LeanCor Academy: Building a Lean, Mean, Learning Operation

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1 LeanCor Academy: Building a Lean, Mean, Learning Operation Our employees are our backbone and we need to keep learning and improving, said Holly Wallace, an operator at LeanCor s Lean Logistics Center (LLC). Holly is a recent graduate of LeanCor s internal training program LeanCor Academy. To say that learning occurs at the LLC is an understatement. Since its inception, the Academy has transformed the LLC into an operation that lives and breathes continuous improvement. Team members have gained more than just job training. They ve become lean leaders who truly exemplify walking the walk at the Gemba. About the LLC The Lean Logistics Center (LLC) is one of LeanCor s customer facilities that it operates to support a manufacturing plant. LeanCor provides warehousing, sequencing, kitting, sub-assembly, sorting, and packaging engineering services for the plant enabling dynamic one by one production. The value-added services facilitate mixed model manufacturing, protect the plant s production lines from poor quality, optimize line side presentation, and act as a layer of protection between the customer and its supply base. From the moment you walk in the door of the 135,000 square foot facility, lean principles are present. These principles include: Safety: The entire operation has a commitment to a safe work environment. FIFO (First In First Out): The FIFO concept is applied to inventory maintenance in order to minimize obsolescence. Daily PDCA (Plan Do Check Act): To ensure progress on all fronts, the LLC leadership team conducts daily stand-up PDCA meetings at the beginning and end of each business day. Sustainment and Continuous Improvement of 5S Process: The LLC ensures a standard approach to 5S process and development of labeling guidelines in order to reduce costs associated with damages and obsolescence. Problem Solving and Continuous Improvement Culture: LeanCor Academy exists to develop and instill a problem solving and improvement culture through team member training and empowerment. Visual Workplace / Visual Management: The goal is for the LLC to be a visual workplace that enables anyone at any time to understand the current condition of the operation. The team ensures at all times that it can answer the question, What is the score?

2 Key Performance Indicator (KPI) Review: The LLC leadership team leads and facilitates KPI review meetings (daily, weekly, monthly, and quarterly). Commitment to the Environment: The LLC reviews and implements the most cost effective and environmentally beneficial methods to reduce, reuse, and recycle waste. Standard Work: The LLC identifies the best way to complete a task, documents that method, and then makes it visual so all will perform that task at the documented standard. Quality at the Source: The LLC builds quality into the process when and where errors actually occur at the source as opposed to inspecting a process to scrap or rework poor quality orders. Flow: All materials and information flow steadily toward the end of the process (and ultimately the customer) without stopping. Pull: The LLC uses a fulfillment model in which work is not done until it is necessary to fulfill a specific order requested by the next process step in the value stream (ex: kanban). Challenges To serve its customer, the LLC must understand the forecast needs of its customer and meet them in a timely and quality matter. With variation in volumes, production lines, staff, service offerings, and cell layouts the LLC sees its share of changes and must be ready to adapt at any given time. The most impactful of these changes are volume shifts that drive it to add or reduce an entire shift of team members. When adding a shift, luckily there is usually a sufficient amount of team members willing to move to third shift. Then, additional team members are hired and trained with experienced operators. When reducing a shift, management relies on a magic ratio of temporary to full-time team members to protect against lay-offs. The challenge lies in the massive fluctuations i.e. how long will the shift change last? The answer is usually unknown it could last months or even years. Volume shifts also affect work cell layout. Whether it s a change in volume by model number or sheer quantity it causes the headcount of team members to fluctuate within a cell. A work cell may be required to absorb additional work with the same number of team members, or they may gain additional team members to alleviate the strain. The LLC team works to make these transitions as seamless and transparent to the customer as possible. Standard work and processes prevent disruption to the stability and efficiency of the operation. But in order to maintain this recipe for success, an operation needs an entire team dedicated to problem solving and continuous improvement. This is where LeanCor Academy comes in. About the Academy Implemented in 2010, LeanCor Academy was created to train and develop LeanCor s team members. Facilitating a continuous flow

3 of lean problem solvers, the Academy sustains operational growth and permeates an internal lean culture. Team members gain on-the-job orientation as well as career development with training in lean, six sigma, logistics, supply chain, leadership, and management skills. Academy curriculum is made up of two levels. Level 1 covers lean fundamentals such as the River of Waste and House of Lean. Level 2 covers more advanced problem solving with lean tools such as the XY Matrix and A3P. Each level is an eight-week course made up of two-hour sessions once per week. The first half of class consists of reviewing the previous week s material and team member feedback, learning new material, and answering questions. The second half is spent conducting a hands-on simulation of a process. Concepts are presented in ways to which team members can relate and apply to their job functions. Upon grasping a concept, team members are challenged to apply the knowledge they learn through the Academy. In order to graduate, they must demonstrate how they will apply and execute lean tools and problem solving on the floor. This application helps drive operational initiatives forward and instills a sense of ownership within team members. They take pride in their work and the value they provide LeanCor. They realize the impact they have to the success of the business. To facilitate this concept application, the LLC utilizes an Operator Feedback Process whereby team members provide standard, practical improvement suggestions. These ideas are reviewed daily by the leadership team. Upon approval, the status board is updated with the team member picture and kaizen idea, an A3 is developed for the project with the help of the team member, and the team executes the improvement with the team member. The chart to the right breaks down the feedback process:

