Engaging All Employees to Eliminate the Eight Wastes

Engaging All Employees to Eliminate the Eight Wastes Abstract Charles Aubrey Vice President, Anderson Pharmaceutical Packaging, USA Kaizen means continuous improvement in Japanese. It has become closely linked to the lean manufacturing or lean enterprise approach as a method to continuously improve and eliminate waste on the shop floor. However, this approach is also very effective on the office floor as well. Kaizen is usually done within a department or a production line and is not cross functional. The team that conducts the Kaizen event may be cross functional depending on those suppliers or inputs to the area under analysis and the customers or outputs of the department or line. Kaizen events, as they are called, can be held in several formats. One format is to block two days up to a week, depending on the size and complexity of the operation or administration area. Ideally, we want the area or department to continue functioning so the Kaizen team can observe the work activity while we carry out the Kaizen process. It is popular to do the event just prior to a weekend. This allows for all low hanging fruit or easy fixes to be put in place over the weekend and the operation to start on Monday morning with a new layout, new tools, revised SOPs and job instructions, etc. This gives the area a fresh start. There are always longer term changes that will need to be approved and implemented in the next 90 days or so. An alternative format is to conduct half days either consecutively or skipping days in between. The decision depends on which format disrupts the production or administration workflow the least. The Kaizen event is to a great extent, very similar to implementing process management in a work unit. Very often process management has been completed in an area. Work activity such as process maps, identifying customers and critical to quality (CTQs) elements as well as metrics may already be in place with data. If process management is not in place then a Kaizen event will also complete these activities. These process management activities assure standardization and accountability for the conformance to customer requirements CTQs. The objective of Kaizen is to improve the performance and eliminate the waste in the processes. This can only be accomplished if a standardized process is in place to be improved, leaned and re-standardized in order to hold the gains permanently. The presentation will provide the best practices for conducting Kaizen events which will be evidenced by measurable results from dozens and dozens of events from both manufacturing and service/administration. In addition, best practices for Ongoing Kaizen teams is to continue to operate after the event which will be described. Key Words Kaizen, Waste, Lean, Continuous Improvement, Empowerment

Introduction Kaizen means continuous improvement in Japanese. Kai meaning small, ongoing good and zen meaning good, for the better. Kaizen has become defined as many small improvements generated by first line, front line workers. These come about by organizational leadership that respects and trusts first line, front line employees to have good ideas to improve the organization just like higher level professional or managerial employees do. The necessary components are to provide structure, facilitation, tactical tools and time. Lean manufacturing or the Toyota Manufacturing System has included Kaizen as a mainstay of continuous improvement for well over 30 years and has spread to hundreds of thousands of manufacturing organizations. Reports of 30-90% improvements in productivity, less than 2-3 defects per million units produced or 2-3 parts per million in quality, billions of dollars in cost savings and significant reductions in cycle time, lead time, inventory levels and huge increases in customer satisfaction. However, in many manufacturing organizations, organizing the support, service and administrative staffs (often rolled up in overhead ) dwarf the manufacturing costs. Some estimate non-manufacturing costs to be as high as 50-90% more than manufacturing costs. Not only that, but simply by the stroke of a pen they can do more damage then any defect in manufacturing can cause. These non-manufacturing support, service and administrative cost let s call them office expenses have largely gone

unnoticed and not addressed. These include areas such as Sales, Customer Services, Order Processing, Engineering, Planning, Purchasing, Materials, Management, Warehouse, Shipping, Accounting, Human Resources, Security, Training and Information Technology. Few organizations have addressed them, but an Office Kaizen with a similar approach to manufacturing Kaizen can yield large rewards. Methodology The methodology and approach for both manufacturing and Office Kaizen events is about 80+% the same. We will discuss the events in a generic way first and then identify how and why Office Kaizen differ. Kaizen events are usually done within a department or a production line and not cross-functional (multiple departments or a whole value stream). The area must be selected in advance as pre-work must be accomplished. This involves data collection, line layout or process maps, and staffing. Ideally, the department or line continues to run during the event so the Kaizen team can observe operation to identify waste and improvement opportunities. Once the area, dates and staff are selected a simple charter is drafted to formalize the process. Important charter areas to discuss are the objectives or where to focus our efforts, the scope or where the process starts and stops and any part that is out of scope (e.g. changes to the IT system) and the goals or what is expected to be accomplished, usually numerical (e.g. reduce scrap by 60% or lead time by 25%.) Pre-work includes pulling historical data: volume, productivity, quality, lead time, errors or scrap, staffing, downtime, on-time delivery, rework, etc. Any detailed data that

