TBM Case Study - Consumer Products Manufacturer Embraces Lean
TBM Consulting Group, February 2010
Consumer Products Manufacturer Embraces Lean for Customer Focus and Employee Engagement—Improves Value Delivery System Asia-based consumer products manufacturer uses lean to meet changing customer demand with improved flexibility and productivity.
Client: An Asia-based consumer goods plant that manufacturers one million units of a complex product each week.
Challenge: The plant needed to become a more flexible producer in order to meet changing market demands for the wide of variety of its product. The company also wanted to improve productivity while maintaining rigid compliance to standards. The complexity of production and the size of the operation complicated the effort.
Solution: Using kaizen internally and with key suppliers, TBM Consulting Group and the client introduced a continuous-improvement mentality into the workforce while providing a structured methodology and framework for sustaining improvements and uncovering more opportunities for improvement. To improve flexibility in order fulfillment, the plant reconfigured from a typical large-batch line producer with a few densely populated lines to a greater number of much shorter lines with fewer operators and longer takt times.
Results: Productivity at the plant has increased 25 percent, and they now can fulfill any customer order configuration with more efficient deployment of resources.
Efficiency Improves Order Fulfillment
Annual demand for the plant’s main product is about 90 million units globally — and growing as new iterations are introduced. Managers, line employees, support departments and others worked with TBM Consulting Group to achieve substantial improvements in flexibility, lead time, inventory reduction, compliance, SKU management, and other key competitive areas identified in an aggressive improvement plan. By using LeanSigma methodology and techniques, the plant transformed to meet changing customer demand for the many product variations it makes.
The achievement is even more meaningful considering the size and complexity of the operation, which has multiple functions that include hand assembly, painting, sewing, and packaging the units attractively, precisely, and efficiently enough for shipment to retail distribution sites all over the world. Also, the company maintains extremely high quality standards.
“We are very proud of this plant because they crystallized a management vision and drove that vision throughout the organization by engaging thousands of employees at all levels,”
said Martial Durin, Managing Director, TBM China, who worked onsite at the plant. “Consequently, the site transformed its culture by whole-heartedly embracing LeanSigma tools and rapidly driving sustainable improvements in quality, cost, and delivery. They are a model client for other companies in Asia.
Focus: Flexibility, Efficiency and Quality
The parent company created a vision for improvement that focused on flexibility, efficiency and quality. In response the plant set goals that included doubling worker productivity, cutting cycle time, and reducing inventory — all while building-in quality with 100 percent worker-compliance to standards.
The foundation of the change effort was using kaizens internally, plus working with packaging suppliers and internal human resources specialists. The plant identified six projects that TBM consultants later focused on using Lean Sigma approaches. These targeted compliance, inventory, employee engagement, inventory tracking, cycle time and inventory planning. In all, the plant/TBM team conducted over 100 kaizen events in these areas. Some of the most significant improvements included:
- Selective automation was applied on decoration machines to drastically reduce set-up time between model changes and simplify operation. Changeover time has been reduced successively from days to hours to finally achieve SMED (Single Minute Exchange of Dies: less than 10 minute).
- Improving on-time delivery, a crucial metric in retail supply chains.
- Rearranging assembly work areas to improve ergonomics.
Addressing Major Hurdles
As is the case with many lean transformations, the biggest hurdles in the transformation related to changing behaviors. At the same time, the company wanted to ensure strict quality compliance to protect its highly regarded brand without impeding productivity improvements. Any visual management system that the plant/TBM teams created had to result in the refusal of all abnormalities.
The plant began using an internal lean training and certification program, and its human resources department became more involved in training. To support the new production configuration, the company enhanced its incentive and reward system to include recognition for team performance.
Reducing Lead Time, Inventory with Supplier Engagement
In addition to internal changes, making the transformation to a flexible, efficient producer would have to involve packaging suppliers because packaging is the most expensive part of each finished unit and must be tightly synched with production to avoid excessive inventory.
The plant/TBM team worked with major packaging suppliers. Here is a summary of those efforts:
- Conducted kaizens at supplier sites and on site.
- Began tracking daily performances.
- Documented and improved new - product development flow.
- Followed up the action items/findings from kaizens (i.e., re-train engineers).
- Efficiency improved more than 25% from 2008.
- Daily schedule adherence from 85% to 96%.
- Quality: Lot buy-off and containment audit, 50% improvement from 2008.
Improving the performance of packaging suppliers was key to reducing lead time, which supports flexible operations because the best way to improve forecast accuracy is to reduce lead time. If lead time is short enough, it is possible to introduce a pull system with end customers in mind.
How Sustainability Was Achieved
The plant/TBM team created a three-prong system to achieve sustainability:
- Each kaizen team creates a Kaizen Sustainability Audit Sheet, consisting of core scores and action items.
- Direct staff and assigned managers audit each kaizen.
- The Lean Supply Chain Office shares the result and findings from audit with the process owner (managers and department head)
What’s Happening Next?
The plant is continuing its lean transformation by working on several key areas:
- Continuing to invest in people and to recognize employees as the first appreciating asset of the company, but also as the highest potential for innovation and creativity.
- Working toward a 50 percent productivity improvement rate.
- Integrating more suppliers into the lean transformation. Today they are helping their main suppliers.
- Extending lean principles to administration and new process design.
"Our lean journey began with TBM's help in kaizen events and value stream mapping,” said the vice president and general manager. “Along the way, I learned that lean is all about customer focus and engaging every employee in the quest to continuously improve the value delivery system. We now have these critical components in place to delight our customers with outstanding quality and responsiveness at the right cost.”
About TBM Consulting Group and TBM China Asia Pacific
TBM Consulting Group is the worldwide leader in lean innovation and rapid performance improvements for manufacturing and service industries, and government organizations. The hallmark of our work is rapid implementation, generating sustainable results for our clients. We have a bias for action and work side-by-side with our clients to transfer knowledge and help them generate results with their own people. TBM China Asia Pacific is composed of a panel of highly experienced local consultants covering all of Asia in any kind of business, from traditional discrete manufacturing to process industries including food and beverage.
* The company and the names of its executives have been removed at the request of our client who wishes to remain anonymous.
