Although automaker General Motors Corp. (www.gm.com) has been involved in implementing lean practices for a number of years, Tom McMillen, GM's director global logistics, believes implementing lean practices will be forever ongoing. "Today, we look at network optimization weekly to remove waste and reduce touch points along the path from supplier to assembly plant," he says. "We intend to reach a point of looking at our network on a daily basis so we can fully realize cube optimization and have fewer touch points. We strive continuously toward more A-to-B moves with fully cubed trailers."
In logistics, GM looks at best practices around the globe and enforces their implementation through its global team, McMillen notes. "Throughout our organization, lean practices allow us to reduce inventory in plants and streamline business practices. The benefit is more efficiency and productivity in our supply chain."
With an understanding of these potential benefits, Scott Saunders, vice president global supply chain with plumbing products manufacturer Moen Inc. (www.moen.com), looked at what companies in automotive and other industries were doing to make their supply chains leaner.
"We're trying to find best fit for our operation and determine how much change we can bring about within our organization, and how quickly," says Saunders. "We saw what is considered world class and we are introducing lean practices, with an emphasis right now in the distribution arena. Our first step was looking at the knowledge level and commitment from management."
As he focused on people in his distribution operation, Saunders saw three major issues — philosophy, management and tools. "Do we understand the lean philosophy? Is management walking the talk? We need to be coaches and scientists, constantly looking at how work is done and how we can correct problems," says Saunders.
"Tools like Six Sigma depend on your situation," he adds. "It might be the proper tool, but if you don't have the right philosophy and the best management attitude and commitment, you're not going to get results from simply adding a new tool."
A change in the management organization was a big step for GM's supply chain, but one that drove greater success in implementing lean practices. McMillen notes GM was split into several divisions. When the automotive giant took a regional approach, the new organization drove a lot of synergies.
"Viewing the company as four global regions helps us drive improvement, gives us an opportunity to look at a larger network, gives us more leverage from a purchasing standpoint, and helps us drive lean practices," McMillen insists. The regional approach also has allowed the company to reduce inventory and improve best practices.
Taking a full supply chain approach, McMillen's team is working with suppliers from Tier I to Tier III and its lead logistics providers (LLP) and primary carriers, especially in North America, to optimize the transportation spend. "I want to reduce touch points from supplier to assembly," says McMillen. "We are driving best practices and standardizing work for greater efficiency. If one LLP does something well, we want to use that practice across the network."
To standardize work within manufacturing facilities, Moen has created contracts with operations people. A team of operators documents their work in different areas of the operation. They determine the best way to do the work, then train each other and sign a contract agreeing that is how they will do their work.
"It's not just a method of educating operators but also of getting their input on the best way to do the work," Saunders states. "Our next challenge is making cross-functional changes. It's easier to do lean in a self-contained plant or distribution-center, but truly dealing with supply chain is looking at all steps."
Looking at all the steps in a company's operation before suggesting a solution is a desirable approach whether you own the operation or are a consultant. As catalyst with Profero Inc. (www.proferoinc.com), a company that provides lean solutions to manufacturing and health care companies, Tony Manos' title suggests he will make changes.
After observing a hospital lab client that tests specimens from doctor offices and the emergency room, Manos believed the starting point should be implementing very basic lean principles. The lab's goal is to process specimens and provide results quickly, so he started with overview training at the management level, then applied some basic building blocks of lean:
- The first step was workplace organization to create order — cleaning and organizing supplies and the workspace.
- Then Manos looked at layout. "We redesigned the central processing area where specimens first come into the lab. The redesign allowed the client to fit more workstations into the same space, so all technicians could finally have their own workstation, eliminating a lot of waiting time. At the same time, we improved efficiency of work flow," says Manos.
- Then he suggested implementing standardized work. "This stems from understanding the sequence of the operation, including how long the work should take," says Manos. "It removed the 'it depends' factor."
- Another basic tool used was value stream mapping. Define the current state — the way it's done now. "Then we looked at where they wanted to be as to flow and turn time and identified areas for improvement," says Manos.
"These tools improved efficiency in the lab quickly and are an excellent beginning for any company on a lean journey. Observation indicated we needed the basics before we moved to higher level improvement tools," Manos states.
With a wealth of experience using higher level lean improvement tools at Quaker Oats, Jerold Schlegel, corporate quality assurance and food safety SPC (statistical process control) manager with Rich Products Corp. (www.rich.com), eagerly took on responsibility for implementing SPC software in all 15 Rich Products food plants. "The implementation challenge is getting the infrastructure-laid out to support the software," says Schlegel. "It gives us quality enhancement and production improvement. It also brings a means for data-driven continuous improvement, and we're able to deliver measurable financial returns."
The SPC software package, provided by InfinityQS (www.infinityqs.com), allows Rich to control and track product weight on the manufacturing floor. Operators as well as management can see live data on package fill weights and can make proactive adjustments on the line, keeping product weights within targets and eliminating waste. The live data online is presented in an easily read form and the program triggers upper or lower alarms when product doesn't meet preprogrammed specifications.
The SPC tool can also pull process catch data from other systems to monitor quality live. It can extract logic control data as often as desired and present them to operators in a form they can understand. This allows operators to make proactive decisions or changes if something is out of spec. "Yield improvements were huge," Schlegel claims.
While the journey to lean supply chain practices can be long and should be continuous, benefits make the trip worthwhile.
SPC in 25 words or less
Statistical process control (SPC) is a system used in quality programs like Six Sigma for monitoring, controlling and improving a process through statistical analysis.