Lean Supply Chain and Logistics Management, page 6
Figure 5.2 Current state value stream map example.
Briefly, VSM is a mapping tool that is a 10,000-foot-level view of a process. Typically, it is for a family of goods or services from the customer working its way upstream all the way to key suppliers. A VSM is similar to a flowchart or process flow map, but one of the key differences is the “current state” map identifies value-added and non-value-added activities. The “future state” map, which can be thought of as a road map, attempts to reduce or eliminate the identified non-value-added activities.
Standardized Work
Standardized work refers to the standardization of best work practices—as the work is actually done in real life. The idea is to make work safe and repeatable with as little variation as possible along with high productivity. It is the best combination of employees, equipment, materials, and procedures.
There are examples everywhere of standardized work, including orders, drawings, standard operating procedures (SOPs), etc. In fact, standardized work is one of the foundation principles in the Toyota Production System (TPS).
We know in real life, while there may be SOPs in a binder on a shelf somewhere, most people do a job the way they were trained (or in many cases, how they learned it on their own). In many cases, this may not be the best way (i.e., in terms of method, sequence, etc.) but may be the way they were shown (e.g., “The guy I replaced showed me how to do this before he left.”) or have done it for many years (e.g., “I’ve been doing it this way for years and it works for me.”). The problem with this is that if everyone performs a task slightly differently, there may be variation which can result in waste.
Usually it is best to get a team together of employees who actually do the work along with coworkers from other areas, document the steps in the process (using digital photography), and come up with an agreed-upon best practice minimizing waste in the process. It can be useful to use a tool such as a process chart (Fig. 5.3) to identify opportunities in the work process by capturing data for each activity, such as time and distance.
Figure 5.3 Process chart.
Visual Job Aids
It is then important to make this standard work more of a “visual job aid” (see Fig. 5.4) that is easy to understand and follow.
Figure 5.4 Visual job aid.
This type of visual job aid should then be placed in the area where the work is done (laminated for protection) so that it may be followed by everyone. It is always a good idea to consider language restrictions in the workplace when creating standardized work (e.g., English and Spanish versions).
Areas in supply chain and logistics that this can apply to are found everywhere. In the office and warehouse/distribution center are the most common and can include order processing, invoicing, and drawings. In the warehouse, pretty much all of the basic activities of receiving, putting away, picking, packing, and loading can benefit from visual job aids (see Fig. 5.5).
Figure 5.5 Visual job aid (loading a truck).
Visual job aids are especially important in warehouse operations, both in the office and on the floor, as there is a large use of temporary workers, “lumpers” (outsourced workers who handle freight or cargo), and the use of third-party logistics organizations or 3PLs (i.e., outsourced logistics functions on a short-term or long-term basis).
Standardized work then leads to an organized workplace, which is neat, safe, and efficient, with a location for everything needed and the elimination of anything that is not needed in the area.
Visual Workplace
Think of the chaos that would result in our everyday lives if there were no speed limit signs, no lines on the highway or in a parking lot.
In manufacturing terms, there is something called a “visual factory.” These simple visual signals give operators the information to make the right decision. They are efficient, self-regulating, and worker-managed. Examples include visual job aids, signs, lines on the floor designating storage areas, aisles, work areas, etc., “andon” lights (i.e., “and on” a red light there is a problem, etc.), labels (color-coded in some cases), and kanbans (visual signals to replenish inventory as a result of downstream demand; e.g., Fig. 5.6).
Figure 5.6 Simple kanban with visual signal example.
The visual workplace is one of the fundamental concepts of Lean. This translates easily to the supply chain and logistics function. At first glance, a warehouse looks fairly organized with bar codes and labels on pallet bins, safety lines on floors, etc. However, a closer look usually reveals areas of clutter and disorganization (examples might include the supply and maintenance areas).
When implementing visual systems it is important that they are easily found where needed, easy and quick to understand, and provide meaningful feedback.
Layout
Another key concept in Lean is flow. By eliminating waste in a process, items keep flowing, as opposed to waiting in a queue, in an aisle, etc. Critical to this is the layout of a facility itself.
Typically, companies grow “organically” and put things where they fit, not necessarily where they best belong. There tend to be “monuments,” which are big, heavy pieces of equipment which are difficult to relocate. This may not be conducive to the continuous flow of materials or information.
In a warehouse, as travel time is critical to productivity, good layout is essential. The idea of having your fast-moving or A items located closer to shipping (and down low) and your slower-moving C items farther away and higher up (commonly called “velocity slotting”) is not always the case. Also it is important to have tools, equipment, supplies, and packaging materials always available and close to where you need them.
