacific Southwest Container was an early adopter
to learn from failure, and to persevere.
of Lean principles. TimBar Packaging & Display, discussed in Part Three, chose Lean
strategies just two years ago as a means of reinventing a 50 year old company.
P2 asked Vice President of manufacturing Chuck Mitten to tell the story of PSC’s
experience with Lean production.
All three companies have developed corporate character, an organizational discipline that
ensures the changes will endure. A disciplined commitment to endure was necessary to
Q (P2) How long has PSC been on the Lean journey?
achieve sustained impact on the P&L. Early gains from Lean improvement will prevent
A (Mr. Mitten) In 1988 PSC brought some structure to continuous improvement. We were
quality problems, increase flexibility and reliability of processes, and create free capacity at
having success in the marketplace. But, behind the scenes waste was high and we were
no additional labor cost. However, none of these valuable benefits are obvious on the
too often scrambling to overcome the days “unforeseen (but painfully routine) crisis.”
bottom line. In time the improvement to the entire value stream will lower costs, decrease
inventory, and increase sales, resulting in significant impact to the bottom line.
Q (P2) What tools did leadership employ to get started?
A (Mr. Mitten) First we adopted the Crosby quality improvement process and we embraced
the concept that all work is a process and all processes can be improved. By 1992 we
37
found the implementation of Lean to be a natural extension of our efforts to improve and
ensure quality of product. 5S was the first Lean tool adopted and it quickly helped identify
Gallery 1.8 Pacific Southwest Container
nagging issues that caused defects and unreliable production.
Q (P2) So PSC has been using Lean tools for about 15 years, what tools are you
finding most useful now?
A (Mr. Mitten) On the foundation of 5S we have used many Lean tools. The key factor is
standardization. Consistency is essential to maintaining a Zero Defect mentality and
delivering vital bottom line results. We use Kaizen (fast cross-functional process
improvement events) to involve the people closest to the process in prevention. By the
same token, Autonomous Maintenance gets the crews involved in the cleaning and
upkeep of their work centers. Predictive Maintenance keeps machines more available.
Measurement using Overall Equipment Effectiveness (OEE) is posted at kiosks in each
work center so that team members can monitor their progress toward goals.
Q (P2) Are these measurements a scorecard that shows team members how they are
doing?
A (Mr. Mitten) Yes, but it’s only the beginning. Connecting the satisfaction of our
customers needs to the needs of our Team Members is also an important force behind our
progress. A variable compensation plan and a vital recognition system reward team
members for great performance. Daily results are posted on the kiosks. In addition,
Recent process with organized tooling wagons
bonuses are paid every four weeks and the result is connectivity; to the customer’s needs,
competitive realities, and to one-another. We try to keep focused on the vision and not
become discouraged by small setbacks.
Q (P2) What have been the largest obstacles to progress?
Q (P2) What has been the driving force behind the progress with Lean at PSC?
A (Mr. Mitten) The two biggest mistakes we’ve made, and we’ve made each more than
A (Mr. Mitten) Customer needs. We’ve got to continuously assess the changing needs of
once, relate to communication and to not being planful enough. Separately and together
our customers and respond accordingly. Wherever customers are growing their needs are
these two pratfalls have been the cause of the periodic proverbial “one step back.”
changing. As we are fortunate enough to add new customers we have to tune into their
specific needs. Today we enjoy a pervasive cultural bias toward continuous improvement
(P2) Let’s take them one at a time.
and consequently are able to respond to the dynamic needs with both continuous gradual
A (Mr. Mitten) OK , we’ll start with communication, more specifically under-communication
improvement and innovation. We have improved internally and Lean has allowed us to
has been an obstacle to our Lean progress. When we openly and honestly communicate
become a greater resource to find solutions for our customers as well.
the gravity of competitive challenges and also the potential benefits to the Team we
leverage the tools of Lean to their fullest. By engaging the entire Team in collaboration on
“what is important now” we can more effectively adapt to the new reality of our market.
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(P2) You said the other obstacle to Lean progress was insufficient planning.
A (Mr. Mitten) We are an action oriented team. However, before springing into action, a
Gallery 1.9 Pacific Southwest Container
plan must be developed. We otherwise spend too much time being reactive, we don’t
define a finishing point; and we don’t set ourselves up to complete initiatives. We’ve
learned that the expectation of results must be clear, check in points defined, and
implications made reasonably explicit.
Q (P2) Earlier you mentioned the mindset your team has developed toward continual
improvement. What additional benefits have you experienced operationally and
cultural?
A (Mr. Mitten) We’ve created a remarkable amount of capacity thanks to the sustained
nutrition of continuous improvement. Operating crews have a sense of pride, ownership,
and an intimate understanding of their equipment. All of which is visible when we host
prospects and customers.
