MANAGING TIMES
March/April.07
S h a r i n g
S o l u t i o n s
f o r
Y o u r
L e a n
J o u r n e y
Sappi Warren Uses LeanSigma速 to be Anything But Run of the Mill
6 How do adults learn?
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8 Culture: a strategic weapon for business survival.
Save green by being green.
PUBLISHER’SNOTE
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anufacturers who succeed in a demand economy must be able to respond to the highly enabled customers of the 21st century. Leaning your business to improve responsiveness to ever-changing customer needs is the only way to embrace and capture this web-savvy, highly educated, want-it-now, in-control market. In a demand economy, a company exists to solve customer problems. This is in direct contrast to the narrow product/service supply-side mentality that still drives many organizations. Manufacturers who are stuck in a supply-side economic model rely on their own vision and timetable to design, produce, and sell products and services for customers. Let’s say your company sells office products and services to businesses. Your supply-side strategy defines your offerings as pens, paper, files, printers, software, telephones, and other tangible products. When you look to grow your business, you expand into similar areas such as office furniture and printing/copying services. Your business is defined by what your company typically sells, what your customers typically buy, and what your competitors offer or don’t.
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Succeeding in a Demand Economy
In contrast, lean, responsive, and agile companies operating under a demand-side strategy rely on value innovation to differentiate their products and services from those of their competitors, but they don’t stop at a narrow definition of existing customer needs. If you work for a demand-side-strategy office supply company, you identify key customer segments and spend time with members of each segment, watching them work and listening to their concerns to uncover unarticulated needs. Let’s say you learn that your small business customers’ biggest issues are the cost of health care, saving energy, and getting their technology to work right. None of these is your company’s area of expertise, but that doesn’t stop you. You partner with a national health care provider to offer a health insurance plan tailored to small businesses. You design an energy-saving program that teaches small businesses how to use energy more efficiently. You offer reliable technology support that guarantees everything will work as expected, whether you sell it or not. Your business is defined by what your customers need to succeed and grow and your own capacity to move swiftly to define and supply it. You may recognize the aforementioned strategy as that of a solutions provider. To succeed in a demand economy, you need to provide your customer not with things, but with solutions. Doing so gives you a serious competitive advantage. You will leap ahead of your competition. What is the foundation on which this strategy will be built? It should be one of lean thinking, responsiveness, and operational excellence. It will ultimately allow you to take command in the demand economy. In this issue, you will see how a process industry company, papermaker Sappi Warren, is using LeanSigma® to address the issues of lead time, quality, and innovation—all elements that help make a company more responsive to the demands of its customers (p. 2).
Because a lean transformation requires people to learn new things, understanding how we learn as adults is critical. Adult learning theory describes why classes or learning programs need to be structured differently if they are to be effective (p. 6). Successfully transforming an organization requires certain key attributes to be in place in an organization’s culture. Those attributes will determine how much improvement will be made and successfully sustained over time and whether the continuous-improvement effort will be a true and lasting transformation (p. 8). As customers and investors become more attuned to environmental issues, manufacturers will also need to be more cognizant of environmental concerns. Read about how one company, Mansfield Plumbing, found that being greener was good not only for the environment but also for the bottom line (p. 10). The companies profiled in this issue recognized that they couldn’t sit back and do business as usual. They wanted to be responsive to their customers and they found that lean was the means by which to do so. You should do the same.
Anand Sharma, President & CEO TBM Consulting Group, Inc. asharma@tbmcg.com
March/April.07
MANAGING TIMES
Publisher Anand Sharma: asharma@tbmcg.com Executive Editor William A. Schwartz: bschwartz@tbmcg.com Managing Editor Julie Poudrier: jpoudrier@tbmcg.com Featured Columnists Doug Bonner Nero Haralalka Gary Hourselt Contributors Stacy Aponte-Morris Alfredo Arreola Jerry Curry Donna Hopkins Beth Ann Hunt Tony Lea
Joe Panebianco Anand Sharma
David Pate Gary Rascoe Angela Scenna Dan Sullivan Ken VanWinkle
Art Direction and Design IONA design www.ionainteractive.com Printing Carter Printing & Graphics, Inc. www.carterprintingnc.com Published bi-monthly in Durham, NC 4400 Ben Franklin Boulevard Durham, NC 27704 TBM Consulting Group, Inc. is the sole licensee of LeanSigma®, a registered service mark of Maytag Corporation If you would like to receive this journal via email, send your vital information including email address to tbm@tbmcg.com On the cover: The Sappi Warren paper mill in Westbrook, ME, has been in operation for more than a century, making release papers for the synthetic leather and synthetic fabric industries. By using a LeanSigma® approach and keeping the entire value stream in mind at all times, the mill has made significant improvements in lead time and quality, and ultimately plans to improve the design process as well.
David Lloyd, previously general manager of Argos’ Distribution Centre in Barton has been appointed General Manager of John Lewis San Distribution Centre. Terry Maher of Argos’ Distribution Centre in Barton has been appointed as continuous improvement development manager. … Tektronix’ lean deployment champion Kathy Jones recently retired from the company, located in Beaverton, OR. Mike Badnin has been tapped to take her place. Mike’s title is LeanSigma® deployment manager for worldwide manufacturing. … Jim Grimes has retired as Hubbell Corporation’s vice president of operations. Lou Pizzoli will be taking over the reins from Jim as Jim enters a well-deserved retirement. Lou’s duties as vice president of manufacturing operations will include heading up Hubbell’s LeanSigma efforts. … Sealy Mattress South Region has several new continuous improvement coordinators: Luis Colon in Orlando, FL; Danilo Burgos in Fort Worth, TX; and T.J. Naik in Conyers, GA. Jack Swain, former continuous improvement coordinator in Orlando has been named the regional manager, based in Conyers. … Rick Gawenda has been named KPO manager at Scholle in Northlake, IL. … Scott Vannarsdall has been named KPO manager at LinkBelt in Lexington, KY. … Tiffany Mullis-Brittain, director of communications at Vanguard Furniture in Conover, NC, gave birth to a boy, Brooks Hayward Brittain, on March 2. Congratulations to the Brittain family. … TBM welcomes its newest consultants, Jim Privette, who has joined Carl Deeley’s consulting Team, as well as Jakub Konopczak in Poland and Tharcisse Decker in France. Both Jakub and Tharcisse will be working out of the TBM Europe office in Geneva, Switzerland.
