Lean Thinking in Business

1
Lean Thinking in Business

• Presentation by Scott Summach and Colleen
  Mackenzie, Manufacturing Team, Saskatchewan
  Industry and Resources

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Saskatchewan Industry and Resources (SIR)

• SIR is the lead Provincial department to
  strengthen and diversify the Saskatchewan
  economy.
• SIR is divided into Strategic Sector Development,
  Regional and Co-operative Services, and Resource
  Policy and Development

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Strategic Sector Development Branch

• SIRs Strategic Sector Development Branch has
  identified six sectors key to growing
  Saskatchewans economy
• Manufacturing
• Energy
• Minerals
• Forestry
• Agri-value
• Advanced Technology

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Manufacturing Team

• Scott Summach and Colleen Mackenzie represent the
  Manufacturing Team along with support from staff
  within our Regional and Cooperative Services
  Branch Jason Regier in Saskatoon, and Dale
  Mitchell in Regina.

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Manufacturing as a Key Economic Driver

• Manufacturing employees 30,000 employees and
  shipped 7.5 billion in goods in 2003
• Saskatchewan produces a wide range of major goods
  and exports 75 of what we manufacture

6
World-Class Products

• Saskatchewan products that are internationally
  recognized include
• Beef, pork and chicken products
• Paper, furniture, cabinets, millwork, flooring
• Agricultural equipment
• Specialty vehicles such as ambulances, highway
  trailers, recreational vehicles and automotive
  accessories

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World Class Products

• Mining and industrial equipment
• Satellite and landline communications technology
• CATV and wireless telecom products
• Contract manufacturing services for
  telecommunications, satellite, military and
  aviation markets

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Manufacturing Team

• Today, were here to speak about two initiatives
  undertaken by the Manufacturing Team
• Lean Thinking
• Corporate Procurement

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I. Lean Initiatives

• Since 1999 SIR has introduced manufacturing
  companies to Lean Thinking.
• We work with individual companies as well as
  national organizations like the Canadian
  Manufacturers and Exporters (CME) that have
  developed consortium building and lean enterprise
  expertise.

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Lean Thinking

• What is Lean Thinking?
• Simply put, Lean Thinking is a focus on
  eliminating waste so that all processes in the
  total system, process, or production line add
  value from the Customer perspective.

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What Lean is Not

• Lean Thinking is not about
• Staff cuts
• Assigning Blame
• Nominal or one-time changes

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Lean Thinking is About

• Creating a positive and safe work environment
• Empowering all staff to make improvements to
  their processes and workplace
• Encouragement from the leaders of the company

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Why Become Lean?

• In todays global marketplace with a high
  Canadian dollar and trade border issues,
  companies must become more competitive.
• The application of Lean Thinking will reduce
  waste, improve productivity, and give companies
  that competitive edge needed to survive.

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Who Can Become Lean?

• Lean Thinking is applicable to all businesses and
  organizations. You do not have to be a
  manufacturer or processor.

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The Lean Drivers

• Lean Thinking
• Employee Involvement

Customer Success

• Flow
• Elimination of Waste

• Tools to support people and process

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Quality Processes Quality Results
Inconsistent Process
Inconsistent Results
Traditional People doing whatever they can to
get results
Consistent Process
Desired Results
Lean People using standard process to get
results
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The 5 Principles of Lean Thinking

1. Define value from the customer perspective
2. Identify the value stream
3. Make the process flow
4. Pull from the customer
5. Head toward perfection

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7 Forms of Waste

1. Overproduction
2. Waiting (time)
3. Transporting
4. Inappropriate processing
5. Unnecessary inventory
6. Unnecessary motions
7. defects

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Waste Identification Sheet (Office)
Definition
Observation
Type of Waste
Producing more/sooner than the Internal or
External customer needs
Overproduction
Waiting
Long periods of inactivity for people,
information, machinery or materials
Transportation
Excessive movement of people, information or
materials
Inappropriate Processing
Using the wrong set of tools, procedures or
systems
Unnecessary Inventory
Excessive storage and delay of information or
products
Unnecessary Motion
Any motion that does not add value to the
products or process
Defects
Frequent errors in paperwork, product quality
problems etc
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The Lean Journey

• Should begin with Value Stream Mapping every
  process in the company from the first customer
  contact to the delivery of the product is
  examined to determine its value to the process
  and how it can be improved.