The same goes for the office where we tend to lose sight of how much walking we do to process an order, for example (it can add up to hundreds of miles per year of unnecessary walking!).
Good layout results in:
Higher utilization of space, equipment, and people
Improved flow of information, materials, or people
Improved employee morale
Improved customer/client interface
Flexibility
5S: Workplace Organization and Standardization
5S, which stands for sort out, set in order, shine, standardize, and sustain, is a tool that results in a well-organized workplace complete with visual controls, improved layout, and order. It is an environment that has “a place for everything and everything in its place, when you need it.”
5S produces a workplace that is clean, uncluttered, safe, and organized. People become empowered, engaged, and excited.
A workplace that is clean, organized, orderly, safe, efficient, and pleasant results in:
Fewer accidents
Improved efficiency
Reduced searching time
Reduced contamination
Visual workplace control
A foundation for all other improvement activities
In the supply chain and logistics function, especially in the case of warehouse operations, it is often the first place that Lean is implemented. The main reasons are that it is a good foundation concept for future improvements, and it is simple to understand and implement.
One of the leaders in this is Menlo Logistics, a Division of Con-Way (www.con-way.com). They dedicate an entire section of their Web site to Lean logistics and state that “Menlo Worldwide Logistics practices lean logistics to deliver superior supply chain performance and give its customers a competitive advantage. Lean logistics emphasizes minimization of all resources used in supply chain management. The lean logistics methodology uses proven lean practices and principles to reduce waste, complexity and error… adherence to 5S leads to better quality service, lower costs, higher availability, higher customer satisfaction, and more reliable deliveries.”[www.con-way.com, 2011]
Worker productivity in a warehouse or distribution center is especially critical (e.g., cases per hour or CPH is a typical productivity measure), and 5S can be especially useful in this regard.
As was previously mentioned, the actual 5Ss stand for: sort out, set in order, shine, standardize, and sustain. They will be defined shortly, but before starting on a 5S kaizen or improvement event, one must first perform a workplace scan. Typically, this entails the following steps:
1. Area map—Usually drawn by hand, it should show the area being 5S’d, including all machines and materials located in the area. Colored lines should show the movement of materials (and information) in and out of the area. This is called a “spaghetti” map for a reason—by the end, it usually looks like a bowl of spaghetti! It is a good way for the group to understand where there may be opportunities for improvement and where things are not flowing.
2. 5S Audit—There are many 5S audits available on the Internet. Basically, the facilitator leads the group through a “before” rating of the area in terms of each of the 5Ss (we will get there shortly), usually on a scale of 1 to 5, with 5 being the best. Typically, the first audit results in a fairly low score. The idea is that subsequent audits will find better results and can gradually be done less often.
3. “Before” pictures—It is always important to remember what the area looked like before it was 5S’d. The pictures can possibly be posted later on a 5S board with “after” pictures.
Once the team has selected an area and performed an initial workplace scan, the 5S process can start.
Sort Out
The first S is for sort out. This involves removing anything that is not needed in the area. Items can range from garbage, which can be disposed of immediately, to excess inventory, equipment, tools, furniture, etc. that don’t belong there. As the saying goes, “When in doubt, toss it out.”
Why do you need to do this? Throughput is increased as a result of improved work flow, communication between workers is improved, product quality is increased, wasted space is reduced, time spent looking for parts or tools is reduced, and overstocking is avoided.
Included in this phase is something called a red tag strategy. Simply put, a nearby area needs to be designated where sorted out items can be taken for future disposition. This is called a red tag area. Each item taken there should have a red tag attached with a variety of information, such as an assigned number, description, and recommended action (see Fig. 5.7).
Figure 5.7 Sample red tag.
Each red tag item should be on a corresponding red tag disposition sheet, which is communicated to the appropriate parties noting that red tag items must be claimed and removed within a certain time period (usually no more than 2 weeks), or they will be disposed of.
Surprisingly, there are quite a few categories and actions that can be taken during this process as can be seen in the sample disposition list in Fig. 5.8.
Figure 5.8 Disposition list.
Set in Order
After unnecessary items have been removed, everything remaining should be set in order. As the saying goes, “A place for everything and everything in its place.” During this phase, a great deal of thought should be given to the area’s layout and flow of materials and information. It is a great time for the use of visuals as well. Color-coding and outlining are a few ways to make it clear where things go. This is a good time to have a label maker and masking tape, to temporarily label shelves, bins, drawers, etc. and mark floors. A few weeks later, after “living with it” for awhile, everything will be made permanent.