Congratulations to the Vitoria Mercedes Benz Plant of DaimlerChrysler Espana SA for winning first place among all European Mercedes Benz plants by achieving a qualification level of 86 percent for implementation of the DaimlerChrysler Production System (DCPS). The plant’s KPO received an evaluation of 100 percent in the elements considered in the DCPS. While the plant credits TBM’s help for its success, the achievement is the result of great teamwork, excellent support from the managerial and direction areas of all the plants, the facility director, and Armando Gaspar, presidente de centros industrials, Daimler Chrysler Espana SA. … TBM’s India office officially opens in April. The address is TBM Consultants (India) Private Ltd., “Technopolis,” Sector-54, DLF Golf Course Road, Gurgaon, India 122 002.
PUBLISHER’S NOTE. LEAN COMMUNITY NEWS
A publication of TBM Consulting Group 800.438.5535, www.tbmcg.com
LEANCOMMUNITYNEWS
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CASESTUDY
Sappi Warren Uses LeanSigma to be Anything But Run of the Mill By Doug Bonner, TBM Senior Management Consultant
W hen you think of paper, you
Over the past three years the mill has reduced unplanned mechanical downtime by more than 50 percent, which means the equipment’s running when we want it to run a lot more. We’re running with less inventory, and our service levels have improved.
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probably think of writing letters or perhaps reading a book. You probably don’t think about your car’s dashboard or your daughter’s patent leather shoes. Paper is used for more than just writing, though, and Sappi Warren’s Westbrook, Maine, mill creates papers for use in making such things as automobile dashboards and synthetic leather shoes, purses, and belts. These specialty papers are known as release papers. They are used as molds to impart certain characteristics to synthetic fabrics and leathers and then are peeled away (released) from the final synthetic product. This is how an alligator-skin pattern is created in synthetic alligator-skin belts or the classic shine is created in patent leather shoes. The process by which release papers are made is much the same as any papermaking process. Wood is pulped to separate the wood fibers from the lignin, and those wood fibers are washed, bleached, refined, cleaned, pressed, and dried to ultimately become the paper with which we are all familiar. At the Sappi Warren mill in Westbrook, the paper is also textured and receives a release coating. Sappi Warren’s customers take that paper and cast liquid vinyl or polyurethane on it. Once the liquid has set, the paper is peeled away and the vinyl or polyurethane retains an impression of the paper to become synthetic fabrics and synthetic leathers. The faux leather look of the dashboard of your car was probably made on release paper. The Sappi Warren mill has been in operation for more than a century and a half. Warren release papers were invented around the time of World War II as a means for casting vinyl draperies and shower curtains. Today, the Westbrook mill still produces release papers for a variety of uses.
Starting the Continuous Improvement Process John Martis is managing director of the mill. Martis came to Sappi with some lean transformation experience gained while at Perfecseal in Philadelphia, as well as several other places. When he joined the Westbrook mill, he ran the classic release product line. Martis says, “At the time our lead time was about six weeks, and we were losing market share. We were losing a lot of business because there was a domestic company that could deliver faster. Since I had some experience with lean manufacturing in the past, I knew that if we used the tools right we could cut the lead time down and improve profitability. So I talked to the mill manager at the time, and he gave me the latitude to go ahead and do it. The first thing we did was work on the changeover time on one of the coaters because that allowed us to reduce our lot sizes and get our responsiveness up. “Then we started working on 5S and some total productive maintenance (TPM) events to try and get the workplace organization and housekeeping squared away,” he adds. Addressing waste through 5S helped. The teams also started to develop supermarkets so that the WIP inventory could be better managed. They also set up finished goods supermarkets so customers could be better serviced without overly complicating the warehouse process. TPM has been instituted throughout the mill. Martis says, “Over the past three years the mill has reduced unplanned mechanical downtime by more than 50 percent, which means the equipment’s running when we want it to run a lot more. We’re running with less inventory, and our service levels have improved.”
sappi
Westbrook’s KPO John Hoering joined the mill as a chemical engineer right out of the University of Maine, Orono, in 1982. He has since held a variety of jobs, from various technical assignments and projecttype work to operations management and supervision. Hoering says, “Our first real lean project here was in 1994. We created a cell and we created some work flow, but it was really too early for the organization. They didn’t know what it was about; they didn’t know how it was supposed to work. In the end it didn’t contribute very much and it got lost. So now we’ve come back at it again with much greater success. “For this effort we’ve got the direction of our plant director John Martis, and we’ve got support from TBM,” he continues. “We’ve also gotten good buy-in from our leadership team as more and more folks come on board and understand why we’re doing this. So we’re seeing some good results.” The Westbrook mill began its lean journey in earnest in January 2004, starting with what Hoering calls “the clean-up part of things” and has had a fairly steady project schedule ever since. Hoering says, “We had an awful lot of inventory crammed between process steps, and there was a real jumble of stuff going on. It was rather a difficult knot to begin to untie. So we started untying it by first reducing our inventory levels.” Inventory reduction allowed them to better see what was going on at the individual steps and between them—it created better line of sight. They implemented some visual controls and started cleaning up the place. They counted on the lean process to help sustain those changes.
