Learning Lean
A contract manufacturer gets introspectivewith a company-wide focus on the elimination of waste.
Inzign Pte. Ltd.
In designing its Lean strategy, Inzign Pte. Ltd. studied the seven sources of waste in the manufacturing equation originally outlined by Toyota’s chief engineer, Taiichi Ohno (widely considered the father of the Toyota Production System, which became Lean manufacturing) with the goal of reducing or eliminating them. The seven areas addressed comprised overproduction, waiting, transportation, inappropriate processing, unnecessary inventory, excess motion and defects. The company’s management team quickly realized that before it could reduce or eliminate this waste, its team would need to learn to see them.
Inzign is a Singapore-headquartered contract manufacturer specializing in plastics injection molding and the assembly of disposable medical and healthcare devices. The initial challenge in the firm’s Lean journey was designing systems that made waste obvious, and finding ways to involve and motivate all employees to contribute to quality improvement. Focus was placed on developing systems for improving both quality and efficiency.
The question was: “How do we motivate everyone to participate?” Two systems were developed: a leader standard work (LSW) model to define job responsibilities and visualmetrics to share results with all employees. Photo courtesy of Inzign Pte. Ltd. |
Systems for Improving Quality
The goal was to have every staff member playing a part in improving quality, from operator to the manager.The question was: “How do we motivate everyone to participate?”
Two systems were developed: a leaderstandard work (LSW) model to define job responsibilities and visual metrics to share results with all employees.
LSW Model
An elaborate job master list first was created to ensure that each employee had a clear description of his or her job responsibilities. This list outlined each job category’s responsibilities for monitoring, reporting, evaluating, decision making, producing, maintaining, training, managing, administrating, planning, organizing and communicating.
Subsequently, the LSW model was developed. The LSWs detail responsibilities on a daily, weekly, monthly, quarterly, semi-annual and annual basis. The LSWs currently are under review in order to better define the basis for the ownership of responsibilities.
LSWs eventually will be used for ensuring continuity of each job function and become a part of new employee training.
Visual Metrics
Visual displays of production performance are used to encourage active participation of ground crews in day-to-day problem solving.
Leaders are responsible for reporting any abnormalities or gaps between actual and expected performance encountered during their shifts, which then are highlighted during daily morning briefings with the production team. This daily routine helps to reinforce the focus required on the production processes and with it, the accountability of the process owners. The manufacturing engineer then will be tasked to analyze the issues and provide the necessary support, including requesting other departmental resources or help. Some of these requests will be posted in the company’s communication log for follow-up.
The high visibility of each shifts’ performance has created healthy competition among shifts. The need to do better, in turn, drives team members to push for continuous improvements.
Systems Improving Efficiency
Four improvements were put in place to improve efficiency:
• Communication log;
• Performance indicators (PIs);
• Overall equipment efficiency (OEE) monitoring; and a
• Shop-floor monitoring camera system.
Communication Log
Good, concise and timely communication is crucial for achieving work efficiency. In place of ad hoc communication through the regular emails, a common communication log system has been mandated on a daily basis. This creates a “pull” system for information flow that enables staff to access the information they need as they have a need for it versus having information “pushed” to their inbox continually.
The communication log consists of:
1. Machine production status—running condition, such as cavitation, problem(s) encountered.
2. Outstanding production issues to be addressed by other departments, such as tool room on mold repair/readiness status, process improvement requests, etc.
3. Planners’ updates on upcoming mold-change and material readiness as advance information for production.
Stakeholders review the log on a daily basis, updating on their work status and actions taken. This log also has enabled the sales staff to have real-time access to production orders’ progress at their finger tips.
The production team used to host daily morning updates on production status involving all the stakeholders. Since the inception of a communication log a year ago, these meetings were reduced from daily to alternate days and eventually to the current arrangement of meeting on every first working day of the week, which has resulted in greater efficiency.
Performance Indicators
To ensure that the company is meeting its goals, departments are measured by a set ofperformance indicators (PIs). These measurements are used for monitoring its operational performance in meeting the company goals.
A sample of the many PIs used includes:
• Efficiency relating to machine utilization, mold cavitation and cycle time;
• Yield relating to molding and assembly operations;
• Customer performance rating relating to quality non-conformance, on-time delivery and service level;
• Quality relating to customer lot acceptance rate, complaint and return to vendor;
• Quality inspection relating to in-process and finalrejection rate;
• Material management relating to inventory turnover, shrinkage and interruption; and
• Compliance relating to current good manufacturing practice and housekeeping.
OEE Program
The overall equipment effectiveness (OEE) program has been monitoring equipment efficiency since June 2010. In this program availability, performance and quality performance is measured.
Although these operational indexes always have been used as key performance indicators, OEE is a more holistic way of measuring the efficiency of a manufacturing process. Achieving high OEE involves stakeholders across all functions. For example, planners must develop a balanced schedule, facilities must perform appropriate preventive maintenance to minimize machine downtime, process engineering must minimize cosmetic quality defects and optimize machine cycle timing, and quality assurance must use statistical process control activities to support production.
Preliminary results show that between July and September 2010, implementation of the OEE program has registered an improvement of 15 percent in one of the Singapore manufacturing sites.
Shop-floor Monitoring Camera System
A pilot program was initiated using an integrated management system to assist in shop-floor monitoring. Under this system, information relating to machine status, production efficiency, production downtime, machine utilization, power efficiency and quality control (QC) activities are available as part of a real-time production shop-floor management concept.