4 Case Study: Dump Truck Simulation In February 2012, an Academy class ran a manufacturing simulation that entailed building dumptrucks made out of legos. Each simulation created a situation for a 20 minute work day where the target amount of dumptrucks was 10. Below lists the results and what was learned through the simulation. Simulation #1: Facility was chaotic, no 5S, excess parts at workstation and warehouse, excess movement between warehouse operation and production. The team performed a waste walk of the simulation. Simulation #2: Initial 5S was started in the production cells and the warehouse. Standard work was assigned as homework for each production cell. A fishbone diagram was created to find causes of downtime and production flow issues. Simulation #3: Standard work pig exercise was performed to show differences in how standard work is written and how there is no one way to do an activity. Standard work was implemented in all production cells. The operation turned from separate work cells to an assembly line. The concepts of takt time and cycle time were introduced. Simulation #4: Further line balancing was performed based off of cycle times. 5S visuals were improved in both the warehouse and the assembly line. Inventory management in the assembly line was introduced. I love the atmosphere. We are encouraged to ask questions and expose problems. Most places don t want to hear about internal problems. The program has spiked in popularity since it first began. Viewed as an incentive, the program has become somewhat of a status symbol among team members. Team members volunteer for classes, understanding they may have to study outside of normal operating hours. It s also built into the organizational structure; completion of LeanCor Academy is a prerequisite to becoming a Team Leader. Results After the first class and reading the book, Everything I Know About Lean I Learned in First Grade, team members comment that they immediately notice a difference in the way students interact and deal with challenges on the operation floor. In addition, team member vocabulary expands to include terms such as cycle and takt time. When asked about something she has learned, operator Stephanie Pineda says it s a lot of the vocabulary words we have heard management talk about. It s nice to understand the terms they are using and understand more about lean in general. Not only do the team members appreciate the time spent to teach and educate them on lean principles, they appreciate the investment made out of respect to the value they bring to the operation. I love the atmosphere, says David White, also an operator at the LLC. We are encouraged to ask questions and expose problems. Most places don t want to hear about internal problems. Simulation #5: Kanban cards were initiated throughout the operation. A pull system was implemented rather than a push environment. Inventory management was increased in the production cells while also in the warehouse. It s a common misconception that lean is about eliminating jobs. By learning how to reduce the steps in a process or cycle time, the LLC can conserve space and absorb more work with the same headcount.

5 Lean is not about cutting headcount, White says. It s about handling product less and doing the job as efficiently as possible. Saving the customer money comes naturally when we accomplish this. The Academy also helps bring to life ideas that are very simple but ignored during typical facility operations such as the concept of waste. For example, if an operator has defective sequencing racks that negatively impact his performance, he hasn t allotted for time to secure the racks. Now the operator is wasting his labor time and is still expected to meet the same cycle time. In addition, now he is wasting tape and other materials. Looking at individual components of a process reinforces these concepts and allows team members to understand where they can add value. By going through that process, they understand what LeanCor does as a company and what we represent, says Joe Berutti, Operations Manager for the LLC. They understand lean and what we re trying to do as an organization. As 2011 started, the LLC was just above meeting the customer goal of 350 DPM. As the year progressed, the LLC Team was able to exceed the goal set every month after February while demonstrating a downward trend overall for the year. The average DPM for 2011 was 232 vs the 2010 average DPM of The graph below illustrates these improvements over time: Case Study: Waste Walk A group spent over an hour identifying and observing waste within a cell. Key improvements began with making handle consumption visible. Due to the current amount of variation and number of SKU s in the cell, managing a kanban card system would not work in this cell as it did in others. The team sought to invest in a remote andon system that would trigger a light on the replenishment tugger to come to the handles cell. The second major discovery was made when observing when the operator had completed a rack. The class viewed a simple motion analysis of walk time to quantify waste. The group did a rough calculation and figured the operator in the handles cell was wasting upwards of 30 minutes of a day simply walking back to the beginning of the work cell once a rack was finished. The students really started to challenge and ask why the operator was not able to pick a single rack one direction and come back and pick another. Overall, the waste walk was a valuable learning and improvement experience!

6 By investing in our number one asset our people we re building a strong foundation for the future. members beginning Level 2 in To date, 78% of full time LeanCor team members have completed Level 1 of the Academy. The goal is for 100% completion by quarter 4. Level 2 Academy for leadership of the facility will begin in quarter 4 with team A new addition to the learning culture is the kaizen calendar. The LLC will hold a kaizen event for one week per month. Team members who ve graduated from Level 1 of the Academy will apply their knowledge during the kaizen event and help drive results for the operation. By the end of this year, the goal is for an operator level team member to actually lead a kaizen event. LeanCor is proud of its team members and the problem solvers they ve become. The business investment in time, effort, and resources to build future lean leaders has yielded major returns from improvement projects and elevated customer service. Berutti says, By investing in our number one asset our people we re building a strong foundation for the future.

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