The Westbrook mill is now taking a multipronged approach to its lean activities. Low-hanging fruit is being addressed as opportunities arise. At the same time, a value-stream view of all activities is maintained. Work done in one area might actually show a benefit in a different area, and maintaining that value-stream approach enables everyone to keep sight of that bigger picture. In that way, they can work toward optimizing the whole process and not just a small part of it. “That’s something I think we’ve always been aware of, but the lean tool kit is now helping us get at it,” says Hoering. “We work as a team to fill the value-stream maps and we recognize that one area may do work whose benefit doesn’t show in that area. Lean is helping us to take a more ‘global’ view and get away from the silo sort of mentality that may have existed in the past.” By using a LeanSigma approach, the mill has doubled its value-added time while cutting the total process time in half. Lean improvements have allowed the company to take business back from its domestic competition. Martis notes that some advantages gained include improved efficiencies, cash generation by keeping inventories down, and the ability to bring a product to market quicker.
Lean and ISO Go Hand-in-Hand The Westbrook mill was ISO certified 9001 in 2002 before the plant began its lean initiative in earnest and became 14001 certified in 2005. “In getting through the ISO certification process we were forced to build a higher level of discipline around document control and that sort of thing,” says Hoering. “Those things have been very helpful in sustaining improvements in that
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CASESTUDY we have a system that we can keep our standard work in. We have a process management system that we can build our improvements into.” Martis adds, “We have only one process that we use for addressing environmental issues and quality and we are in the process of rolling safety into that as well. This means we have one top-tier manual, one set of SOPs, and one set of corrective actions or integrated action responses. “To coordinate ISO with lean, we work hard to understand what the common mission and vision is and for the most part once we agree on what our goals and objectives are, people start executing toward the goals, and it’s not that complicated of a process really,” Martis adds. So the discipline of the ISO certification process has helped the mill to clarify and streamline its policy deployment process as well. “Lean makes it easier to maintain our ISO certification,” Martis says. There’s a certain amount of effort that goes into gaining certification, but both the ISO 9000 and 14000 certifications have a continuousimprovement element as part of the ongoing certification process. This requires you have to have some sort of methodology documented for continuous improvement.”
CASE STUDY
Seeing Quality Improvements in a Process Environment Most of the continuous-improvement projects undertaken at the plant include a quality aspect. Martis notes that lean has helped the mill become more attuned to what’s causing variation, which translates into better external quality. Hoering adds, “We have seen measurable and significant quality improvements in the areas where we have focused our LeanSigma efforts. We know that when we apply the tool kit and when we use it
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correctly we can make a big difference. A challenge is that there’s a whole bunch of places where we need to make quality improvements and we haven’t gotten to them all yet. But as time passes, our management team is more apt to seek out support for applying LeanSigma tools to some of their quality issues.” Bringing about any change, and especially quality improvements, is a tough road in an ancient facility with old equipment. Dealing with quality problems in a process environment is difficult because unlike in a discrete environment, where a simple change (like changing a die) has an immediate and observable effect, in a process environment the results of a change at one point in the process might not be immediately visible and might actually be observable only through a measurement system and maybe even only further down the process line. Says Hoering, “We need to see [changes] through our control charts and by measuring process capability, which can take a long time. Some of the root-cause things that we need to get at are much less visible, and it is very difficult to see where in the process some of the problems arise. “To find root causes, we must collect data and use more sophisticated rootcause-analysis tools. It takes more time and more patience. It takes overcoming some preconceptions about where problems come from. It’s just a whole other layer of complexity, and I think some folks underestimate the difference between at least our process environment and the discrete environment in that regard. Some of these problems are really hard to figure out.”
But both Hoering and Martis comment that LeanSigma has provided the mill with the tools to start making quality improvements, despite the difficulties inherent in addressing a process situation. One of those tools is TPM. According to Hoering, one of the keys to the mill’s success in addressing quality is the fact that the mechanical condition of mill equipment is important to product quality. Although up time is important, the physical condition of the equipment used to produce the paper has a significant impact on paper quality, so TPM allows the mill to improve quality simply by maintaining old equipment in good working order. Cultural Change in a Union Environment Because the Westbrook mill has existed for 150 years it has a unique culture that has been around for a long time. The average age of employees is 53. Both the organization and the individual employees have been papermaking for quite a while, and change doesn’t always come easily. “I think of what we do in every kaizen event as an opportunity to nudge our culture a little bit and get us thinking in different ways about what we need to do and why we need to do it,” says Hoering. He notes that older employees may be a little harder to change on one hand, but on the other they have an enormous amount of experience and knowledge that can be tapped into and used for growth and driving change. “It’s a real asset. I think the key for us was tapping into that knowledge and experience and putting it to work instead of letting it become another part of the cultural barrier,” he notes. The kaizen process helps drive cultural change by getting operators to think about solutions in different ways. The
end result is that employees are happier and more engaged because they are allowed to put their knowledge to creative use to solve problems. Being in a union environment can be a special challenge when it comes to cultural change. Hoering advises communicating up front with union leadership. Let the leadership know what you’re doing and ask them to be a part of it. Rather than viewing the union as a single entity he recommends approaching individuals, engaging them and showing them why the organization is doing what it’s doing and why it’s important to each individual. Hoering says, “Every kaizen event or interaction is an opportunity to bring about cultural change.” Looking Forward As the Westbrook mill adds up continuous-improvement successes, the lean initiative is evolving out of the manufacturing floor and spreading across the enterprise. Kaizen teams have moved out of the mill and over to the administrative side to address business process issues at the plant’s information technology help desk and in the customer service center. As Westbrook continues to show improvements, the managing directors of Sappi’s other North American mills have taken notice. Hoering has traveled to other plants to help get them started with simple projects like 5S and creating supermarkets. Martis firmly believes that “loaning” his lean staff to these other plants can benefit the entire corporation. Again, good communication plays a role in the spread of lean from one plant to another. Hoering notes that both he and
Martis have been very vocal and proactive in sharing outside of the mill site their progress and the methods they’ve been using, with the hope that the others will latch on to it. “Our results are good enough that they’re coming to us and saying they want to try it,” he remarks. Additionally, the mill is beginning to use LeanSigma tools to address product development. Martis feels that the lean tools can help the mill greatly reduce time to market and be much more responsive to customers. A key element is design for manufacturability. Too often in the past, the mill has put designs out in the market that customers liked only to find that they couldn’t make the product easily. By taking a lean approach to product design he expects to create better products and get them into the market much more quickly. While branching into the design process and striving for administrative simplicity, Martis expects to continue hammering away at the shop floor. “We still have a tremendous opportunity to generate cash by getting our inventories down, and our responsiveness continues to be more sluggish than we’d like it to be, even though we’ve made dramatic improvements,” he says. “We’re also looking at increasing the variety of products by using our existing technology to get into different markets—nontraditional release papers,” he adds. Clearly, LeanSigma has become the “pen” with which Sappi Warren will fill the blank paper of a bright future—mapping a transformation that will lead to ever better innovation, growth, and profitability.