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Tools to Make Your Process Flow
Standardization of Processes Pull Systems -
(signal when to start a process) Increase
Visibility Mistake proofing Manage by
exception Minimization of upstream / downstream
impacts Set-up reduction Cellular Processing
Preventative Maintenance Apply Measurement or
Metrics
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PDCA
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5S

• The next step involves figuring out what to
  change and how to change it.
• Japaneses manufacturing plants like Toyota
  established a waste reduction theory we commonly
  call the 5S.

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The 5Ss

• Seiri sort
• Seiton set in order
• Seiso shine
• Seiketsu standardize
• Shitsuke -- sustain

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Sort

• Review the workplace and for each item, ask
• Is it needed?
• How many are needed?
• Where should it/they be located?
• Remove anything that isnt needed for the current
  job.
• Leave only the bare essentials.

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Set in Order

• Arrange items so that they are easily accessible
• Arrange items so they are visible
• Follow everything in its place and a place for
  everything.
• cartoon

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Shine

• Clean everything
• Eliminate all sources of clutter
• Find ways to keep the area clean
• Adopt cleaning as a form of inspection
• Make cleaning a part of everyday work and every
  employees responsibility

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Standardize

• Create the rules by which the first 3 Ss are
  implemented and maintained
• i.e.. Standardize location of all items and
  cleaning schedule and procedures

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Sustain

• Continuous Improvement
• Total employee involvement
• Coaching
• Education

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Success in Lean

• There are many Lean resources available.
• Lean Training is not a one time course, but must
  be a corporate long term commitment.
• In our experience companies have a greater chance
  of success by working together.

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Lean Consortiums

• The Manufacturing Team works with Saskatchewan
  companies to form consortiums of manufacturers
• The Saskatchewan Consortium of Manufacturing
  Excellence
• The Northern Saskatchewan Consortium of
  Manufacturing Excellence and
• The South Saskatchewan Manufacturing Consortium

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Saskatchewan Consortium of Manufacturing
Excellence

• Canada Post
• Cover-All Building Systems Inc.
• Doepker Industries
• Industrial Machine Manufacturing Inc.
• Bourgault Industries
• Schulte Industries Ltd.

• DSI- Thiessen Team MIFAB Mfg
• Northern Steel Industries Ltd.
• Vanguard Inc.
• Precision Metal Fabricating Ltd.

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Northern Saskatchewan Consortium of Manufacturing
Excellence

• SED Systems
• International Road Dynamics
• Dawn Foods
• Burton Cabinets
• Siemens Laserworks

• CNH Global
• Hitachi Canadian Industries
• Norampac
• Standard Machine
• Combine World

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South Saskatchewan Manufacturing Consortium

• Brandt Industries
• Canada Post
• Dumur Industries
• Dutch Industries
• Stewart Steel Inc.
• Ralph McKay Empire
• Watergroup Companies Inc.

• Precision Industries
• Conserva Pak Seeding Systems
• Raider Industries
• Sasko Windows and Doors Inc.
• Sweeprite

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Training Courses

• The CME leads the Saskatchewan Consortium of
  Manufacturing Excellence and the Northern
  Saskatchewan Consortium of Manufacturing
  Excellence
• Training begins with Value Stream Mapping
• Members choose their courses from the following
  examples

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Training Courses

• Introduction to World Class Fundamentals
• Lean 101 Hands on Introduction also High-Mix,
  Low-Volume
• 5S and the Visual Factory
• Lean Set Up Reduction
• Continuous Improvement

• Lean Product Design
• Effective Office
• Lean Purchasing/ Procurement
• Lean Accounting
• Effective Coaching

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The Role of the Office in Lean Enterprise
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Keys to a Successful Consortium

