Lean and green. By Elizabeth Peters U.S. commercial growers particularly. nurseries can. Production techniques

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1 Lean and green Small improvements in the production process, such as the placement of machinery or the distance workers must move to perform an action, can make a huge difference in terms of efficiency, according to proponents of Lean production systems. It s easy to see how such principles apply in a nursery setting. nurseries can BENEFIT from Lean Production techniques By Elizabeth Peters U.S. commercial growers particularly those in the greenhouse business have been paying a lot of recent attention to something called Lean. It s not surprising. Green industry companies are reporting process improvements in the range of 20 and 30 percent after applying Lean systems in production operations. They re saving money and making better use of resources. Simply put, Lean is a transforming system that focuses resources and energy on producing value and eliminating waste. All types of organizations can benefit from thinking Lean, because the heart of the approach is determining your company s value to your customer. Lean asks you to think in terms of the product or service for which your customer is willing to pay. Everything else is considered waste, which not only adds cost but has zero value. Customers don t pay for waste; you do. Lean is also known as the Toyota Production System, It began with Henry Ford s flow production, which is a foundation of Lean manufacturing. After World War II, when Japan was recovering from the war s crippling effects, Toyota began the difficult process of creating more with less. In so doing, Toyota s leaders built a company whose culture embraces continuous improvement. Today, Toyota stands as a clear leader in the auto manufacturing industry. Changing the world The term Lean was coined in 1987 by MIT researcher John Krafcik to describe the unique combination of production, product development, supplier collaboration, customer support, quality, and management systems that Toyota had pioneered. Lean came into the public s knowledge in 1990 when James Womack, Daniel Jones and Daniel Roos published the results of the first global assembly plant study in The Machine That Changed the World. I first heard about Lean several years ago from Greg Peters, now president of Goodrich Aerostructures. In the early 90s, Greg had the opportunity to participate in the company s transformation using Lean systems. It was a journey of continuous improvement, which has now become integral to their company culture. It has delivered jawdropping results over the years. The most dramatic improvements were made in the first few years of applying Lean principles at one of its manufacturing plants. According to Colin Cramp, vice president of quality and technical compliance, the company was close to bankruptcy and facing the threat of closing the operation. In 1994 we weren t on our customers supplier lists the company was experiencing a crisis of survival. Leaders made a conscious decision not to continue down the path of traditional fixes and began what they deem their continuous improvement journey. The first year we decided to set a radical goal of doing twice as much work in half the time, Peters said. People 40 SEPTEMBER 2009 DIGGER 39

2 LEAN thought we were crazy. But we grossly underestimated the level of waste we could eliminate that first year. We were able to accomplish much more than that. Since 1992, the company has decreased the number of days needed to manufacture product by 71 percent. It has had a 38 percent reduction in needed facilities, 26 percent reduction in square feet, and has reduced their workforce by 63 percent. At the same time, the company has earned a 426 percent (not a typo) increase in sales per employee, and a 90 percent increase in overall sales. While the Toyota Production System, by its very name, suggests that it applies only to production, diverse industries and processes have found success with it. One recent example is a dentist applying the principles to his practice in Florida. The time to treat patients has gone from 100 days to 10 days, demonstrating that when the principles are applied, the results will be achieved. Last year, the Oregon Association of Nurseries sought ways to help bring Lean tools to Oregon s nursery industry. Goodrich Aerostructures, having a fundamental Lean competency the best in the world beyond Toyota, generously allowed us to visit one of its facilities, participate in training, and learn about this system which has transformed many companies across the world. Where to begin: Value The cornerstone of Lean is customer value. Lean thinkers maximize value while minimizing waste. Easy to say, not so easy to do. Many organizations have difficulty grasping the value they bring to their customers. And when you begin to observe processes from the perspective of real customer value, you find that waste is everywhere. Lean thinking begins by identifying value and non-value (or waste) in any process. Tasks that add value are those for which your customer is willing to pay. These actions transform or shape 40 SEPTEMBER 2009 DIGGER