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ACCELERATEDLEARNING
How Do Adults Learn? Joe Panebianco, TBM Senior Trainer and Design Specialist
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Joe Panebianco
ACCELERATED LEARNING
The role of the instructor is not to strictly lecture the class but to become a guide and a resource for the students and engage the students in the process of inquiry, analysis, and decision-making.
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earning—we have been doing it since we were born and continue to do it throughout our lives. We learn from teachers, mentors, and co-workers, as well as through our own experiences, successes, and failures. We learn in school, on the job, at home, and in our churches. So let’s define learning. Learning is an activity that increases the capacity and willingness of individuals, groups, and organizations to acquire and productively apply new knowledge and skills. Such learning empowers individuals, expands their world, and increases their ability to shape that world. The way to increase a person’s capacity for learning is to set learning objectives that are beyond the individual’s current limits of knowledge. Behavioral objectives need to be set to motivate or create a willingness to apply what has been learned. When applying these concepts to a company, both the learning objectives and the behavioral objectives need to be aligned with the organizational objectives. This is true whether you are talking about a safety program, quality control procedures, or continuous improvement. This is important in any organization, but especially in one that is implementing LeanSigma®. Not only are there the many concepts and principles of LeanSigma that must be learned and applied by everyone in the organization, but as processes change and improve, jobs and the skills needed to perform them also change. This requires additional learning by members of the organization. So we must be prepared to be both students and teachers during these changes. Having a better understanding of the issues, motivations, and requirements for adults to learn benefits everyone involved.
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earning
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How we learn as adults is different from how we learn as children. Adult learning theory describes how adults learn and why classes or learning programs need to be structured differently than the classes we attended as children if those classes are to be effective. Adult learning theory is a framework for educators and trainers. Malcolm S. Knowles (1973) was among the first proponents of the idea that adults learn differently than children. In his book The Adult Learner: A Neglected Species, Knowles created his unified theory of adult learning. In the three decades since that landmark book was published, his ideas of adult learning have become widely espoused and applied across the board—from colleges to corporations. Facilitated Learning As we mature into adulthood, we prefer self-directed learning opportunities. The role of the instructor is not to strictly lecture the class but to become a guide and a resource for the students and engage the students in the process of inquiry, analysis, and decision-making. Think about some of the learning experiences that you may have had as an adult. Classes that were strictly lecture were probably boring unless you were learning material that was extremely interesting to you personally or the speaker was incredibly dynamic. On the other hand, classes that involved learning through examples, exercises, simulations, and other students probably were more interesting. In those classes, the instructor acted more like a facilitator than a traditional teacher: stimulating the students’ desire to learn and guiding them through the process; balancing the presentation of new material with discussion, debate, and the clock; and all the while creating an environment where the students felt comfortable sharing and asking questions.
Experiences Count The experiences that we gain throughout our lives provide a rich resource for learning. Adults will learn material quicker and retain it longer if they can relate it to experiences in their past. The opposite is also true: if the material being taught is, or appears to be, in sharp conflict with what is already believed to be true, the old beliefs will need to be reevaluated before the new material can be integrated. This conflict will inhibit the learning process if the existing beliefs are too strong and their conflict with the new material cannot be resolved. That is why it is important for curriculum designers to know whether the concepts or ideas will be in concert or in conflict with the learner. This will allow them to design instruction to effect a change in belief and value systems. Because adults learn better when they are active participants in a class, courses should be structured so that they draw upon each individual’s past knowledge, with class members encouraged to share their experiences. Discussion, exercises that require problem solving or analysis, and their application to work or life situations are at the core of the methodology for creating training material for adults. Need-Driven Learning Adults are most interested in learning a subject when they have an immediate need in their job or personal life. As adults go through changes in their lives, such as marriage, becoming a parent, retirement, a new position at work, or the loss of a job, these changes become the impetus to seek and obtain training that is relevant to the change. The new skills we obtain— originally learned out of necessity—are an emotional support as well as a way to cope with or adapt to the new changes in our lives. Depending on how aware the adult is of the need for change and his current skill set, he may seek the training before, during, or after the life-changing event. In some cases, it may even be necessary to convince adults that the change is a certainty before they will recognize the need and accept the help that the learning activity will provide. Learning for adults is needs-based: the learning is a means to an end, not an end in itself.
