As such initiatives become increasingly entrenched, it takes organizational commitment to keep a shine on.
The application of Lean manufacturing and Six Sigma programs in businesses of all shapes and stripes has become pretty much a cottage industry unto itself. With a focus on burnishing value, it’s easy to see why Lean has such a role.
With programs being ubiquitous across the broad manufacturing horizon, it’s a natural thing to wonder what makes such efforts work, especially where they have been in place for some time. To find out more, Orthopedic Design & Technology asked practitioners in such initiatives—consultants and those who handle the nuts and bolts of such efforts within some supplier companies—what makes their programs work.
ODT asked about the general characteristics of such programs, and what companies have learned in adhering to Lean or Six Sigma tenets that might be more broadly applicable to other firms that might be late to the party.
With some two decades worth of exposure to the tenets initially put forth by Toyota and now broadly adopted across the spectrum of business activity, these respondents had many useful observations on what truly can be labeled doctrines of performance that have their foundation on the production side but now cover pretty much all aspects of performance.
Goal of Continuous Improvement
According to Matt Burba, executive vice president for Implant Manufacturing at Orchid Orthopedic Solutions, keeping Lean initiatives fresh is a relatively simple concept but it is more complex in its execution.
“You need to continually teach and train people how to solve problems,” he said.
Orchid, located in Holt, Mich., provides contract design and manufacture of implants and instruments in the orthopedic, dental and cardiovascular markets. Burba said he believes the company’s Lean success stems from “creating an army of scientists and making everyone in the organization look at their job as a problem-solving activity.”
It’s a matter of having employees compare what they expected to get out of their machine or process with what it actually produces. As Burba noted, usually there’s a gap, so the question the machinist should ask is, “How do I close that gap?”
Burba attributes the problem-solving success to hard work.
“Each issue is unique,” he explained. “As a company, we have to mentor our employees into problem-solving people so that when they see a situation, they can apply the rationale and thought process it takes to fix it. This mentoring relationship could be the reason that Lean has taken so long to be implemented.”
The Lean process, in general, is best attacked with a standardized system for training and deploying different tools.
“Employees learn faster when there’s a lingo that they can relate to,” Burba said. “It’s very similar to when you use Microsoft Windows. When you learn a new program, it’s usually easy to navigate because there’s a set of processes that you’re already familiar with.”
On the issue of workforce support, ODT asked if hearing something such as: “Here’s an idea. I’ve always kind of thought we ought to do it this way, but nobody ever asked me before,” represents a flashpoint that indicates Lean truly is being embraced.
“That’s nirvana,” Burba said with obvious enthusiasm. “That’s when you have engaged employees and empowered and trained them to the point where they can be self-sufficient in creating possible solutions. Engaging the brain not only leads to more productive employees, but to more satisfied employees and a bigger base of support.”
While some may say that it is easier to get employee enthusiasm during difficult economic times such as those we have faced over the past few years, Burba said Orchid started implementing its Lean processes in 2007.
“Since most of our implementation took place during the difficult times, operating in those times is all we know. We have really great people who’ve been very supportive and offered great feedback to improve our organization,” he said.
Noting that Lean initiatives make a machine operator’s job easier, he said, “It is frustrating for operators to have wasteful or insufficient processes that make it more difficult to do their job. Our employees love to do a good job—they’re trying to make good parts, so they are grateful when an obstacle is eliminated.”
As for the bigger picture, Burba said, “I think, in the end, you want to create a company organism of cyclical improvement where you don’t need the head engineer or the smartest person in the company to develop an idea. You want small ideas, big ideas— you want an entire spectrum of improvement happening all the time. Once you get there, it’s a lot harder for a competitor to copy a thousand little ideas than it is for them to copy one big idea.”
He said the downside to the “one big idea” approach is that once you have it, your competitive edge can quickly dissipate. “You’re going to buy a machine with $1 million or $2 million in capital. That’s great. You’re going to have a little bit of a lead in the marketplace if you can install that correctly. But then, the first thing that the company that sold you the machine is going to do is find your competitors and try to sell them the exact same machine and process. There’s a limited timeframe for how long that advantage will last.”
On the other hand, “those small, organically-generated improvements optimize your machine operators’ little six-foot-square areas of operation. That’s something that can’t be copied.”
When asked if there is a finite amount of waste, either time or money, that can be squeezed out of any process or procedure, Burba replied, “There are diminishing returns on any activity that you do, so you may have a situation where the percentage saved on a process may decline as the total cost of goods goes down. But we have not approached the point where we’re having trouble finding something that is worthwhile. I don’t know that we ever will be at that point.”
He added: “Look at the world-class leaders in the Lean process like Toyota. They’re celebrating saving a second or two seconds in their processes. But we’re still working on saving an hour here or an hour there. We have a long way to go before we reach those milestones. Even for the world-class people who are operating on a totally different scale, you can still continue to improve, and that’s the important thing.”
Old Hands, New Approaches
Plexus Corp., an electronics contract design and manufacturing company headquartered in Neenah, Wis., is a veteran when it comes to Lean manufacturing, having been involved with such efforts since the late 1990s, but that doesn’t mean there’s nothing new to try in the land of Lean.