currently exists from one to six months. Also finding or preparing production line layouts or process maps (for office). In manufacturing typically two to five 8 hour days are blocked for the team to be trained, identify waste and improvement opportunities and solutions. This depends on the size and complexity of the operation. In the office this is usually not possible due to both work flow and the size of the office staff. In this case one full day then skipping a day or a week or half days consecutively or skipping days can work. In total it will still be necessary to use two to five days. It is popular to do the event just prior to the weekend. This allows for moving of equipment or desks etc. over the weekend if recommended and approved so the area can have a new standard process on Monday morning. Our format for most events is three days. We include at least one person in each job description including a supervisor and any key support personnel who may not be actually in the department. For example, in manufacturing we included one each of each line person plus a mechanic, a quality inspector and possible a warehouse person. For the office we might include an IT person and a key person from an area that feeds and/or receives key items from the area being Kaizened. On day one we start with a senior management review of the charter to kick off and show the importance of what we are doing and the sincerity and commitment to implement the Kaizen teams recommendations. We present an overview of Lean Enterprise emphasizing standardization (where the Kaizen process starts) and the line layout or major process maps (office). We end with 5S. Then we go onto the line or

office area and do a 5S assessment. We take still and motion pictures as appropriate and then return to the classroom or conference room to debrief. This is the beginning of building our matrix of recommendations for senior management. Next, we discuss a SIPOC. This helps us identify the inputs and outputs and the requirements we expect from the inputs and the requirements those that receive our output expect. Next we introduce the actual Kaizen/DMAIC process. This gives them a sense of what will happen over the three days and the output expected of the Kaizen team. We emphasize the eight wastes and then return to the line or office area to observe, document and photograph the occurrence of waste. We end the day debriefing, continuing to add to our matrix of recommendations and start to build a story board with the pictures to present to senior management at the end. Day two starts with new perspectives to identify waste by looking at the drivers of waste, spaghetti diagrams, the six big losses, load leveling and non-value added activities. They are introduced to the operations and analysis worksheet and how to document work for analysis to apply these techniques. We practice with some classroom examples then we assign each team member to the person on the line or department who is actually performing their job. They observe that person actually performing the job, document what they observe and return to the classroom to analyze their findings and identify improvement recommendations. After the analysis discussion we debrief and add to our recommendation matrix. Next the team is introduced to their actual detail data (identified in the pre-work). As we discuss the data and what it means we introduce the team to Pareto Charts, Time Plots and Frequency Plots. Depending on the data we have, we choose the most

appropriate tools and break into sub-teams and they chart the assigned data on flip charts. We discuss what the charts are telling us and write the definitions and learnings on the charts. These will be presented to senior management at the end. More importantly, we go back to our recommendation matrix and discuss what data each recommendation will impact or make the performance better on the charts we have drawn. We are trying to build an understanding of how data can be used to identify improvement and also be used to see the improved performance when the recommendations are implemented. When we finish the Kaizen event and move to Ongoing Kaizen they will have similar charts on their Kaizen Board which they will update and use to identify other improvement opportunities and see the results of these recommendation and new recommendations they make. Over the first two days a number of problems which defy an easy obvious solution surface. We put these on our recommendation matrix without specific recommended solutions. We introduce the team to Cause and Effect Diagrams and the 5 Why concept. Again, we break into sub-teams and have them apply these tools to the most pressing problems without solutions. Upon completion we discuss and debrief and add our new found root causes and potential solutions to the recommendation matrix. In order for us to present the best recommendations we discuss mistake proofing, autonomation and visual standards and controls. We make a final visit to the manufacturing line or office area to identify any last issues, improvements and additional pictures to tell our story. Our recommendation matrix is finalized and copied for all participants. The team decides which are the most important recommendations to present