Practical Application As we discussed above, adults learn because there is a need for the additional knowledge or skills. Once they have obtained that knowledge, they want to apply it immediately and solve problems. Adults are competency-based learners, meaning that they want to learn a skill or acquire knowledge that they can apply pragmatically to their immediate circumstances. Life- or work-related situations present a more appropriate framework for adult learning than academic or theoretical approaches. Therefore, regardless of the media used, straightforward how-to is the preferred style for the presentation of the course content. Adults respond well to simulations, especially those that present the student with a scenario built around situations or tasks that they can relate to in their personal or professional lives. By understanding the motivations and requirements behind adult learning we can better help our employees get the training that will help them succeed. By incorporating the concepts of adult learning into our LeanSigma training and the resulting organizational transformation, we can better leverage our employees’ capacity for learning. We set the stage for a more sustainable continuous-improvement initiative by creating an atmosphere in which what is learned is useful, and its effects are lasting.
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STRATEGICVISIONING
LeanSigma® Culture: A Strategic Weapon for Business Survival By Gary Hourselt, Vice President, TBM International and Strategy Practice
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RADICAL STRATEGIC VISIONING
Gary Hourselt
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oo often, we work alongside executives and managers who view a LeanSigma or any continuous-improvement undertaking only as a cost-reduction effort. This usually results from a predominately short-term focus and thinking of the costs incurred in the improvement effort as expenses. Companies like Toyota have used the concepts of lean and Six Sigma as part of a bigger transformation that results from longer term thinking and the realization that the cost of the improvements are an investment in business survival. This way of thinking results in real cultural change that has lasting impact on the competitiveness of an organization. Eleven key attributes of an organization’s culture determine how much improvement will be made and successfully sustained over time and whether the LeanSigma or continuous-improvement effort will be a short-term project or a true and lasting transformation. These key attributes are values, leadership, communication, worker engagement, teamwork, performance awareness, clear linkages, operational excellence, reward and recognition, risktaking, and a culture of learning. The absence of any of these key attributes, or even some weakness in any of them, will lead to any of a number of things that can derail a LeanSigma or continuousimprovement transformation. When any of these are missing or significantly weak, the following symptoms will occur, and these will make sustainment nearly impossible: • Lack of trust • Lack of accountability • High employee turnover • Poor attitudes and morale • Resistance to change • Lack of vision • Lack of teamwork • Short-term vision to the exclusion of long-term execution • Lack of discipline • Lack of capable people • Lack of capable processes • Lack of capable equipment • Beliefs and behaviors that are out of sync In this issue and in upcoming issues, we will further explore each of the eleven key cultural attributes of a successful and
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sustained LeanSigma or continuousimprovement transformation. Values Walk into the offices of almost any company and look at enough of the wall space and you will probably find a framed statement of the company’s values hanging there. You’ve seen them. “We value our customers.” “Above all, we value our people.” “We value integrity.” “We are committed to long-term growth.” “Safety is our first priority.” You get the idea. The management teams who write these truly believe what they write. Too often, though, their behaviors don’t match their beliefs and the only evidence of their beliefs is found hanging on the wall where no one is paying much attention most of the time. Your company’s employees, customers, and suppliers know what the company’s values are by observing the everyday behaviors of your leadership, consistently applied. Some of the more important behaviors that prevail among the leadership in a maturing, sustaining LeanSigma culture are the following: • Honesty is paramount. • People are treated as appreciating assets. • Efforts are focused on eliminating waste, not on finding fault with people. • Efforts are focused on finding the root causes of defects, not on blaming people. • Doing what has been promised to every customer is expected. • Profit is not viewed as the primary goal, but rather the result of meeting continuous-improvement objectives. • Objectives for the longer term success of the business are at least as important as objectives that are expected to have short-term results. • Accountability is demonstrated by the continuous emphasis on developing countermeasures rather than coming up with reasons as soon as things don’t go as expected. • Transparency is standard operating procedure. • Credit for success and gains is shared. What are your leaders telling your employees, customers, and suppliers that your values are? They will be “hearing you” through their eyes.
A Lean Value Chain: The Key to Your Success
FUTURES
By Anand Sharma, TBM President and CEO
emerging nations” are placing even more cost pressures on manufacturers. Many have already turned to lean and the tenets of the highly touted Toyota Production System to transform their businesses into creative, customer-centric, and responsive organizations—achieving operational excellence on the shop floor. But still the pressure mounts. Many may be tempted to try to eke savings out of supply-chain relationships. But beware of trying to improve your own margins by expecting them to absorb the costs while still supplying you with products at the quality and rate you need. What’s more likely to happen is that in order to meet your demands but still remain viable, your suppliers will have to cut corners, and those compromises will likely affect the integrity of the parts you receive. Who loses in this scenario? Everyone does, and especially your end customer. When thinking about strategies for remaining competitive in an increasingly complex manufacturing world, look all around you at every element of your value chain. A lean value chain is a business enterprise system that synchronizes the resources and information flow across all components of the value chain to achieve mutual growth in sales and profitability. It allows you to give your customers what they want, when they want it. It is a means of creating collaboration between customers and suppliers and enabling you to manage demand more efficiently. Internally, you reduce total system cost by minimizing individual costs like raw materials, finished goods inventory, staffing, and space while eliminating the interface inefficiencies among the value-chain participants. It all depends on a holistic relationship within your lean value chain. If you’d like to make your lean value chain your ally, four key areas must be considered: • Demand management, which allows you to gain visibility to true customer demand. • Order fulfillment, which enables you to respond quickly to customer needs.
• Supply management, which creates superior value in your supply chain through alignment of supply relationships and developing process and materials flows. • Business planning and scheduling, which allows you to pull it all together to connect and synchronize the entire value chain. An effective and synchronous lean value chain can help you gain the game-changing advantage you need to lead your market. Leaning your value chain offers a number of advantages, including improved system-wide working capital, which generates free cash flow; the ability to respond more quickly to customer demand; and the ability to offer a superior price/value proposition. If you can create a community that together takes more waste out of the total value chain, you can capture more of the profit in it. If you focus only on your suppliers, you overlook the dealers, distributors, and other channel partners that often mask the real opportunities to bring effective solutions to targeted customers. These channel partners can be mistaken for the real customer and siphon off a disproportionate share of profitability. How do you know that your company could benefit from a closer look at your value chain? If you have excess pipeline inventory, long lead times, erratic demand, poor on-time delivery, price variances, and limited visibility across your supply chain, then leaning your value chain is urgent. By taking your lean transformation to the next level—creating transparency, which can be achieved by simply opening your eyes to all the people and processes involved in getting your products to your customers and then seeking excellence in all those areas—you can transform the competitive landscape to your advantage. In the next issue, leaning your value chain will be discussed in greater depth.