Tim Murphy, Lean Sigma champion for the Engineering Solutions group at Plexus, said that while Lean and Six Sigma have long histories on the manufacturing side of things, they still are pretty fresh on the product development side. With that relative newness, Murphy predicts there won’t be a challenge to keep the topic current and compelling.
“I don’t see it becoming stale for us for years and years to come,” he said. “We focus on solving problems, and to this point we haven’t run out of problems to solve.”
Murphy said the “keeping Lean Sigma fresh” query generates a corresponding question of “What do you use to benchmark?” His reply: “We’re kind of going against the absolute benchmark of perfection, and certainly we’ll never get there, so I think we’llalways have more runway room [for continuing improvement].”
As is the case with Burba at Orchid Orthopedics, he referenced the company where the Lean movement started.
“Certainly a lot of us use Toyota as a benchmark, and I would guess they still think it’s fresh and they still have a lot of gains to make,” Murphy said, emphasizing that Lean Sigma has plenty of applicability outside of manufacturing.
“It is opening our eyes to other opportunities,” he said. “Yes, we’ve seen great progress with Lean Sigma early on in ourjourney with manufacturing, but there is just as much waste if not more in all the other areas of our business as well, and Lean Sigma concepts and principles are just as applicable to those areas.”
And even though the Lean Sigma process has been in place on the manufacturing side of Plexus for many years, there’s still plenty of newness to the effort.
Joe Palmeri, Lean Sigma champion at the Plexus Chicago (Ill.) manufacturing site, said the ongoing rollout of new initiatives “helps keep the engineers and the team on the production floor continuing to work to improve our overall Lean Sigma strategy.”
As for elements that are especially important to the program’s success, Tim Taber, director of Manufacturing Solutions for the Medical Sector at Plexus, said, “It’s key that it’s driven from the top of our organization, and they’re expecting that from the rest of the organization. It’s not just Lean Sigma champions in a corner doing all the work—you really need broad engagement by all employees and broad empowerment. If not, maybe you can make limited gains but you certainly can’t make transformative gains.”
Palmeri said that the state of the economy in recent years has heightened workforce awareness of what such efforts can mean to the company.
“As economic times have become a lot tougher, it has become easier to get buy-in, because they see Lean Sigma as a tool we can use to keep us competitive in the industry,” he said. “Our customers have pricing pressures on them, which means that we have to continually look for improvements in our processes as a way to pass on savings to the customers.”
Asked whether there’s a finite amount of waste that can be squeezed out of a given project or process,
Taber said, “We look at where we’re going to get the best return on our investment and where the projects align with key metrics that we’re driving to, and we make decisions based on that. There’s always room for improvement, but there may be a point where the return probably isn’t going to pay for the effort.”
‘T’ is For Transformation
Tom Pesaturo, founder and principal of Exceeda Consulting, a Seekonk, Mass., firm that focuses on “Lean transformation,” said the likelihood of such transformation being judged a success is directly linked to a company’s commitment to the concept.
In response to ODT’s query whether he sees some companies doing Lean well and others not so well, he said, “Yes, I absolutely see differences in the companies that truly embrace Lean and those that just go through the motions.” There is “one commonality for success,” he said, hinging on “supportive and engaged leadership or lack of thereof.”
Thus, the success or failure of building a Lean culture “falls squarely on the shoulders of the business leaders. When business leaders realize that Lean can improve their business and provide a differentiator to their competition, great improvement can follow,” he said. “If leadership just wants to say they are ‘Lean’ by going through the motions and not embracing the methodology fully, then their results will be less than what is possible or perhaps even a complete failure.”
In developing Lean programs for clients, Exceeda adheres to an overall goal that Pesaturo describes as eliminating waste and continually improving the process to increase productivity and lower costs.”
Pesaturo says the “Lean nirvana” that companies need to strive for is to orient their workplace and adjust their work tasks so that their product or service is always in a state of value-adding.
“We describe waste as any activity that absorbs resources, but creates no real value. Conversely, value added is defined as any activity that increases the worth of a product or service and for which the customer is willing to pay,” he said. “So, if we eliminate waste (non-value-added) then we improve the flow of work, which decreases cost and provides new sustainable business profits.”
All of which fits with the “new normal” business mantra of more, better, faster, cheaper.
So, we asked, how do you keep Lean initiatives fresh, and is there a finite amount of waste that can be squeezed out of any given process or procedure?
“There is no law of diminishing return when it comes to process improvement,” Pesaturo said. “Once a process has been improved, it needs to be reexamined to remove more waste, creating a culture of continuous improvement.”
He said his firm uses a method called freezing and unfreezing the process.
“Once a process has been improved, we freeze it for a period of time to ensure stability. Once stable, we unfreeze the process and improve it again,” Pesaturo said, adding that companies “should always start by improving their business processes where their greatest area of need or concern is based.”
As for keeping things fresh, he said it’s important to praise and recognize the effort of team members and provide data supporting their hard work.
To keep Lean moving forward, Exceeda uses a process that drives transformation and creates a sustainable learning organization.