Q (P2)How do those who tour your plants respond to the measurement, cleanliness,
and organization of the work areas?
A (Mr. Mitten) We tour prospective customers as often as we can. History tells us that 85%
of the people who tour our facilities will become customers.
Q (P2) To what degree have your sustained process improvement efforts impacted
Each process has information kiosk where current metrics are posted
the bottom line?
A (Mr. Mitten) Meaningful capacity gains through Lean techniques combined with strategic
capital deployment helped us to reach a milestone of total sales in 2005; eclipsing one-
Q (P2) What has your leadership team done to ensure that your Lean improvements
hundred-million dollars in revenue. In 1988 when we began to bring more structure to our
are sustained?
improvement efforts sales were fourteen million dollars. Our five year compounded annual
growth rate is 14.5%. Here are just a few examples of the benefits of improvements
developed by our team members and suppliers. Cutting dies last longer and cut quality is
better. Belts we used to have to clean, incurring downtime, have been innovated so they
To ensure that our Lean improvements are sustained we plan, persist, learn, and adjust.
We set productivity improvement goals and keep looking for methods that will yield
progress. Performance metrics and goals are posted at each machine center, in Customer
Service, Design, Scheduling, Maintenance, Transportation…throughout the organization.
don’t get dirty. Adhesive application methods and formulations have been engineered to
optimize performance and minimize total cost. Jigs have been developed to reduce set-up
Pacific Southwest Container appears to have developed the requisite corporate character
time and increase run speeds. Every department is positively impacted.
to sustain their hard won improvements. PSC’s early adoption of Lean principles and
practices required that they blaze a trail without a map; there were few job shop models
available as a guide. They learned that many of the benefits in the first year of a Lean
39
transformation are invisible on the P&L. Set-up reductions and organization create
flexibility and increase capacity, but do not immediately translate to throughput. With
P2 discussed TimBar’s Lean journey with Bill Thom, Senior VP of Operations.
Q; (P2) How long has your company been on the Lean journey?
persistence they improved the entire value stream until the entire production cycle was
reliable. Based on increased capacity, flexibility, and reliability, inventory levels could be
reduced. Consequently the value stream, the timeline between order and payment,
decreased and available cash increased.
A; (Thom) A little over two years; we wanted structure around our initiatives to improve
productivity, and reduce waste. To meet our aggressive goals it was important to rally
under one flag. All the top level company leaders investigated Lean and were convinced
that this was the methodology for us.
John Mayol readily admits that the road has been bumpy, but well worth the trip; “We
backslide, we still get busy and temporarily lose focus. But, our people recover quickly,
attack problems with cross-functional teams, and get us back on track.” Mayol and his
team of process improvers enjoy the challenge of a new problem, but they detest solving
the same problem two days in row. These risk-friendly early adopters know that failure
(falling short of lofty goals) is necessary for innovation. As Samuel Beckett put it, “Try
again, fail again; fail better”.
After training the top leaders a process improver was chosen from each plant. These Lean
Champions were trained and each of them began driving change in their own division. A
corporate Lean Champion acts as a resource and coach and holds them accountable to
an ambitious timetable.
Q; (P2) What has been the biggest driving force behind your progress?
A; (Thom) Our president and CEO, Matt Heleva is a team builder. He is results driven and
For Jamestown Container the Lean war on waste started as a forced march in response to
is challenging all levels of the organization to improve. Under his leadership opportunity
a customer demand. PSC willingly began the journey as an early adopter. The third and
for involvement and advancement are increasing. This is a fairly good sized outfit, but we
final segment of this series will describe the rewarding progress of a company with only
are proud that TimBar is still a place where an individual can make a difference.
two years Lean experience. In addition the commonalities will be summarized for those
beginning the journey that will follow the trail markers carved by the pioneers of Lean
Every position in the organization has been impacted to some degree by training and
packaging.
involvement in process improvement. One of our key goals is to grow each of our
supervisors to become a Value Stream Manager. To achieve this goal we will need to
What separates the few Lean leaders from the many companies that have launched Lean
break our traditional way of thinking about department management and teach people to
initiatives and found it difficult to produce and sustain significant improvement?
look at whole processes for producing goods and services. We call this education process
TimBar Tech.
Three Lean leaders were interviewed for this series of articles to answer this question from
their own experience. Jamestown Container of Buffalo faced closure if they did not comply
Q; (P2) The current workforce is buying in to Lean. What are you doing to bring in
with their major customer’s mandate to go Lean. They survived, and transformed the way
new people as you grow?
they did business. The results included a 10% bottom line improvement in the first year.