If you have excess pipeline inventory, long lead times, erratic demand, poor on-time delivery, price variances, and limited visibility across your supply chain, then leaning your value chain is urgent.
Note: Versions of this article were originally published in both The Manufacturer and Manufacturing Today, Europe Edition.
FUTURES
Globalization and the new “competitive
Managing Times | March/April.07 www.tbmcg.com/news/newsletter.php
9
TECHTALK
Resource Conservation: Save Green by Being Green Nero Haralalka, TBM Senior Management Consultant
T
TECH TALK
What this project really amounted to was recognizing waste and addressing wasteful processes.
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he value of considering resource conservation, specifically energy conservation, when looking for ways to improve a business’ performance was presented in the most recent issue of Managing Times. In this issue, we will take a slightly different look at resource conservation—reducing, reusing, and recycling. Mansfield Plumbing’s Perrysville, Ohio, plant produces more than two million vitreous china plumbing fixtures per year for commercial, institutional, and residential use. The company also has plants in Big Prairie, Ohio, and Henderson, Texas. In addition to china toilets, urinals, and lavatories, the company produces plumbing fittings, bathtubs, shower bases, and kitchen sinks. The Mansfield plant in Perrysville is a large pottery operation. Clay slip (liquid clay) is poured into molds for various styles of toilet tanks and bowls, and once dry, is touched up (e.g., seams smoothed), glazed, and kiln fired. The sheer volume of products being produced at the plant requires massive amounts of clay, water, and glaze materials. As you can imagine, it also produces its share of waste. When the molds are filled with slip, any overage is drained into a holding tank and pumped back into the main slip tank. The holding tanks are quite large, and because of the tank and pump design, a layer of slip remains on the bottom. Because the clay would eventually harden, slowly filling the tank, slip that remains in the bottom of the tank is regularly washed out into one of the plant’s two holding ponds. Even an inch or two of slip in the bottom of one of these large tanks accounts for a large amount of clay. The holding pond water, which contains anything washed from the plant, needs to be treated before it can re-enter the city water system. Additionally, any clay build-up on the pond bottom must be dredged out at regular intervals and disposed of at a landfill.
Each load taken to the landfill costs the company money for transportation and disposal, and those costs can add up quickly. In addition, the plant was spending money to treat the water that was going to be returned to the city water system. Wastewater treatment and landfilling costs added up to a lot of money. When we looked at the amount of slip and glaze that had been used compared to what was required over the past year, we found that use was often more than 120 percent in any given month, depending on what was being produced and in what color. Much of the overage was saved, but a lot was also sent to the wastewater system. One issue was that the valves on the pipe systems that allowed the slip to be either returned to the holding tank or sent to the pond were not clearly marked, and sometimes workers would not close a valve properly when the pumps were turned on, allowing slip intended for return to the tank to be instead drained to the pond. As mentioned earlier, the sheer size of the drain tanks also meant that some good slip was routinely washed down to the pond. Glaze, on the other hand, is mixed in large tanks, and whenever a color change is necessary, the tank is washed out. Likewise, glaze overspray was also washed into the holding pond. When we started this kaizen project, our scope was to reduce waste by 50 percent. The first step was to clearly mark valves by function and create standard work to minimize operator error. Next, we considered the pumps and valves themselves and determined that we really didn’t even need to have lines going to the pond for every application because in some cases the amount of waste was small and could easily be scraped out of a holding tank by plant operators and returned to the slip tank instead of using the pump-and-drain system. We then looked at the waste produced by
smoothing the fixtures when they are removed from a mold. The process involved using running water and also generated a lot of clay dust, all of which was being washed into the pond, and ultimately moved to the landfill. We created a baffle system in the drains in that area to capture the clay dust so that it could be disposed of directly, rather than being sent to the pond to undergo the treatment process. In effect we were removing an unnecessary step in the disposal process, since the clay wouldn’t need to enter the pond and wastewater treatment system before disposal. Greenware (unfired clay) that has been removed from molds also requires trimming of excess clay at the mold seams. Traditionally those wet trimmings and foot hole punchings (the holes used for attaching the toilet to the floor) would just hit the floor. This clay is re-usable, and just by collecting it instead of considering it trash, we were able to save 97,000 pounds of clay per year from the trimming line and another 14,000 pounds from the foot-hole punchings. In the trim area and others, the water often ran continuously, even when it wasn’t being used for a particular process. Addressing that issue provided both “front end” and “back end” savings: adding fixtures that modulated the flow of water was a direct form of conservation of clean water, and in so doing, we also prevented additional water from unnecessarily entering the pond and wastewater treatment system. We also found that in some cases, we didn’t need the large holding tanks that were being used in some areas of the plant, and so we downsized some and eliminated others altogether. In the downsized tanks, the savings is simply a matter of math. If your pumps can’t get the bottom inch or two of slip, but the tank has a smaller footprint,
then less slip will be left in the bottom to be treated as waste. The tanks were a unique issue because they were under the plant floor and so became something of an “out of sight, out of mind” phenomenon. And yet they were a huge source of clay loss that ultimately was easily addressed. Then we looked at all the rinsing applications. Operators were using fresh water for applications where it was suitable to re-use captured rinse water. Again, this simple change—reclaiming rinse water— resulted in a significant reduction of the amount of wastewater going to the pond (and the cost of storing rinse water was much lower than using fresh water and sending it to the pond for treatment). What this project really amounted to was
recognizing waste and addressing wasteful processes. Any time you have a large operation that requires large amounts of materials and uses processes that have been handled in a traditional way over long periods of time, it can really pay to look at those processes and see where it’s possible to reduce, reuse, and recycle. By doing this, you not only save your company’s financial resources, but you also help to reduce your company’s impact on the environment. It’s not difficult to save green by being green.
