The Secrets of Getting Lean Started
Implementing a Lean Manufacturing initiative is a big undertaking. Getting lean started isn’t always easy. Scores of companies try and fail while others succeed.
What are the secrets to getting Lean off the ground properly?
This post is the transcript of a live stream discussion featuring friends of the 5S Store, Newcastle Systems, to hear about their experience implementing Lean Manufacturing. Key employees John O’Kelly, founder and President, and Operations Director Jason Williams joined us to share their experiences and dos and don’ts related to getting a Lean implementation off the ground.
The discussion shares the perspectives of both practitioner and executive, including questions from the audience throughout the discussion.
What You’ll Learn:
- How business leaders make a decision to implement Lean
- Signs that your Lean initiative is taking hold and working
- What do when things get off track with your Lean implementation
- Best practices for cultural engagement around your lean initiative
- Favorite Lean tools and why
- The impact of 5S on Newcastle System’s Lean initiative.
Meet the Lean Team from Newcastle Systems
John O’Kelly founded Newcastle Systems and has served as its president over the past 15 years. Seasoned in the world of workstations designed for ergonomics and workflow, John deeply understands their impact on efficiency and safety. John has had experience with Lean implementations at several companies, and most recently initiated its use at Newcastle Systems.
Jason Williams is the Director of Operations at Newcastle Systems. He’s an experienced operations professional with materials and production background in medical device and other industries. In addition to 15 years of experience with Lean Manufacturing, Jason has experience with validation, GMP, and is a Six Sigma blackbelt.
Transcript of the Secrets of Getting Lean Started webinar
The 5S Store:
We welcome both of today’s speakers. Let’s get started with some of the topics we promised we’d cover today. So, first, a question for John. I’d like to ask you, John, how did Newcastle Systems make the decision to move forward with the Lean manufacturing initiative?
John:
Well, back in 2012, our company was about seven years old, and we were going through a lot of growth. Many years, the growth was double digit. And so, we knew we had to evaluate some of our manufacturing processes and procedures, especially when we were operating in a small 8,000 square foot facility with the administration offices right beside us. And we first were dabbling in Lean, where we did a basic time study of our most popular products to see how long it took to assemble, and we determined that it took us 1,000 footsteps to build one of these products.
Well, I have to say I was floored by that. 1,000 footsteps to build one product? It seemed ridiculous. It seemed very wasteful. And so, that certainly caught my attention. And my office was right out on the production floor, so I thought if I could miss this level of inefficiency, there must be a lot of other examples I could explore.
The 5S Store:
I want to put up our first question for our audience and get some opinions related to getting support at the C level for Lean manufacturing initiatives. So, here’s the question. It’s true/false: We have support at the C level for our Lean manufacturing initiative. Please answer this question with true or false, and I’ll review the responses with you in just a moment.
Alrighty, let’s check the results. It looks like just under 80% say they have C level support for Lean manufacturing initiatives, and there’s still 21% that feel like they don’t. And we’ve heard in the past that having that C level support is super important. So, I would love to start with a question to John. As the president of a company, could you tell us what you think the president of a company needs to hear in order to agree to sign up for a Lean initiative?
John:
For me, I felt one needs to hear that our processes are not efficient and that with some simple improvements, we can make some significant benefits right away. So, like the example of the 1,000 steps, which was a shock to us, when we were able to reduce our product assembly, we went from 52 minutes to 36 minutes, which was a 30% reduction in the time. This really caught our attention and we knew that we were right on track.
Another example of what we needed to hear was one time we visited a company called Hypertherm in New Hampshire. They’re a $2 billion manufacturing company. We learned that they do not have any finished goods. All their product is made to order. I was very surprised by this, and I knew that if a big company like this, a $2 billion company, could set up where they don’t have any finished inventory using Lean, I figured Newcastle could definitely do the same. And the benefit to us of this, it was significant. We were able to go from four week lead time to two week, which had a serious impact on our business.
The 5S Store:
So you’re results-focused. Jason, I’m going to point this one at you now. I imagine you’ve been in the role before where you had to convince the higher ups that Lean made sense. Could you talk to me a little bit about the kinds of things you’ve done to convince the leadership?
Jason:
I always thought the justification for Lean is very important. Why are we doing it? Obviously, to eliminate waste, but it opens up a lot of things about cost reduction. At the end of the day, we’re trying to focus on the end user, which is the customer. So, internally, if we can go from building a product that takes us an hour to a half hour, we have resources to put on other things. The way we look at it here at Newcastle, it’s not just production. We use Lean through the office area. We have it through sales and marketing, through operations, through logistics. The proof is in our KPIs. We can prove that we can turn around a product, and our efficiencies have improved. We’re a growing company, so it’s very important that we utilize our resources in the right way.