Pacific Southwest Container of Modesto California was an early adopter of Lean
principles. After a couple of false starts they were able to incorporate Lean and Quality
strategies to bring systemic change to their culture and 15% sales growth per year. The
final interview profiles TimBar Packaging & Display, based in Hanover PA. TimBar chose
Lean strategies just two years ago as a means of reinventing a 50 year old company. All
three have developed a corporate character; an organizational discipline that ensures the
A; (Thom) There are changes in just about every department. For example, workers
participate in panel interviews for consensus hiring rather than the traditional hiring
method. We are adding new perspectives to the company by bringing in the best available
person in the market rather than the best we can find in the industry. Recent college
graduates are hired and put through months of formal intensive training with hands-on
experience in every department. We just graduated our first class of sales interns and we
have begun a program for production management trainees as well.
changes will endure.
40
Gallery 1.10 TImBar Oxford
Gallery 1.11 TImBar Oxford
Central Lean Information Boards for everyone to view their progress
‘Safety Lenny’ showing goals and metrics
Q; (P2) What have been the largest obstacles to progress?
Q; (P2) What benefits have you experienced operationally and culturally?
A; (Thom) This is a 50 year old company with traditional hierarchical leadership; I say, you
A; (Thom)We can put a handle on 20% productivity improvement that we ascribe to Lean.
do. It was purposefully maintained in silos so it has been difficult to build trust at all levels.
Controllable waste numbers are also at an all time low, having dipped below 6%. Our
Lean was a methodology to throw out our old way of thinking. There is an open-
Lean improvement efforts have become a vehicle for communication in other areas. Lean
mindedness we have not experienced before.
opened that up and got us started on a cultural change. There is a new language and
perspective that helps each employee to become a process improver. It’s different now;
Companies are always founded by innovators. We have a lot of respect for the people that
we are a packaging company that happens to use corrugated.
got us here over the last five decades and we are standing on their shoulders. But, we
have to stay innovative, so we used Lean to question everything we do. We have kept
Q; (P2) What has your leadership team done to ensure that your Lean improvements
many of the old methods but now we know that they are working for us. We also threw out
are sustained?
and replaced many traditional practices.
41
A; (Thom)Our Strategic Foundation ties our mission, values, and goals to objectives for
every division, department, team, and work center.
Q; (P2) Can you elaborate about the Operational Assessment?
A; (Thom)It is Lean operational assessment that is specific to our business and includes
process improvement in every part of the business. All the plant managers were involved
Q; (P2) So it’s a mission statement with feet. How does it work?
in developing the measure. A team has been trained to audit entire plants and make
A; (Thom)The leadership team worked to distill the key components of our business to
specific recommendation for improvement year to year. There is a follow-up action plan
one page. It is posted everywhere and referred to in our measurement and in our decision
with goals as to how it will impact Safety, Quality, Productivity, Visual Workplace, and
making.
Controllable Waste. Every plant has been audited, and action plans are being developed.
Q; (P2) How are you doing on the administrative areas?
Q; (P2) You were very specific about the goals and all of the components listed are
A; (Thom)We want every area of production and administration to be measurably
measurable. Was that intentional?
improving every year. Kaizen's have been completed in Customer Service, Accounting,
A; (Thom) We tie everything to this foundation; our Operational Assessment, our
and Shipping. We’re not as good as we need to be in our Lean efforts on the
performance evaluations, our departmental measures, as well as our machine centers.
administrative side. We are building a Corporate Quality Council that will combine all of our
There is an OEE (overall equipment effectiveness) goal for every machine center.
process improvement from Lean and Quality under one organization.
Everyone should be able to see how their daily work supports the company goals.
Q; (P2) What has been the most surprising improvement?
STRATEGIC
FOUNDATIO
N
Mission: Provide superior value
to
our
customers
through
innovative packaging, display and
service solutions that maximize
our return on investment.
Principles and Behaviors:
Our #1 priorities are safety,
health and well-being.
People are treated with trust,
respect and honesty.
Customer needs drive what we
do.
People will participate in
problem solving and goal
setting.
Change fosters growth and
improvement.
Input and feedback are valued.
Operate as one company.
Speed,
simplicity
and
decisiveness
Recognize
accomplishments
and celebrate success.
Do the right thing, act like an
owner.
STRATEGIC FOUNDATION
Vision:
To be the best
independent corrugated company
in the USA in the eyes of our
stakeholders.
Goals
Numeric targets
for
Safety
Sales
ROI
Quality
Packaging Solutions That Build Relationships
Strategies:
Core Values:
Customers
People
Accountability
Execution
Financial Responsibility
Continuous Improvement
Develop a safety culture throughout the corporation
that positions TimBar among the top performers in
our industry.
Grow volume in each of our segments and markets
ahead of industry and/or market growth.
Attract, develop and retain the best people.
Develop a culture for continuous improvement with
manufacturing productivity improvement and waste
reduction.
