Implementing lean on a leaner budget

by Staff
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The long-term benefits of Lean are evident and significant. Large manufacturing companies such as Toyota and General Electric, service industry innovators such as Bank of America, and many more organizations are reporting and demonstrating the benefits of Lean. It seems however, that the news-making beneficiaries often have deep pockets. To this point, Rick Tucci and Bob Crescenzi in their article, "The Lean Path to Lean Six Sigma Deployment" describe Lean as a high stakes gamble because deployment is designed and implemented with heavy front-end costs.

There are cost effective ways to deploy and sustain Lean. For smallto mid-size meat and poultry processors Lean should be implemented in a manner that has substantial business rewards each step of the way.

Leaner Lean comes out of many industrial and manufacturing change initiatives. The Lean approach has succeeded recently with three multi-million dollar change projects. These projects were not officially called Lean, rather terms such as continuous improvement, performance improvement or cultural change were employed. Sometimes things improved. Sometimes they did not. Always a lot of money was spent.

Recently, several food processors with annual gross revenues of $150 million or less have been implementing Lean. Profit margin among the firms is about 5 percent. These food processors must approach Lean in a manner that quickly pays for the project. If implemented in small increments with solid and simple metrics, continuous improvement becomes infectious. Not having deep pockets sometimes makes you think more creatively. A savvy and innovative application of Leaner Lean is where the smaller meat and poultry companies need to head.

Let’s review some of the Leaner approaches to implementing a Lean Project. Over training is a huge waste. It comes in two packages. One package is training too many people. It may not cost that much for the trainers but the cost of 10 or 20 employees sitting in classrooms can add up quickly. The other package is training on all different Lean tools, principles and concepts before a person gets to use what he or she is learning. This is wasted time and money because most people can’t remember much of what they learn in a classroom particularly if the classes continue for several days.

The Leaner approach to training would start with a one hour lunch describing and discussing the seven wastes. The group would be the selected line leader, supervisor, plant manager and a consultant. After the discussion the participants should deploy to the selected manufacturing line and conduct an audit. After lunch the audit timing should coincide with restart. Are operators waiting for raw material? Are operators back from their lunch break? Are they making effective adjustments? Does the maintenance mechanic have to go back to the shop to get tools? Are tools and equipment readily available? What is the biggest drag on throughput? Is there rework? The audit should provide real problems to discuss. After the audit, the consultant leads the problem solving session and helps set priorities. The group has now been partially trained on seven wastes, and experienced a mini-kaizen. Further training can follow this format. In short, have a briefing, review, do, learn, measure and try again.

Traditional Lean deployment starts with a significant amount of analysis. This approach can be very effective. Assessment of past throughput, rework and downtime can focus a Lean project. The ROI begins to drastically invert however, when analysis begets more analysis. Leaner Lean must guard against this all too common pattern.

The Leaner approach uses data to isolate the big problems for one line. Take two or three weeks of data and make a judgment. Throughput is a prime example. On a recent Lean project, overall throughput efficiency was rated at around 25 percent. Some similar plants with identical equipment were doing 56 percent. The first focus was on line one of the plant. That line made 2 lb. bulk ground beef. The goal of the Lean project team was to bring the No. 1 line to the benchmark efficiency of 56 percent within two weeks. This decision took 10 minutes. The decision was not perfect. It certainly did not include trends that could be picked up over a year’s cycle of production. Most importantly, however, there was a goal. The comptroller said it best: "We finally have a stake in the mud. It’s not perfect but it will be crystal clear if we make our goal or not." By the way, the team did not meet the goal. It missed by 16 percent. However, throughput on line No. 1 increased by 15 percent. In hindsight, 15 percent improvement over the span of two weeks was very good.

The decision making in traditional Lean implementation often becomes the function of a select few individuals. Only green belts, black belts and the "trained" can make LEAN decisions. The problem with this thinking is that those that do the work, day in and day out, are often excluded. Not only does this exclude those directly affected, but it immediately stimulates resistance to change.

Leaner Lean requires that the small Lean project team listens to workers. When ideas have high potential and low-cost, implement. This is swift and sure reinforcement and respect for workers. It is the best way to sustain a Lean project because the goal is "continuous improvement" to increase profit without an increase in price. The Lean project team will need all the help it can get. Inclusion is a formula for sustaining Lean principles and tools day in and day out.

Traditional Lean implementation spends a lot of time waiting for project resources and decisions. During a recent LEAN project, one team leader designed a cart for equipment and parts. The intent of the cart was to minimize start up time by ensuring that equipment and parts were stored, cleaned and staged for efficient assembly. In Lean terms the team leader had applied 5S. This cart was an important change. The problem was that in the traditional LEAN method, the cart was designed to be fabricated of stainless steel, discussed for a week, sent out for bids, delayed and shipped late after a snow storm.

Using Leaner Lean would have made a fast and cheap version of the cart. We could have bought a plastic cart with adjustable shelves, made or bought plastic bins, fastened bins down with ties and been ready to go. Most importantly we would have learned if the design worked. Another example of moving faster and learning faster occurred when a different team leader simply used the existing carts in a different part of the plant. This team leader arranged parts, so they fit on the existing carts and were organized. The time and initial effort here was about an hour. Sustaining the parts organization required steady supervision until the operators’ had the habit of disassembling equipment into an orderly cart. No money was spent but start-up time benefited.

Traditional Lean projects often waste time and money by purchasing project tracking software and other special support tools. This seems to be a favorite of process improvement experts, but beware. No software program can fix a broken or inefficient system. Processors should be able to track Lean initiatives with a pencil and paper.

Lean does reap cost savings. Traditional approaches can cost plenty of time and money. Furthermore, the traditional approach may disengage the very workers that must sustain the LEAN principles. Processors operating on lean budgets should consider implementing Leaner Lean. Leaner Lean must be implemented with executive sponsorship and strong leadership in the plant. If plant leadership demonstrate a willingness to listen, learn, do, adjust, communicate and measure results, Leaner Lean will make significant contributions to the bottom line.

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