to senior management and which team member will present each recommendation. As the three days have been unfolding and the issues identified the facilitator has been inviting the appropriate senior managers to the Wrap-Up Discussion. We want those executives in attendance who can make the decisions on the recommendations. The wrap-up meeting starts with introductions, the charter and walking through the line layout or major office processes. Then the team presents the data, graphs and charts, the implications and how they are interpreted. Then the most important recommendations are presented by each team member and the senior managers react to each recommendation yes, or no with an explanation why or OK but need further information to make a decision. Senior management makes some positive motivating comments and thanks everyone for their contributions. The team debriefs and is happy about all the approved recommendations. The facilitator now has the approved recommendations and has a meeting with all the departments that need to implement the recommendations and sets time tables with them. They also meet with the team and assigns team members to actions the team is responsible for with a time table. The facilitator will now monitor and get feedback when items are complete. This usually takes 30-90 days to complete everything and close out the Kaizen Event. Listed blow are examples of Kaizen Events over several years and their results that saved almost $1 million annually. Table 1: Manufacturing Kaizen Events Manufacturing Events Kaizen Team # Ideas Generated/ Approved Highlights Bottling 8 54 Install red lights on all major equipment to better identify down equipment Pouching 8 35 Increase lighting for

packers inspections Cartoning 8 37 Install 5S Placards for better organization Repack 9 93 Revise line layout and material flows, standardize c/o procedures Blistering 5 38 Over processing of blisters Staff Reduction Blistering 8 47 Need Lot out instructions Decrease Lot out time Warehouse 7 50 Install more mirrors and walk way dots for safety Bottling 9 50 Replace arbors, evaluate roll lifting, splicing opportunities Blistering 5 34 Material handling, flow improvements Bottling 8 51 Revise material flow, Quick adjust tooling (SMED) Bottling 7 41 Add sensors, mirrors, 5S Blistering 7 38 Re-balance workload Bottling 9 30 Modify capper to reduce scrap/dt, train Pouching 9 33 Create training line and est. crew rotation Blistering 9 33 Conveyor replacement, 5S Blistering 8 26 Sensors adjust, vibrations eliminated Blistering 7 26 Change line configuration/ reduction in staff Bottling 8 33 Installed radios quicker response time Table 2: Office Kaizen Events Office Kaizen Events Kaizen Team # Ideas Generated/ Approved Information Technology Administrative Office Highlights 12 15 A major information system installation effort went smoothly and on time for the first time. 9 25 An increase in output by almost 50% and reduction of cycle time by almost 50% - increased capacity and delayed hiring. Customer Service 8 31 Reduced headcount by reducing non-value activities by 6 people out of 32 and increased the actual customer contact time available.

Sales 5 28 Improved same day customer response time from 74% to 90%. Increased Customer Satisfaction by 30%. Order Processing 6 32 Order accuracy from 95.3% to 99.8% and improved order processing time by 30%. Warehouse/ Shipping 8 20 Process time to fulfill orders was reduced by 15%. Engineering 5 35 Drawing approvals in Engineering were reduced from 53 to 13 and in production from 48 to 17 with an annual savings of 9,900 hours or $315,000/yr Sales Orders 3 38 Process steps cut by 50%, 13 from 26 and costs were reduced by $126,000 annually. Sales Order Changes 4 25 Time per change was reduced from 7.5 to 2.75. Research 5 12 Response time reduced by 40% and studies were completed on average 5 months earlier. Clearly this approach has a significant financial performance impact. Also, the behavioral impact is significant in terms of employee satisfaction due to the respect, autonomy, empowerment, training in new skills and two-way communication. This behavioral impact can also pay huge dividends as employees are happier, more loyal, more dedicated and willing to continue to bring additional ideas to management. The Kaizen events are followed by Ongoing Kaizen. This is providing Kaizen Boards with the department or production line metrics, the line layout or process maps, a place to put ideas anytime, a brainstorming pad, a cause and effect diagram and a status report for supervisors to follow up on recommended ideas. The line or department is given at minimum 20-30 minutes per week to identify, analyze and recommend improvements and waste reduction opportunities. It is their supervisor s responsibility to

seek approval or bring back why not s to the team. The facilitator makes sure these meetings are held and supervisors play their role of Champion of the ideas for the team. Conclusion Of course nothing happens unless the leadership provides structure, discipline, time, training, facilitation and the cooperative support of the organization. It is necessary to have one senior leader believe in and support the process to get started with the above resources. It starts with one Kaizen event then a second and a third, etc. The eighth waste is a human mind. If you are not involving everyone in your organization in eliminating waste and identifying improvement opportunities you are wasting valuable resources. Kaizen is a competitive advantage that organizations today cannot afford to miss. References Aubrey, C.A. (1992). Involving Employees in Productive and Quality Improvement. Milwaukee: American Society for Quality Press. Imai, Masaaki (1983). Kaizen: The Key to Japan s Competitive Success. New York: McGraw-Hill Publishing. Liker, Jeffrey K. (2008). Toyota Culture: The Heart and Soul of the Toyota Way. New York: McGraw-Hill Publishing.