Managing Times | March/April.07 www.tbmcg.com/news/newsletter.php
11
FIELDNOTES
Mensor Takes Sustainment to the Next Level
Since its founding in 1969, Mensor has
FIELD NOTES
I was greeted by a rare sight; the Fluke cell was not only sustained, but had been improved.
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Managing Times | March/April.07 www.tbmcg.com/news/newsletter.php
been dedicated to the design and manufacture of the highest accuracy pressure measuring and controlling instruments and test systems available in the precision pressure market. Mensor’s portfolio of products consists of an extensive line of precision pressure instruments, including digital gauges, pressure calibrators, transducers, and pressure calibration systems. These products are used worldwide in metrology labs, calibration labs, and research facilities, as well as in production test standards and in other environments where high accuracy pressure measurement or control is required. Mensor is an ISO 9001 certified company, and its calibration laboratory is accredited by the American Association for Laboratory Accreditation (A2LA). In 2006 Mensor was acquired by WIKA, a privately held company with headquarters in Klingenberg, Germany, that specializes in pressure and temperature products for a wide variety of applications and industries worldwide. Mensor launched its lean journey with TBM in July 2006. The first event was conducted in the Fluke pressure module cell. Alexander Wiegand, chairman and CEO of WIKA, recommended this cell because it had the highest production volume of any product that Mensor manufactured. The event was pronounced a success by Paul Neilson, president of Mensor, who proclaimed at the Friday presentation, “This lean is great stuff! Lean is a very effective tool in addressing the three most important issues for our customers—quality, cost, and delivery.” More impressive than the event results of lead-time reduction, productivity gain, and implementation of a point-of-use and the two-bin material replenishment system was the subsequent “super sustainment” of that inaugural lean event. On my return visit for the second event, I was greeted by a rare sight; the Fluke cell was not only sustained, but had been improved. During the kaizen event a temporary soldering fixture was built to improve the soldering of the leads to the
pressure sensors of the modules. A new and redesigned holding fixture, machined from aluminum, was built after the event. Also, an unresolved issue during the event was storage for an unbroken box of pressure module bodies. That issue was no problem for these sustainment champions. An additional shelf was constructed that allowed the point-of-use storage of a full box. A crudely made computer stand had also been replaced by a suspended computer support, which in turn freed up valuable space to allow full use of the production bench. Paula Molina and Flori Shearer, Fluke production technicians, were all smiles as I surveyed the Fluke cell on my return visit. I was kindly reminded that I had been told that they would sustain the gains made during the event. Was this sustainment a “fluke”? November 2006 came around and I returned for a third visit and third kaizen event. What did I find? You guessed it! The cell looked great. I didn’t find a single problem during my 5S assessment. But the benefits didn’t end with the Fluke pressure module cell. Sustainment in the second cell that we created for the Mensor Model 600 Automated Pressure Calibrator was also outstanding. Goodnatured competition between the cells had motivated both to take 5S to the next level.
[They] were all smiles as .I surveyed the Fluke cell on my return visit. I was kindly reminded that I had been told that they would sustain the gains made during the event. Congratulations to Robert Clayton (director of production and engineering), Rally Salazar (production manager), Paul Neilson, and all the Mensor Kaizen Team members for a great demonstration of sustainment taken to the next level! This level of sustainment certainly indicates the high level of commitment at Mensor. —Jerry Curry TBM Senior Management Consultant
Using a Card System for Standard Work Documentation
I
n the last issue of Managing Times I described a card system for standard work for process set up to take advantage of variable numbers of people available to perform a change over. I had several requests for a visual representation of the cards we used in that system, which I have included here. As a reminder of the original story, we were working on setup reduction in a process industry plant. We wanted to identify the particular elements to be accomplished, the sequence in which they were to be accomplished, and who was responsible for completing them, for both external and internal tasks.
We decided to use a card system for standard work to ensure that all elements would be completed in the right sequence and as many trained operators as were available could be used. Each work element was placed on a laminated card along with the sequence of that element, a picture of the task, the time required to perform it, any tools required, and any safety considerations. Each card had thin magnets attached to the back to adhere to a metal “setup board.” The team determined that there should be three colors: green for external elements, red for internal elements, and yellow for startup/system-fill elements.
Line #4 Chageover Standard Work Sequence INTERNAL
Element Number: Task Time:
6
Task:
Risk DB Tanks and Lines
13.5 minutes
Safety Equipment: Hardhat, Steel toe shoes, safety glases
The board has three color-coded columns on which cards would be placed to visually indicate their status: scheduled, in-process, and complete. Before changeover, all of the cards would be arranged in order in the “scheduled” column. As tasks are performed by any operator, they are moved to the “in-process” and “completed” columns. Any available operator could select the next card from the “scheduled” column and perform that task.
Process Picture
—David Pate TBM Senior Management Consultant
Tools Reqired: 1 1/4’ wrench
Lead the Way: TBM Lean Certification To be recognized as an effective lean practitioner in today’s challenging and competitive marketplace, an individual must be able to demonstrate measurable results that drive profitable growth. Organizations that achieve such results must dedicate time and resources to learning, seek opportunities for continuous improvement, and be willing to drive change. People who have been successful change agents stress the importance of gaining experience through quality instruction, personal application, and “critical path” mentoring. TBM’s LeanSigma® Institute has created a challenging lean-certification curriculum for companies that wish to develop in-house expertise to guide their organization through a lean transformation. All coursework is delivered through an effective blend of personal involvement, skills demonstration, and interactive mentoring.