And the other thing we look at is we’re making people’s jobs easier, and people appreciate that. Everybody wants to be efficient at working, and it’s good for morale of the company. People want to work here. People are happy. So, at the end of the day, a lot of the Lean initiatives that you implement are also for the employees to make their jobs easier and safer.
The 5S Store:
The benefits are many, for sure. So, let’s talk a little bit about, once you decided to put Lean in place at Newcastle System, what signs did you see and how long did it take for you know that it was starting to work?
John:
In our example, it only took a few months to see that it was taking hold. Some of that manifested itself with our manufacturing manager, who could see our productivity was noticeably higher and that we were able to, quite honestly, keep up with the orders. Other departments saw some benefit. They saw if they did a 5S, or some assembly stations, they had interest in that. They could see there was a benefit to them in improving their organization. For example, our customer service department was interested in looking at doing a value stream of our returns process. So when all these people started inquiring about this, we could see Lean moving forward by itself with the inertia that was developed. So, it came from many different angles.
The 5S Store:
That’s great. I’m curious to hear what the audience has to say about this, so let’s put up our next polling question. For those of you who have a Lean initiative in place, if you could select from this list of multiple choice answers and respond, we’ll review those responses in just a moment…
We have quite a mix. It looks like the length of time varies greatly in terms of seeing results from a Lean initiative. Setting expectations has to be a huge part of this, I imagine, especially when you’re trying to have C-level support for your initiatives. So, I’m going to point this one to you, Jason. I bet you have some perspective on how to know that Lean’s working. Could you share what you think is important to measure and how to set expectations with management?
Jason:
There’s several things you can measure with Lean. Some of the things we do is looking at our output. Has it increased? Have we reduced our lead times? There’s cost saving initiatives we have that can be done. Some of the other things we do is the before-and-after, which I really like. You’re trying to get buy-in from everybody. One way to measure it is to show them the current process and then show them the proposed new process. Again, it could be a cost savings or it could be a reduction in time to increase your output. So, several different ways we can actually get people involved as part of the measurement.
And the other thing we do here is we have an internal combine or a supermarket where we built some assemblies, and it’s very visual. We can go out there and see right away if that’s not being replenished, we’re going back to the push system rather than a pull system. So, there’s a lot of visual things you can do for measuring, but at the end of the day, it’s looking and measuring and developing KPIs that work for your organization.
The 5S Store:
Got it. Questions beginning to roll in, and one of them is specific to a metric that John brought up at the beginning of our webinar. The question was about the 1,000 footstep process. We’re curious to hear, what did that equate to in time, and what was the time cut down to, if you know, John?
John:
Sure. We started off at about 52 minutes to build this one product. It was our NB series. It was our most popular product. And we were able to get that down to 36 minutes. And it didn’t take years to do that. It took us, perhaps, a couple of weeks by the time we changed the work area.
The 5S Store:
And what was the time at the beginning?
John:
It was 52 minutes, and it went to 36 minutes.
The 5S Store:
That’s an impressive improvement.
John:
Yeah. It’s 30%, a little over 30%. I was really surprised by this.
The 5S Store:
Fantastic. Thanks for sharing. I’m going to move on to our next question. Things don’t always go perfectly smoothly. Everyone wishes they would, but not everything is smooth sailing. What do you do when things get off track? Jason, I want to ask you, what’s your opinion on how to keep things on track?
Jason:
Difficult things can get off track really quick when you’re getting busy. People think of Lean as a secondary thing. So, I think it’s very important to put Lean activities into the goals for everyone. Interaction with employees and having Lean meetings and keeping people engaged is key. Again, even though you’re busy, you have to take time to meet and make projects. One of the things we do here is we get some of our employees trained as green belts so they can develop projects and get other people involved. Keeping that visibility is important.
Also, in these Lean meetings, coming up with ideas. Maybe you can’t implement right away, but you should be taking everybody’s feedback and parking some of the ideas and saying, “Well, we might not do it today, but let’s not lose focus on it.” So, I think one of the keys is being dedicated to keep meeting with people and keep different projects and also sharpening your Lean skills by having more training.
The 5S Store:
We also had a question from the audience that’s related, about sustainment of Lean efforts. You gave us a good list there, but if you had to prioritize the activities you put in place to sustain Lean efforts internally, what are some of the things that you put at the top of the list, Jason?
