Before and After: A Study of Nomacorc s Lean Journey

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Regina Lane
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Before and After: A Study of Nomacorc s Lean Journey How Nomacorc leaned into a world class facility Tom Shank Gary Strickland Tom Shank Supply Chain Manager at Nomacorc, LLC in Zebulon, NC Nomacorc

1 Before and After: A Study of Nomacorc s Lean Journey How Nomacorc leaned into a world class facility Tom Shank Gary Strickland Tom Shank Supply Chain Manager at Nomacorc, LLC in Zebulon, NC Nomacorc is the worldwide leader in the manufacture and distribution of engineered foam wine bottle closures 20 years manufacturing experience with a focus on lean processes and end to end supply chain management Active APICS participant in chapter and education actvities APICS CPIM and CSCP certifications BBA and MBA degrees Resident of Raleigh, NC 1

Gary Strickland Global SIOP and Logistics Manager at Nomacorc, LLC in Zebulon, NC Nomacorc is recognized as the industry leader in operational excellence and continuous improvement through execution

2 Gary Strickland Global SIOP and Logistics Manager at Nomacorc, LLC in Zebulon, NC Nomacorc is recognized as the industry leader in operational excellence and continuous improvement through execution of leansigma best practices throughout the value chain. Over 15 years operations and supply chain experience BS, Business Administration East Carolina University Six Sigma Green Belt Certification Supply Chain Advisory Board Member East Carolina University Seven Profit Busters The Original 7 Wastes Overproduction Motion Inventory Making Defective Products Waiting Transportation Over Process 2

3 We are very successful, BUT.. Inconsistent lead time 2 to 16 weeks Inventory t turns low 9 Overproduction 35% of warehouse consumed by eventual obsolete materials Batch Processing Multiple forms of WIP and excessive locations Talent waste Daily and excessive expediting activities What Technique Lean or Six Sigma? You Need BOTH! Six Sigma Deals with the rocks/boulders in your pathway variations. Lean Deals with progress of movement through the whole journey (i.e. flow) down the river. Lean Six Sigma techniques are integrated and are best used together! 3

How we started the journey madness 1) Ownership and

management 2) Provided leadership and direction 3) Education and

state vision developed (VSM) 5) Bottleneck biggest burst =

4 How we started the journey madness 1) Ownership and accountability at highest level sponsored and lived by executive management 2) Provided leadership and direction 3) Education and clear communication at all levels 4) Current state map and future state vision developed (VSM) 5) Bottleneck biggest burst = Conversion (customization) 6) Kaizens to drive continuous improvement Clear Vision 4

5 Some Lean Sigma Tools Used Lean Kaizen 5S Kanban Standard Work Visual Management Value Stream Mapping Process Flow Diagram Six Sigma FMEA Pareto Diagrams Process Capability Fishbone Diagram Gage R&R DOE What made our kaizens effective? 1) Detailed charter define success 2) Dedicated resources allocated only job 3) Cross functional and cross shifts 4) Implement improvements during event Goal is NOT to create 90 day action list 5) Report out attended by senior management Commitment of organization and accountability 5

6 Visual management at work Orders are sequenced to cells Visual management at work Skills Learning Rewarded 6

7 Visual management at work Continuous Improvement Culture A day in the life 5S and Flow as Foundation 7

8 Changing Quality Culture Corrective Corrective Action System Product Auditing Root Cause Analysis Static Alarming Proactive Preventive Action Failure Mode and Effects Analysis Process Capability Process Auditing Pre-Control Short Consistent Delivery Demand Driven Schedule Extrusion Printing Treatment FIFO FIFO Shipping Process Flow In process Kanban Supermarket Single point scheduling Customization Process 100% make to order environment Eliminated batch processing 8

9 How to spend your time Top Management Middle Management Supervisors Front Line Associates Engagement and Empowerment The right people in the right positions Capable, aligned, knowledgeable, and empowered Chaos High Performance No Engagement Frustration 9

All manufacturing is governed through flow cells 5S, GMP, HACCP and Visual Management are integrated as one Orders sequenced to

10 Nomacorc Supply Chain Performance Flexibility Transparency LeanSigma SIOP Nomaport SCOR Model Plan Source Make Deliver Return Results to date Today, entire site operates on pull methodology: Customer orders pull all product movements through facility All manufacturing is governed through flow cells 5S, GMP, HACCP and Visual Management are integrated as one Orders sequenced to cells based on customer demand In process kanbans in place, managed by cell operators Continuous improvement culture accelerating 10

Growth Continues Million Closures 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1999 2000 2001 2002 2003 2004

Rate 25 20 15 10 5 0 Inventory Turns YTD07 YTD12 Increase of 13 Inventory Turns 8 6 4 2 0 Delivery Lead time Weeks YTD07 YTD12 75%

11 Growth Continues Million Closures 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, Key Performance Indicators Safety Incident Rate YTD07 YTD12 72% Reduction in Incident Rate Inventory Turns YTD07 YTD12 Increase of 13 Inventory Turns Delivery Lead time Weeks YTD07 YTD12 75% Reduction in Lead time 13,000 12,000 11,000 10,000 Productivity Corks/Labor Hour YTD07 YTD12 13% Increase in Corks per Labor Hour 11

12 Operational Sustainability Journey Driving Environmental Sustainability into Business Conduct & Responsibility Continuous Improvement Journey Energy Water Packaging Opportunity: Opportunity: Opportunity: Electrical Energy usage across manufacturing facilities Rising pressure to reduce water usage in operations Action: Redesigned water baths systems & procedures WIP & finished goods packaging fiber reduction Action: Invested in reusable & returnable containers Emissions Opportunity: Tightening controls on air emissions Waste Management Opportunity: Increase cradle to cradle instances Materials Opportunity: Reduce raw material usage in product design Action: New generation products utilize lower levels of LDPE Transportation Opportunity: Reduce CO2 usage in product transport Action: Implemented rail transportation as preferred mode of transport 12

"Value Stream Mapping How does Reliability play a role in making Lean Manufacturing a Success " Presented by Larry Akre May 17, 2007

"Value Stream Mapping How does Reliability play a role in making Lean Manufacturing a Success " Presented by Larry Akre May 17, 2007 LAKRE 2007 1 Lean Manufacturing What is Lean Manufacturing? A philosophy