To earn a Lean Certification, the TBM LeanSigma Institute requires a serious commitment on the part of each participant as well as those who sponsor the participant. Students will be mentored by a TBM lean veteran and will graduate with hands-on experience and knowledge in the following critical areas: • • •
•
Developing a lean transformation and a go-forward plan for a site or business Identifying and completing a project that guarantees at least a 3x–5x instant return on your training investment Application of a basic lean tool kit that includes the fundamentals of the Toyota Production System along with the most advanced lean tools, such as progressive 5S and poka-yoke Actual kaizen event experience and sustainment skills
•
• •
Ability to apply proven methods, tools, and techniques for tracking and sustaining critical performance metrics against daily production targets Advanced instructor training and exercises to be able to teach, influence, and motivate kaizen teams Completion of a “Personalysis® Performance Inventory,” which helps participants understand their tendencies to perform and be successful in a variety of situations and conditions
If your organization wishes to pursue Lean Certification, contact the TBM LeanSigma Institute at 800-438-5535 or visit the Web at www.tbmcg.com/leancertification.
Managing Times | March/April.07 www.tbmcg.com/news/newsletter.php
13
MANAGING
TIMES
TBM LeanSigma® Institute 2007 Event and Workshop Schedule
Australia 403A 86 Bay Street Port Melbourne, Victoria 3207 Australia 03 9681 7385 Brazil Avenida Moema 170, cj 45 Sao Paulo -- SP Brasil 04077-020 55.11.5051.7490 India “Technopolis” Sector-54 DLF Golf Course Road Gurgaon, India 122 002 +91.98.100.31713 Mexico Calzada San Pedro #250 Nte. Edificio HQ Col. Miravalle CP 64660 Monterrey, NL 52.81.50.00.91.36 Switzerland 29, route de Pré-Bois 1215 Geneva 15 Switzerland 41.22.710.77.70 United Kingdom 3 Gleneagles House Vernon Gate DERBY DE1 1UP United Kingdom 44.1332.367378
Business Process Kaizen Instructor Training May 8-11
Durham, NC
Oct 23-26
Durham, NC
Design for LeanSigma® New Products and Processes June 25-29 Sept 17-21
Durham, NC Durham, NC
Dec 10-14
Durham, NC
Kaizen Breakthrough Experience May 14-18 June 18-22 Aug 6-10 Nov 5-9 Nov 19-23
Hayward Pool Products, Pomona, CA TBD United Kingdom Foldcraft, Kenyon, MN Vermeer Manufacturing, Pella, IA WIKA Wiegand GmbH, Klingenberg, GR
Kaizen Promotion Office Workshop May 21-24 July 3-6 July 10-13 July 17-20
Monterrey, MX Monterrey, MX Durham, NC Shanghai, CH
Oct 2-5 Oct 2-5 Nov 6-9 Dec 11-14
TBD, UK TBD, BR Durham, NC Shanghai, CH
Lean Certification Track Week Week Track Week Week Track Week Week
1 1: 2: 2 1: 2: 3 1: 2:
April 17-20 Durham, NC May 14-18 Pomona, CA
Week 3: June 19-22 Durham, NC Week 4: July 17-20 TBD
May 22-25 Durham, NC June 25-29 TBD
Week 3: Aug 13-17 Durham, NC Week 4: Sept 11-14 TBD
July 24-27 Durham, NC Aug 20-24 TBD
Week 3: Sept 25-28 Durham, NC Week 4: Oct 30-Nov 2 TBD
Lean Leaders Exchange June 6-8 Salt Lake City, UT (with plant tour of Autoliv)
Lean Management Accounting June 24-25 Sept 18-19
Pasadena, CA Durham, NC
Nov 14-15 Durham, NC
Lean Sigma® Fundamentals Sept 11-12
Mexico
Lean Sigma® for Process Industries Oct 24-25
Sao Paulo, BR
LeanSigma® Vision Tour June 18-22 June 26
Des Moines, IA Brazil
Oct 15-19
TBD, US
Management for Daily Improvement May 7-11 May 21-25 Sept 17-21 Nov 12-16
WIKA Instrument Corp, Lawrenceville, GA TBD, Monterrey, MX TBD, Monterrey, MX WIKA Instrument Corp., Lawrenceville, GA
Shopfloor Kaizen Breakthrough Instructor Training May 15-18 June 18-21 June 26-29 Aug 28-31
Sao Paulo, BR Monterrey, MX Durham, NC Durham, NC
Sept 25-28 Shanghai, CH Oct 9-12 Durham, NC Oct 30-Nov 2 UK Dec 4-7 Durham, NC
LeanSigma Vision Tour June 18-22 June 26
Iowa, USA
Oct 15-19
Iowa, USA
Brazil
Sigma Kaizen Black Belt Week 1: May 21-25 Durham, NC Week 4: July 16-20 Durham, NC Week 2: June 4-8 Host Company TBD Week 5: Host Company TBD Week 3: June 25-29 Durham, NC
Sigma Kaizen Green Belt Week 1: May 21-25 Durham, NC Week 2: June 4-8 Host Company TBD Week 3: June 25-29 Durham, NC
Quest for the Perfect EngineTM May 2-3 June 13-14 June 20-21 July 9-10 Aug 8-9 Aug 15-16 Aug 29-30 Sept 4-5
UK Madrid, SP Cincinnati, OH Beijing, CH Dearborn, MI Sao Paulo, BR Shanghai, CH New Delhi, IN
Sept 17-18 Sept 20-21 Oct2-4 Oct 18-19 Nov 13-14 Nov13-14 Nov 13-14 Nov 19-20
UK Paris, FR Pomona, CA (Hayward plant tour) Munich, GR Hong Kong, CH Argentina Mexico Madurai, IN
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