Nordson Goes Operation Lean, Service Heavy

Dec. 1, 2004
This little warehouse operation is learning to supply global customers without putting a world of hurt on its bottom line

What is lean? For Nordson Corporation, it's identifying waste in its manufacturing and warehousing processes. Waste is a byproduct of overproduction, inefficient motion, unnecessary waiting, excess inventory, defects, extra processing and poorly applied people.

Poorly applied also means poorly protected, which translates into injuries. That's why ergonomically designed workstations play a big part in Nordson's lean logistics mandate.

"Anything that's not adding value is waste," says Manda Bennett, logistics operations supervisor for this Amherst, Ohio-based manufacturer of precision dispensing equipment. "With our operations, there isn't a lot of extra steps the customer is willing to pay for."

Bennett recently hosted a tour of her facilities for the Northeast Ohio WERCouncil, a regional chapter of the Warehousing Education and Research Council (WERC). The tour group, made up largely of warehousing professionals representing various industries, wanted to look at a doable approach to lean that was scaled to their types of operations.

Nordson is one of the world's leading producers of precision dispensing systems that apply adhesives, sealants and coatings during manufacturing operations. Nordson markets its products through a network of direct operations in 30 countries. More than half of the company's revenues are generated outside the U.S. Serving global markets in a timely fashion requires efficient material handling.

Edward Campbell, Nordson's CEO, is a proponent of lean logistics. In the company's annual report, Campbell writes: "Our continuing progress in adopting lean operating processes produced further improvement in Nordson's inventory turns, and careful asset management allowed capital expenditures to be $22 million below annual depreciation and amortization."

To accomplish that, the Amherst plant has eliminated functional silos. That will require all employees to go through Lean 101 education. To date, although half of the plant's employees have yet to complete that course of study, the warehouse has already eliminated extra steps and repetitive jobs.

Performance improvement
Two of the Nordson operation's biggest problems were random slotting and poor pick performance. Inventory wasn't stocked for efficient movement. Products were put away in FIFO (first-in, first-out) rotation, but slotting was random. They eventually ran reports to help them locate products more rationally, but Bennett says they need to make better use of their warehouse management system (WMS) to further improve slotting. This will also help supervisors gain better visibility to operations.

The Amherst facility is 45,000 square feet and processes 400 to 500 lines per day using 12 people on the first shift and two on the second. There are 2,000 active SKUs in the warehouse and 14,000 active SKUs in the factory. Order pickers travel both areas and are measured on inventory accuracy, same-day ship, lines shipped per day and orders per day.

The other major target for improvement was the operation's 24-plus-hour pick turnaround. To improve picker performance, Nordson created a value stream map, showing how long various operations should take and where. This happened once the logistics operation identified waste in its processes and created an "ideal future state map" identifying short-and long-term performance goals.

As a result, warehouse layout was changed to maximize inventory flow. Products were slotted where it made sense from a movement efficiency perspective. Warehousing performance is now down to a four-hour order-pick turnaround.

Bennett's staff consolidated similar functions and changed picking processes to improve order turnaround. That had the biggest impact on operations, and entailed replacing a large-capacity mezzanine-installed carousel with a smaller one on the floor.

"The old carousel was used to 30 percent of its efficiency," Bennett explains. "The new one is the center point of our operation, and holds fast-moving small parts."

Paper pick orders are placed in a "load leveling box," organized by the four warehouse zones pickers work from. This ensures the most efficient worker movement in the warehouse.

"Now each material handler is responsible for filling his own orders to completion," Bennett explains. "There are no more unnecessary multiple-package shipments to customers."

Lessons learned

  • Everyone who works in the warehouse is an important information resource when you're looking to go lean. They know their processes better than anyone.
  • Consulting with company sources who've never seen the process can also be helpful. They'll ask unique questions and offer ideas that might never have been considered.
  • Don't be afraid to make mistakes. You'll learn from them.

Nordson's Amherst operations aren't sophisticated. Their simplicity matches the facility's size, but not its global scope. Bennett admits they still need to make better use of bar coding and their warehouse management system isn't used to its full potential.

"We don't have dimensions and weights in the WMS and we need to improve slotting to provide better transportation rate quotes," she adds. "We plan to have these capabilities by the next fiscal year."

Bennett also plans to take another look at staffing. Cross-training between the warehouse and manufacturing will be essential to making best use of manpower and giving them the flexibility to meet varying demand rates.

"This has been a big culture change for us," she explains. "Everyone in our plant is used to working at his bench, doing the same thing all day long. We're finding if you double people up and put more resources on a task, you might get the best use of staff. People are starting to adjust to these changes. We post performance results so workers can see how their performance affects customer service."

If this story inspires you, mix some reality in with the inspiration so you'll achieve similar results. When Nordson started executing "lean events," it figured, the more the better.

"That didn't make sense, because you might not need to complete an event in a particular area," says Christie Chojnacki, one of the manufacturing business managers. "Let your goals lead to each event.

Nordson employs three full-time "lean leaders" who run the events for all employees. If you go this route, Chojnacki suggests you schedule regular meetings between your leaders and the rest of your employees. Nordson started with weekly meetings to let everyone know what was going on. Those were then scaled back to monthly meetings lasting a half-hour to an hour.

Nordson's Amherst facility is still learning as it goes lean. Its early successes have encouraged forward movement. As Edward Campbell explained to Nordson shareholders:

"Our strategic imperative is to facilitate a best-in-class implementation of lean concepts that will fund our investments in new applications and markets while maintaining our competitive advantage."

Nordson's Amherst, Ohio facility houses 2,000 active SKUs in the warehouse and 14,000 active SKUs in the factory. The plant has eliminated functional silos. That will require all employees to go through Lean 101 education.

Nordson's distribution operations process 400 to 500 lines per day using 12 people on the first shift and two on the second. The staff consolidated similar functions and changed picking processes to improve order turnaround. Material handlers are responsible for filling their own orders to completion,and there are no more unnecessary multiplepackage shipments to customers.

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