3 Figure 1: Value-Added / Non Value-Added Work Analysis ELEMENT DESCRIPTION VA NON-VA Comments 1 Stand Up X 2 Walk to fax machine X 3 Pick up fax X 4 Walk to desk & sit down X Different route 5 Read through material X Different formats 6 Call sender for clarification X 7 Calculate data for customer X 8 Log on to PC X 9 Open program X 10 Enter data into program X PC crashed 11 Wait for PC to compile data X 12 Hit print button X 13 Walk to printer X 14 Pick up document X 15 Walk to supervisor's office X 16 Give report to supervisor X Wait outside office 17 Wait for signature X 18 Answer questions from supervisor X Non job related 19 Walk to fax machine X 20 Fax document to customer X 21 Walk to copier X 22 Make copy X Change toner supply 23 Walk to file cabinet X 24 File copy X 25 Walk to desk & sit down X 26 File copy in desk X TOTALS 2 24 Courtesy of Goodrich Industries Managers at Goodrich Industries, an aerospace company, analyzed different workplace tasks to determine which did and did not add value for the customer. materials or information to meet your customer requirements and they re done right the first time. Non-value added tasks are those which take time, space, and other resources but don t add value or aren t done right the first time. Lean companies examine processes, listing each step in detail. They then determine whether or not the step is value-added or non-value added. Here s an example that Goodrich used to illustrate how they do this: There are seven types of waste: inventory, overproduction, transportation, processing, defects, waiting, and motion. Looking at the office example above (Figure 1), one can quickly identify six of the seven types of waste in the non-value added tasks. Inventory Traditionally, inventory means protection for a company. It provides a buffer of either completed or raw product to supply processes to meet customer demand. However, Lean thinking views inventory as one of the most serious types of waste. It ties up cash, hides problems in production, and wastes space that costs money and could be used for value-added processes. In a business office, inventory means having more information on hand than we or the customer needs right now, such as unneeded stored records or office supplies. Overproduction Batch production or pulling orders ahead are examples of overproduction. Many growers process in batches, however, Lean thinking works toward constant flow in an operation, with the perfect amount of supply and product for each step of the process. Overproduction can also mean creating and forwarding reports or communication that no one reads, or making too many copies of paper items. Transportation Within an organization or between the company and its customer 42 SEPTEMBER 2009 DIGGER 41

4 LEAN Joseph Kroetsch Propagation Manager Jim McConnell demonstrates how workers use a device for sticking cuttings. The equipment was designed as a result of a Kaizen event at the company, through which several forms of waste were removed from the process. Employee participation was important for the success of this improvement event, which increased production by 100 percent. the movement of a product decreases its value and elevates its cost. Visually mapping out the steps in a process and the flow of product can help an operation identify transportation elements and make improvements. Bailey Nursery in Yamhill drew on paper the movement of workers through a process of sticking cuttings in a bed. Seeing the path on paper was one step toward reducing transportation waste and improving the safety of their workers. Processing The waste of processing means doing things that are beyond the customer s scope of work, or having two processes that could be combined into one. Again in the previous example above (Figure 1), the supervisor s signature is a non-value added series of steps that could be eliminated by providing adequate knowledge and authority to the employee, allowing him or her to complete the process entirely. Defects Variations, miscalculations, rework, and scrap are wastes that many com- panies regularly deal with. Lean thinkers establish processes that reduce the number of defects through employee training, providing right-sized tools and equipment, and balancing workloads to reduce employee fatigue. Waiting Waste happens when employees are waiting for direction, inspection, responses or actions from others, or information. In my office, waiting is common. When I turn on my computer in the morning I wait approximately one minute for the log-in screen. I enter my information and wait another 30 seconds for the log-in to complete. Then I launch my program and wait another 1.5 minutes for the mail to arrive for a total of three minutes each day, just for the ability to read my electronic mail. At Oregon s current minimum wage, that would equate to approximately $108 of waiting time annually. Motion This form of waste happens when workers are searching for items, retrieving tools, reaching, or walking. 42 SEPTEMBER 2009 DIGGER

5 TREES FOR LIFE Recommended resources: Lean Thinking: Banish Waste and Create Wealth in Your Corporation, by James P. Womack and Daniel T. Jones, Free Press The Toyota Way, by Jeffrey Liker, McGraw-Hill The Lean Enterprise Institute One Cambridge Center, Cambridge, MA / At a kaizen event last fall at Goodrich Aerostructures, ( kaizen is the continuous, incremental improvement of an activity to create more value with less waste) I witnessed a team s observation and subsequent reduction of motion for a group of workers that resulted in simply adjusting the position of a stationary tool about 10 inches. That one improvement, if implemented across all workstations, was estimated to save the company $250,000 over the course of a year. Understanding value A lean company understands the value it brings to its customers, and targets its processes to continually provide more value. Identifying these activities is one aspect of Lean that a nursery business can utilize to grow its position in the marketplace as we work our way back to an improved economy. Back in 2003, James Womack and Daniel Jones wrote in the book, Lean Thinking, Recessions are precious things because they shake conventional wisdom and motivate managers to make hard choices. Today s recession offers us terrific opportunities to make improvements that benefit our companies and our customers. I think the hardest choice for many of us is simply starting the process. If we do, I m convinced we ll see astonishing results. Proven Performers of Shade, Ornamental & Conifer Trees 1 3/4" to 8" caliper B&B stock Expertise from Years of Growing on 450 Contiguous Acres Knowledgeable, Efficient, Friendly Customer Service EF NURSERY INC Providing Landscape Professionals with Superior Quality, Exceptional Service, & Consistent Availability. ROOTING COMPOUND Soluble Concentrate Continued excellence from our family owned company for over 30 years WOOD S ROOTING COMPOUND Our unique formula uses only the highest quality ingredients which results in instant absorption of both IBA & NAA to your cuttings. 3 Convenient Sizes: 4 oz. / Pint / Gallon Call Today For A Distributor Near You SIZES! Elizabeth Peters is director of publications and communications at the Oregon Association of Nurseries. She can be reached at epeters@oan.org. P.O. Box 327 Wilsonville, OR SEPTEMBER 2009 DIGGER 43