A great visual to create in this phase is something called a shadow board. It can be as simple as taking an ordinary peg board and outlining and describing the tools that go on it. That way, when workers see an empty spot on the board, they know that a tool is missing. It is also a good idea to label the tools hung on the board with the same information, so when someone finds a tool they know where it goes.
Now is also the time to consider excess motion waste. You can also consider what was found in the area map done earlier.
Shine
The third S is for shine. During this phase, everything is cleaned and sometimes even painted. One of the key purposes of cleaning is to keep all equipment in top condition so that it is always ready to be used.
If the shine phase is not done, problems that can come up including poor employee morale, safety hazards, equipment breakdowns, and even possibly an increased number of product defects.
During the shine process, we clean away trash, filth, dust, and other foreign matter. Contamination can include debris, oil, documents, water, dirt and dust, food and drink, poor work habits, and materials left by other people, such as maintenance.
As a group, you need to determine what needs to be cleaned, who is responsible, how it is done, and what tools are needed. Cleaning supplies should be neat, clean, well-organized, and readily available (see Fig. 5.9). In many cases, areas have a “5-minute cleanup” at the end of a shift. Housekeeping checklists are always a good idea (like you see in the McDonald’s bathroom showing when the last time the bathroom was cleaned and by whom).
Figure 5.9 Cleaning tools.
There is also the concept of “cleaning as a form of inspection,” which involves keeping the workplace clean, inspecting while cleaning equipment, and as a result, possibly finding minor problems during cleaning inspection. During the process, a greater emphasis is placed on the maintenance of machines and equipment.
The first three S’s are the condition in which you want the workplace to be kept. In a way, they are like spring cleaning, except, if implemented properly, you do not have to do it every spring as the workplace is maintained at that level!
The next two phases, standardize and sustain, are all about keeping the workplace safe and organized.
Standardize
The fourth S is for standardize, which means creating a consistent way to carry out tasks and procedures—everyone does it the same (documented) way. It is really a form of the standardized work that was discussed earlier in this chapter. The idea is to standardize how the first three S’s are maintained.
For example, you may review the area weekly to see if anything needs to be red tagged and removed (sort out), check inventory levels for supplies at the end of a shift (set in order), and have a 5-minute cleanup at the end of the shift (shine). A good way to do this is to create a job cycle chart (Fig. 5.10), where duties can be assigned and communicated.
Figure 5.10 Job cycle chart.
Many companies employ the use of a 5S board for an area (or in some cases, for a facility). The 5S board is an idea place to display things such as current 5S Audits, “before” and “after” pictures, housekeeping checklists, area maps, and job cycle charts.
Sustain
The final, and perhaps the hardest to accomplish, S is sustain. Sustain refers to making a habit of maintaining correct procedures over the long term. No matter how well we implement the first four S’s, improvement gains may be lost and 5S doomed to fail without a commitment from everyone (management down to operators) to sustain it. 5S does not end at the conclusion of the 5S kaizen event. 5S must become part of a company’s “culture” and become a habit to be successful.
There is no simple answer to be successful with 5S. It is a combination of communications, management support (including a Lean champion to spearhead the program and possibly a coordinator), culture, and rewards (everyone always wants to know “what’s in it for me?”).
Communications methods can include 5S Posters, “before” and “after” photo exhibits, 5S newsletters, 5S manuals (English and Spanish!), 5S events, competitions, 5S department tours, and success stories. I cannot tell you how many times I have heard the story, “We 5S’d our area and it worked fine for awhile, but the second shift messed it up.”
5S should become an everyday activity, with daily cleanup and weekly 5S activities; it should become part of everyone’s job descriptions, and be measured and displayed on the 5S board.
While this chapter covered some basic tools for Lean, especially 5S, which is a great place to start in an office or warehouse, the next chapter will get into some more advanced topics, which can have an even greater impact on the bottom line for your company.
CHAPTER 6
Advanced Lean Tools: It’s Not Rocket Science
The nice thing about Lean as a form of continuous improvement is that all of the concepts and tools (even the more advanced ones covered in this chapter) are fairly easy to understand—it’s not rocket science.
The merger of Lean and Six Sigma, which is a more quantitative tool to eliminate variability in a specific process, was mentioned in Chap. 2. But it is important to understand that the tools we covered in the last chapter and even the more advanced ones we will discuss here, are fairly easy to grasp (many of which are used in Six Sigma). It is actually the ability for people to change and commit that is perhaps the hardest part, and we will talk more about that in the “Keys to Success” in Chap. 10.
Batch Size Reduction and Quick Changeover
There are two critical concepts which go hand in hand in any Lean program. They are the ideas of batch size reduction and quick changeover (sometimes also referred to as setup reduction).