Continue to reinvent service to the customer that
improves speed-to-market, flexibility, reliability and
innovation.
Embrace information technology that improves our
competitive advantage and profitability.
Seek new products and services that have growth
and margin potential above our averages that require
conservative initial capital investment.
Selectively and profitably grow the company through
acquisitions that compliment our current network and
product lines.
Utilize internal communications to align associates
with our mission & goals and external communication
to selectively position our products and services.
A; (Thom)The way we look at unscheduled downtime has changed dramatically. Now that
it is measured more effectively it has improved across the organization by 15%. One plant
has cut unscheduled downtime by 50% and is working to do it again this year.
Q; (P2) There have been a lot of changes in a short two years; any advice for those
getting started?
A; (Thom) If I had it to do over again I would start in Maintenance. First, because once
you get started on machine centers the Maintenance personnel are heavily impacted.
Second, because getting their parts and tooling organized affects recovery from
breakdowns, as well as improving preventative maintenance. Lastly, getting computerized
maintenance management installed takes a lot of time but can pay great dividends to
uptime through preventative and predictive maintenance.
The Common Thread
So, what can we conclude about these Lean leaders? What characteristics and behaviors
set them apart from those that have received disappointing results from their Lean
endeavors? Three commonalities are clear; commitment, willingness to risk, and the
42
adaptation of people systems. These traits are evidence of dedication to a new way of
change with only one hard and fast rule; that they were not to make any changes that
doing business.
would disappoint the customer. Commitment. These Lean leaders decided early in the process that they would endure
Most fear failure so much that they avoid risk and resist making big changes.
the necessary hardships to bring about lasting improvement. The mindset was different.
The goal was wholesale change and they knew that the return on their investment would
They knew that they would never be completely satisfied with their progress. “That’s why
take time. Most grow impatient and fail to complete even the entry level tool of 5S. A
they call it continuous improvement” says Dave Miller of another Lean leader, Allpak
machine is chosen and a 3S blitz brings a spring cleaning type improvement to the area. Container in Renton WA, “We try and we figure out how to do it better every time; we just
The activities of sorting, setting in order, and shining (cleaning) the area bring temporary
need to learn how to fail faster!”
enthusiasm, but little or no positive impact on machine or crew performance.
The commitment to change propelled this group beyond their risk aversion with the
What set the Lean leaders apart was that they treated the first machine center or
knowledge that they would have to fail on the way to success. They took the risk of
administrative process as a template with the plan to transform every department of the
dedicating more people to process improvement and maintenance; they invested in
organization. To accomplish company wide change they included both internal and
training, use of outside resources, and they made a commitment of time for the changes to
external suppliers of information, tooling, material, and service in the project. Each worked
take root.
to improve the quality of the goods and services they provide. They knew that an
exemplary machine center would show the rest of the organization the benefits of Lean.
Baselines were established and productivity measures were put in place for all.
Adaptation of People Systems. Each of the Lean leaders discussed a need for culture
change. Culture is said to be the personality of an organization, but in terms of behavior it
is just the way you get things done. So these companies could be seen as working
Those that get lasting improvement go beyond the 3S activities to complete the more
intentionally to develop a corporate character that keeps its promises to internal and
difficult agreements between shifts and departments to standardize and sustain the
external customers.
improvement in the form of SOPs, cleaning checklists, audits, and other forms of
recognition and accountability. They see results in improved morale and safety, and may
then graduate to Lean tools more specific to the productivity needs of the area.
Each of the companies interviewed adapted their people systems (i.e. behavioral
expectations, training, measurement, communication, compensation, recognition and
accountability) so that each worker would see how their daily duties contribute to the goals
Typical first year results for fully committed organizations include a 30% reduction in WIP.
of the business. Meaningful measurement of individual and team performance is being
The average plant produces 9 million msf this would represent a savings of more than
developed. Internal communication has been improved and the quality systems are used
$2000 per day. Efficiency of ink usage has typically been improved by 33%. For the same
to prevent problems from reoccurring. Workers are recognized for exemplary behavior
plant this translates to a savings of 100k per year. Machine capacity has also increased
and face real consequences when they hold back the team.
between four to eight hours a day. If the sales are there to fill the capacity then the
productivity of the plant increases by 1600 hours per year. There are many more
examples of waste reduction that create capacity the first year. Endurance is required
because they do not readily show on the P&L.
Finally Lean standards and objectives are a part of company leaderships’ performance
evaluation. They take responsibility for the way they get things done. Some have gone so
far as to hold themselves accountable that they conduct yearly Lean audits which include
all departments in the Lean enterprise.
Willingness to risk. These Lean leaders recognized a compelling need to change in
order to survive or thrive. They each made a commitment to wholesale and planned
43