• Non-competing companies
• Membership fees that allow a pooling of resources
  to hire leading consultants and offer training
  sessions
• Membership that decides on the courses offered
  and membership in the consortium
• Members willing to share their best practices and
  learn from each other

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Results

• Some results from our Consortiums
• Reduce Inventory by 56
• Decrease bank debt by 50
• Deliver product in 10 days rather that 2 months
• Engineering time reduced to 2 hours from 2 weeks
• Space requirements reduced by 35
• Space requirement reduced by 200
• Productivity increased by an average of 55

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Results

• Travel time reduced by 75
• Process time reduced by 82
• Inventory turns increased by 40
• Production time reduced by 40
• Gross Margin increased by 105
• Product Cycle time decreased from 4 weeks to 24
  hours
• 6 fold increase in throughput

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Results

• No finished good inventory all goods pulled by
  customer and shipped the day of manufacture
• On time delivery 96.1
• 25 decrease in manufacturing inventory
• Cultural change from traditional manufacturing to
  scheduling based upon product pull
• Staff are involved with the production process
  and allowed to make necessary changes.

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Why Join a Lean Consortium?

• You cannot live long enough to make all of the
  mistakes necessary to implement lean on your own
• It is time to eliminate fire fighting or
  management by crisis
• The sharing of concepts, actions, and results
  with other non competing companies takes company
  performance to a level that is unattainable
  unless expenditures, resources, and efforts are
  all at a much higher level than required in the
  Consortium.

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II.Corporate Procurement Committee

• The Manufacturing Team chairs the provincial
  Corporate Procurement Committee (CPC)
• The CPC consists of members from major
  Saskatchewan corporations representing the
  Crowns, the private sector, and government
  departments.

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CPC Mission Statement

• The Mission of the Corporate Procurement
  Committee is to promote Saskatchewan economic
  growth by developing quality, competitive
  suppliers of goods and services in Saskatchewan.

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CPC Goals and Objectives

• To maximize Saskatchewan content in the
  acquisition of goods and services
• To increase awareness of Saskatchewan supplier
  capabilities
• To encourage the export of goods and services by
  Saskatchewan suppliers

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CPC Goals and Objectives

• To identify opportunities to Saskatchewan
  suppliers
• To maximize Aboriginal content in the acquisition
  of goods and services
• To encourage the implementation of Quality
  Assurance Programs by Saskatchewan suppliers.

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CPC Action Plan

• Meet as a committee five times per year
• Share information on suppliers, new products,
  success stories, and Saskatchewan content
  statistics
• Visit supplier facilities in conjunction with
  meetings

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CPC Action Plan

• Prove information to SIR to maintain databases
  i.e.. Manufacturers Guide
• Share information on policies and programs
• Promote the selective use of offset counter trade
  agreements to support Saskatchewan suppliers.

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CPC Success Stories

• Hitachi Canadian Industries manufacture of wind
  towers for SaskPower
• Del-Air manufacture of pedestals for SaskTel
  and SaskPower
• Country Leather manufacture of leather gloves
  for SaskPower

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CPC Meetings for 2005

• March 17-18 Melfort/Tisdale
• April 28 Saskatoon
• June 2-3 Meadow Lake
• September 22-23 Kindersley
• November 24 Regina
• Interested in presenting to CPC? Call us.

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Conclusion

• The Manufacturing Team would like to work with
  you to grow and expand our manufacturing sector.
  Please contact us for further information on
  Lean, the CPC, or anything else related to
  manufacturing.
• Appreciation is extended to High Performance
  Solutions Inc. for use of their material and
  images.

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Contact Information

• Scott Summach, Manager, Manufacturing Team
• Strategic Sector Development Branch, Saskatchewan
  Industry and Resources
• 206 15 Innovation Blvd, Saskatoon S7N 2X8
• [phone]
• ssummach_at_ir.gov.sk.ca

• Colleen Mackenzie,
• Business Development Manager, (Manufacturing and
  Aerospace/Defense), Strategic Sector Development
  Branch, Saskatchewan Industry and Resources
• 206 15 Innovation Blvd, Saskatoon S7N 2X8
• [phone]
• cmackenzie_at_ir.gov.sk.ca