The system primarily uses recording cameras to monitor the activities for each production machine. These can be activated either through machine signals or via human activities when QC inspectors move into the machine area for periodic in-process inspection. This allows access to real-time visibility and control as well as ensuring response to machine downtime issues and adherence to planned activities.
QC inspectors are aware that they are to perform the stipulated in-process inspection during these planned time slots, with the captured footage available for review should any subsequent traceability requirement arise.
Similarly, production specialists need to respond quickly to any machine downtime as captured footage also will allow the reviewer to understand what went on following a machine interruption. This helps in ensuring that all events that are supposed to be logged in during the production run are documented.
In designing its Lean strategy, Inzign Pte. Ltd. studied the seven sources of waste with the goal of reducing or eliminating them. The seven areas addressed overproduction, waiting, transportation, inappropriate processing, unnecessary inventory, excess motion and defects. Thecompany’s management team quickly realized that before it could reduce or eliminate this waste, it would need to learn to see them. Photo courtesy of Inzign Pte. Ltd. |
Overall, the pilot program has some similarities to market available shop-floor monitoring software with the exception of the video capturing capabilities. It aims at allowing easier access to shop-floor information for more effective management.
Singapore government support is being tapped to expand this program. Under the Capability Development Program (CDP) through local enterprise development agency SPRING Singapore, Inzign will be planning for the implementation of this integrated management system/shop-floor monitoring camera system eventually across its three manufacturing facilities in Singapore and Batam, Indonesia, by 2011.
The CDP program is an initiative by SPRING Singapore to help local small and midsize firms focus on capability development at the enterprise level.
Lessons Learned
As with most improvement initiatives, initial assumptions needed some course correction.
In identifying some of the wastes, the initial planned approach was to get departmental heads to identify their respective departmental problematic areas through a problem solving request (PSR) system. The intent was to get these departmental heads to perform a 360-degree review of what is affecting department performance. This is applicable to both production as well as the supportive functions in the company.
Having identified the problems, they then have to put down action plan(s) to solve or mitigate the issues. The goal was to ask each department on how efficient their respective areas are performing in terms of human competency, system capability and compliance together with what is lacking for them to perform better. One of the setbacks in initial efforts to tackle this issue was not recognizing the reluctance of department heads to communicate this information, since reporting weaknesses was perceived as making the department look bad.
The current PSR system requires highlighting the possible cause of the departmental issue with a subsequent request made to that specific area or function. The specific departmental or functional head in charge is then required to provide a solution for resolving or mitigating the highlighted issue.
All requests are updated in a log, serving as a reference database as well as tracking how each area is performing in terms of problem solving and improvement activities.
Incentive System
To achieve full participation in all of the Lean initiatives, an incentive system was developed. It encompasses all employees and links the productivity of the production department as a base for monthly monetary payouts.
The program defines a minimum performance baseline, which covers work speed and quality, as well as attendance for the ground crew. Different support staff is rewarded on a functional factor basis up to the managerial level. The intention is to encourage supporting staff to fully cooperate with the improvement programs.
The manufacturing site in Batam, Indonesia, for example, showed a significant improvement in attendance rate as well as productivity since the program’s initial launch in mid-2007. Absenteeism has dropped from an initial level of more than 5 percent to well below 1 percent, while production efficiency currently is around 98 percent. Teamwork and co-operation across functions also has been improved.
Meanwhile, implementation has been scheduled in the coming months for both Singapore sites after automating the elaborate calculation required for the program.
The Benefits of a Holistic Approach
The focus has always been on empowering the individual employee to strive for improvements. The communication log and production visual display board are tools that promote effective communication of work issues and status.
The LSW used for each employee’s role and responsibilities, together with the problem identification process by departmental heads, aims at instilling ownership at the individual as well as departmental level.
Highlighting any process deviation at either the individual or department level helps to identify potential issues at an earlier stage. Without this focus, minor deviations otherwise might have gone unnoticed or undetected only until the final batch release in a medical device manufacturing environment. Savings are being achieved in both waste reductions as well as improved utilization efficiency arising from these early calls for help.
Experience with issues related to traceability requirements sometimes points to compliance issues where people are not following procedures. While there always will be ongoing efforts made to reiterate the importance of complying with established procedures and practices, the shop-floor management camera system helps to further enforce discipline and compliance when carrying out daily activities. It also enhances the ability to better record and document process interruptions for necessary intervention where necessary.
The incentive system provides the reward and motivation for the team to work together and achieve its common objectives. It aims at creating a win-win situation for both employees and the company, having a fair and transparent reward system, promoting total teamwork and motivation and enhancing productivity, quality and customer service in order to bring the company to the next level.
Results seen so far improve the key customer satisfaction index. On-time delivery performance has approached 99 percent together with a 100 percent customers’ lot acceptance rate.
In responding to each customer’s ever-increasing quest for improved response, quality and price competitiveness, these Lean activities have broadened the company’s perspective of each role in the organization by looking more in-depth at daily routines, and finding and identifying waste in the form of inefficiency, bottlenecks, rejects and delays.
This helps form the basis for a learning organization, which is crucial in increasing one’s foothold in today’s competitive landscape of medical device contract manufacturing.
Thomas Ho is Inzign’s operations manager. He can be reached at: operation@inzign.com.