The firm identifies three roles in the transformation process:
• Lean champions, who are accountable for delivery of team objectives, team management and schedule adherence including individual assignments within the team, and management of results;
• Lean team members, who participate in all team meetings, provide technical expertise, contribute to team success and quality of recommendations, manage communications, act as interpersonal coaches, measure results; and
• Project review board, which periodically reviews team progress, approves recommendations, coaches and mentors teams, provides overall project leadership, and provides role model participative behavior.
“The Project Review Board is made up of the leaders in the organization and the teams report into them on progress and challenges,” Pesaturo said. “The Lean Team Leaders and Team Members are made up of all other levels in the organization by the people who are getting the work done.” When asked about the selling points used up and down the line to make Lean initiatives attractive to various members of an organization, he said, “We have a favorite proverb that we use with our clients: ‘It isn’t the mountain ahead that wears you out … it’s the grain of sand in your shoe.’ This proverb hits a chord with people because essentially Lean removes all the grains of sand, or frustrations, that people deal with in their daily work lives. It is really incredible that up to 95 percent of what we do is considered non-value-added by our customers.”
When working with employees, Pesaturo explained, his firm looks to eliminate the avoidable waste and the unavoidable waste it wants to streamline to perform in the fastest, most efficient and least-costly manner possible. This, ultimately, makes the employee’s job less frustrating and easier to perform. He noted that employees enjoy being part of the process; they are empowered to ask questions and develop solutions. Asked whether it is easier to get that buy-in during difficult economic times such as those we have faced over the past few years, he said, “I do think the economy has opened doors as companies seek better ways of doing things. Early on in the economic crisis, companies tried to stay ahead of the cost curve by reducing overhead. However, most find that overhead reduction itself is not sustainable and does not drive business process improvement.”
Pesaturo said that while businesses need to keep overhead in check, the only way a business can affect their cost sustainably is through process improvement.
“Lean provides the process to drive sustainable and dramatic change to both business processes and profitability,” he said. “It is impossible to solve business problems and improve cost, quality and time without changing how we do work.”
Clearly, quality is all the more important when operating in a highly regulated industry.
“That is… a perfect reason why businesses need to consider Lean as a methodology and business culture,” Pesaturo said. “The Lean process is built around implementing standardized work processes and eliminating variable work. Lean tools and techniques concentrate on building work processes that define the best way to get a job done, in the amount of time available, and how to get the job done right the first time and every time.”
Pesaturo said that by eliminating the variable work, quality improves as a result of clearly defined standard work steps.“It boils down to repeatable processes equal repeatable quality,” he explained. “If a business operates in an environment of non-repeatable processes, problem-solving is almost impossible and as a result, quality suffers.”
Championing the Multi-Faceted Approach
Another person who views the Lean/Sigma question from the consulting side of the equation sees those companies that do it best applying their efforts on a variety of fronts.
Susan Mucha, president of Powell-Mucha Consulting Inc. in El Paso, Texas, said that truly Lean companies look at administrative processes and supply chain management strategies. They focus on reducing the number of transactions they do, convincing suppliers that the lot sizes they typically require aren’t always the lot sizes that work for Lean, and setting up pull systems that support variations in demand.
“A really good Lean program is holistic and encompasses business processes as well as production processes,” she said.
Mucha said the key issue for company management is that they need to have a vision of what they want Lean to do, then help those who are responsible for those Lean efforts get there.
“For example, if they need different equipment, get them different equipment,” she said. “I think the key point is, you either have a management team that has a vision or you don’t. If the management team has a vision and sets a goal and feels that adopting Lean principles or adopting Lean sigma or adopting Six Sigma is going to help them achieve that goal, they’ll find the money.”
Getting buy-in by the work force isn’t always easy, but relating Lean programs to how they do their jobs is one important way to do so.
She noted: “They’re a little less excited about joining a ‘program of the month’ where they’re going to have to work extra hours and at the end of the day they’ve saved the company $200 or $2,000 or $20,000, but it doesn’t really change the overall issues that they see in their jobs.”
Mucha noted that there are differences in the way goals are set by a contract manufacturer versus a product-line company or OEM.
“With a contract manufacturer, you’re dealing with a lot of different customers, all of which have different levels of commitment to Lean, so there are going to be constraints that don’t exist in an OEM,” she said. “The challenge for most supplier companies is finding a way that they can take a lot of different-looking projects and a lot of different levels of commitment to Lean, and make that process work.”
She added that suppliers that go Lean “need to be able to demonstrate what benefit it is to their customers. Keep in mind, sometimes those are not going to be dollars and cents. Sometimes the benefits are going to be higher quality, and that’s another factor to consider—the quality that comes from the consistency that is driven by Lean may be more of a payback to them than the actual Lean processes, and the other area where companies can see a payback is additional flexibility. A truly Lean factory is going to be able to react to changes in demand much faster than a non-Lean factory, so that means you have more flexibility without necessarily carrying more inventory.”
Jim Stommen, retired editor of industry publication Medical Device Daily, is a freelance writer focusing on the medical product sector.