Jason:
Accountability is a really big one, and we do that in several different ways. One of them is we put it into the employee’s goals. We include Lean initiatives that they need to meet and sustain. And the other thing we do is a lot of auditing. We do some daily and some weekly. We do a 5S audit daily on each product line to make sure people are following through, and we measure that and we give feedback immediately on that. And then the other one, I think, the team meetings that we have, the Lean meetings, getting people’s feedback and getting them involved. I think that’s a great tool, as well.
The 5S Store:
Let’s put it out to the audience now. Here’s a yes/no question about what they’re experiencing in terms of bumps in the road. Please take a moment to answer. … And 100% of folks have seen some bumps in the road with their Lean implementation. So, Jason, I’m going to point this one at you. Are you surprised by that number?
Jason:
Not at all. It’s a challenge for everybody, and places I’ve either worked or visited or training I’ve done with other people, it’s one of the hardest things to do.
The 5S Store:
Let’s stick on this topic for a second, because it seems to be a pain point for folks. I’m going to ask you, John, what are some sure-fire signs – things that you saw – that showed you Lean was beginning to catch on with the culture?
John:
For me, it was when our sales director, Kevin Ledversis, started to use the Lean tools to help some of their sales processes and sales tools. I was surprised by that. And also, we started to offer to do green belt, like Jason mentioned, and we opened it up to everyone in the company. We had salespeople want to join, and then administrative people wanted to join. I just thought this really said something about their belief in the direction we’re going and what we’re doing with regard to Lean. That was significant to me.
Also, the fact that we have Lean as part of our core values I’m sure did help, because it puts it to the fore and they can see that executives of the company are really behind this. That’s most important so they can see you’re walking the walk and talking the talk. I think that’s important to keep the momentum.
The 5S Store:
That makes a lot of sense. And Jason, when we were preparing for this webinar, you and I talked quite a bit about some of the ways you guys have helped to get Lean to stick with the culture at Newcastle. And one of the things you talked about is that sometimes when you see bumps in the road, it’s because people are a little afraid of it. You’ve done some very specific things to help people get over that hurdle. Do you mind sharing?
Jason:
Sure. I think one of them is showing the results. One of the things we do is communicate and show the result of what we were trying to implement so we can get buy-in from people. People do get a little freaked out sometimes. They think if we’re trying to streamline a process or take some waste out of it, that their job’s going to be in jeopardy. But it’s not that. And we try to prove it to people and show them that, “Hey, this could free you up to do something else,” and maybe do some cross training for these individuals of something they want to do differently.
That’s also why it’s key that we share our KPIs that we’ve developed with our employees. We do that on a week to week basis, or even quarterly. We have a quarterly meeting where we go over this, too. So, we try to keep them engaged and make them part of it. We want them to know that this is really for them. One thing I do, I’ll facilitate meetings, but I want the people to drive the meetings and drive the improvements. They’re the ones that are on the front line building product or taking orders or whatever. So, I think employee involvement is very important. And also, like John said, knowing that they have support from the upper management.
The 5S Store:
We had a question come in from the audience that’s along the same lines. It’s about overcoming this resistance to change. Was there one tactic that was most successful for you?
Jason:
I think it’s the before-and-after. Showing people that. I’ll give you an example. We went to our one-piece flow, and this one person kept batch building. He was taking almost double the time to build his product, and he just would not listen to us. We had to show him. It was out of his comfort zone. He wanted to do it his way, how he had done previously. But we showed him the results of the before-and-after. “If you actually follow through this process, it’s going to be quicker.”
So, I think it’s that before-and-after, really showing people the results you can get. Because, again, people sometimes think, “That’s not going to work.” So, showing them how it works and showing them the improvements in the time they might save by implementing something different.
The 5S Store:
So, in the case of that person who was resisting, when you showed him, did he change his behavior after that?
Jason:
He tried. It was not easy. He did try to change, but I don’t think he ever really bought it. Unfortunately, it’s not for everybody, each company, whatever. But most of the people here have bought in. It’s a cultural change, and that’s why it’s important to get the message down from upper management that this is the way we want to go, and doing all the things, the weekly meetings, all the things that we’ve added.
Eventually, the culture changes, and one of the examples I can give you is when we bring in new employees now, we don’t train them just on the processes. One of the things we train now is Lean. This is the way we do it. This is why we do it. It’s nice to see that. That’s a buy-in. People are buying in, and that culture is changed now.
