What Exactly is Lean? |Part 3 of 3

Dec 12, 2018, 12:41 PM by User Not Found
Let's tie this all together and see how LEAN actually saves money in your production facility and in your offices.

By: Lisa Tran, Information Technology, Stoner Inc.

In this article we discuss the basics of Lean thinking and how we, at Stoner Inc. have applied some of those principals. Lean is a journey toward making your facility and office more efficient and profitable. In Part 1, we showed some examples of how we at Stoner got started and how our 5S Plus 1 principals work, and in Part 2 we pulled apart some of the tactics of Lean, now let's explore how these principals translate into money saved.

How This Really Saves

All through this article I have been talking about saving a little time here and make processes a little better there, and you might think, so what?  I want to give you some real-world examples using process improvements and Point of Use examples to show how this Lean thinking really does change things.

Example 1 – Process Improvement Savings

First let’s talk about our quality department.  They produce certificates of conformance to say that our products are manufactured and conform to a certain quality standard.  Originally, to produce these certificates, we used to do the following process:

Old Method:

1.            Run job
2.            Find in submitted jobs
3.            Print job
4.            Walk to printer
5.            Sign Letter
6.            Put it in printer to scan to network drive
7.            Walk back to desk
8.            Find scan on network drive
9.            Email to customer

This whole process would take about 10 minutes, but we realized this process was inefficient, so we started making some changes.  We still run a job in our internal system to produce the certificate, but now we add an electronic signature and deliver the certificate with a formatted email back to the quality employee for review.  They then forward the email to the customer

New Method:

1.            Run job
2.            Job delivered to email box with electronic signature
3.            Forward to customer

With this new method, producing a certificate only takes about 2 minutes. If you break this down and analyze what is actually happening, you start to see why these little changes are so powerful.  

Since the original time was 10 minutes and you reduced the process to 2 minutes, you saved a total of 8 minutes (10-2).  Each person in the department handles 2 of these requests per day and there are 6 people total in the department.  So, 8 minutes multiplied by 2 times daily multiplied by 6 people equals a total of 96 minutes saved per day. (8x2x6 = 96 min per day).  If you take 96 minutes per day and multiply it by 250 work days per year, this adds up to 24,000 minutes per year (250 work days per year x 96 min = 24,000 minutes per year).  This means by making this small change to improve this process, you just saved a total of 400 hours per year (24,000 minutes divided by 60 minutes in an hour).  Four hundred hours is actually very significant, but you would not realize something as simple as saving a few minutes on a task would have that effect.  If you tackle all your processes and improve them even slightly, it will have a huge impact on your business.

Example 2 – Point of Use Savings

Just to prove the point, let’s take a look at another example. Let’s say you have an office of cubicles with a printer at one side of the room.

Let’s say a user on the far side of the office prints 4 times a day.  It takes 30 seconds for them to walk across the office to the printer, so it takes 120 seconds or 2 minutes per day retrieving printouts (4 trips x 30 seconds = 120 seconds; 120 seconds/60 seconds per minute = 2 minutes).

If you then multiply the 2 minutes per day times 250 workdays per year, you get 500 minutes or 8 hours per year (2 minutes x 250 days = 500 minutes; 500 minutes / 60 minutes per hour = 8 hours).  Now let’s say the far set of cubicles has 6 users who all have the same work pattern as our example.  In that case, you multiply the 6 users x the 8 hours per year to get 48 hours per year spent retrieving printouts (6 users x 8 hours = 48 hours).

Now let’s be real conservative and say these employees only make $9.00 per hour.  If you take the $9.00 per hour x the 48 hours, it equals $432.00.  For $432 dollars you could buy at least one new printer and make employees more efficient or spend the $432 to improve a process to eliminate printing.

One caveat to note is that this is a minimum.  Realistically, how often do you get up and walk somewhere without getting stopped to chat or answer a question?  In addition, the work force probably makes more than $9.00 per hour.

Tying it All Together

So maybe you are starting to see that Lean practices can make big things happen, but what are the real business results from Lean?  At Stoner, we are continually seeing improvements in the following areas:

•             Increased sales year over year
•             Cost reductions throughout our operations
•             High customer service ratings
•             Focus on value added
•             Morale boosts and job satisfaction since employees are doing more meaningful and value-added work

Even with all the improvements and changes, we continue to strive to do things faster, better and cheaper.  We analyze ourselves so much that we often forget to step back and look at how much we have achieved and how far we have come.  With an average employee tenure of 12 years, sales per employee ratio that is outstanding, and consistent morale ratings between 85-95%, we know that we must be doing something right.

How Can You Start on a Lean Journey?

Lean practices start with a desire to change and challenge you to look at things in a different way than you may have looked at them before.  Sure, it is great when the whole company is on board and everyone gets training and you have a consultant come in to help guide your journey, but Lean practices can start small.  You can look at your own work and your own department and make adjustments.  Read articles and books, attend Lean training if possible, and start to effect small changes.  Efficiency will start to grow, morale will go up, things will become more visual and easy to follow and other people and departments may take notice and want to know what you are doing to be successful.

Lean is a journey though; it is small steps and shifts in thinking.  It requires focus and analysis and action.  Lean is a whole change of business style and it won’t happen overnight. One key to getting Lean and really affecting change is to discover the root causes of issues. You only truly prevent recurrence of problems if you fix the root of the problem.  Don’t be tempted by an easy fix of symptoms; look for the real problem.  It may be difficult to find and may take some creativity and money to fix the root of the problem but remember how all the little bits add up in saving of time, money and less frustration and the cost and effort to eliminate that root cause doesn’t seem so bad any more.

Conclusion

Lean practices CAN help your business operate faster, better and cheaper.  Start by breaking out of your everyday mold and really look at what you are doing and what could be improved.  Challenge your current thinking and remember concepts like, “put your hands on anything in 30 seconds” or “would the customer pay for that?”  Remember that Lean principles are not just for manufacturing, and opportunities for improvement exist everywhere.  Elimination of waste improves efficiency, saves time, saves money and both customer service and employee morale are positively affected by efficient processes.

Here at Stoner we are always striving to make things more efficient for our users.  We have been on our Lean journey for 10 years, but it is an ongoing journey that will keep us busy for many years to come.  Hopefully this article has provided you with some interesting insights and challenged you to think differently about work and processes at your own facilities.