The 5S Store:
That’s great. We had a very thoughtful question from the audience, and I think it’s worth having both of you guys answer this one. So, I’m going to point this one at John first, and then Jason, I’ll ask you the same thing. So, the question is, when improved efficiencies lead to significant labor savings, what are the determining factors for cutting excess labor versus directing them towards further growth?
John:
Sometimes people use the phrase “Lean with cutting,” and for us, it’s really not about that. It’s really more about where can we deploy if we gain an extra half hour or 20 minutes per person, or whatever it is. Then we look to other areas where we can deploy these people in different parts of the facility. So, we would enable people to perhaps go to other departments where they could help with some bottlenecks or whatever. You have to make sure you get the buy-in from your people on the team. Because if you don’t, and they see that all you’re doing here is taking these efficiencies and then getting rid of the extra labor, that’s not a recipe for adoption. That’s a recipe for denial of the whole Lean program.
So for us, we’ve never really had to seriously consider that because our business, as I said, was growing well into the double digits every year, and it still is. So, we constantly try to figure out ways we can improve the processes in the manufacturing area. And initially, they may start off in an assembly area, and then they may go to the packaging area or the receiving area or the returns. And we found that all of those areas can be improved. You can make them more efficient. So, that’s what we’ve done with the savings, if you like.
The 5S Store:
Jason, I’ll ask you the same thing. Based on your experience at other companies, as well, have you ever faced anything like this, where you’ve had to make the decision between cutting the extra labor or reapplying it to something else? And how does a business make that decision?
Jason:
I never really experienced implementing Lean to get rid of people’s jobs. I mean, there is so much to do, but I definitely think that communicating with the employees is very key to help them understand that we’re not here to take their jobs away by implementing process improvement. It’s good to meet with people and say, “What else do you want to do? Can we cross train you in a different department? Or can we get you some projects? Maybe it could be a Lean project.” Or I’ll get them on other things. I think that’s very important to engage people so that they’re part of it.
But I do understand, it isn’t fair for some people, and I think that’s really why that communication with your employees is key. Maybe even throw in a reward. If you complete a project or come up with an idea, you get a gift card.
One of the places I worked, we had a Lean award where somebody would come up with a process improvement or something, that we would give them a little trophy, and they would put that on their desk until the next person came up with one. So, I think it’s really working with your employees and keeping them hungry and in that comfort level, because people definitely do not want to lose their jobs by implementing this. And if you want this to really take off and work, you don’t want that fear factor for people.
The 5S Store:
That’s a great point. So, an interesting thing that we have going on at the 5S store right now is a live survey out in market about the state of Lean manufacturing. I’ve had a preview look into the data so far, and what’s curious, to me, is that while the purpose of Lean is about the value stream to the customer and giving the customer a better outcome. But there is a cohort of companies that may implement it for the sake of cost savings. It sounds like you guys are more aligned with the concept of doing better for the customer than you are about saving resources or time. Is that fair to say?
John:
I would think so. One of our core values is our customer focus, and we’ve tried to adopt Lean to, basically, take better care of the customer. Because we feel that if you do that, everything else will take care of itself. And for us, that’s been pretty significant. Especially when we were able to reduce our lead time from four weeks to two weeks. Customers love that, and we were able to do it without having to add an extension to the building or whatever. So, I would definitely say that’s it.
The 5S Store:
I’m going to ask a final question here before we wrap up. Since the 5S store sponsored this webinar, I’d be remiss to not ask how you guys utilize 5S. So, I’ll start with you, Jason.
Jason:
One of the things that we’ve done is, on each product line, we have 5S-ed every one, and one of the things we’ve done is add visual aides. Each product line is set up by color so you know where the tools they belong. We have silhouettes that each employee will put when they’re done. Materials refilled after each day, or even during the day of the shift.
Standardization also is very important here, not just in the workflow. Somebody just came up with a great idea for our company filing system. Everybody is using something different, so if you try to search, you can’t find anything. Standardization is very important part of success for us. And for our product, we look at it a lot with safety. We look to make sure our production workers are not bending over, ergonomics aren’t a problem. So, we use a lot of the 5S tools for that type of process.
The 5S Store:
John, is there anything in particular that you’re fond of relative to the use of 5S at Newcastle?
John:
Some of these are more the tools that we’ve adopted. You do a kaizen event, if that’s what you’re asking here about it. In a particular area, we’d go and evaluate the whole process and see how we can make improvements. And obviously, there are different tools that we have adopted, as Jason mentioned. Some of them regarding labeling and magnetized labeling. That’s something we have worked with the 5S store for, and it’s been very helpful to us.
The 5S Store:
Thank you, Jason and John, and thank you to our viewers for all of your questions.