Lean Methodology 2 - Knowing Your Customer

          At the center or heart of any company is the customer, or it should be, their satisfaction and wellbeing should be our first concern. If it is our intent to truly serve our customer then listening to our customers should be our top priority. Their problems, concerns, likes and dislikes should be paramount to the way we do business.

          A few years ago, while managing a medium sized printing company, I had the opportunity of dropping by the office of a friend. We had known each other from some previous employment. He had recently become the new in-house Graphic Designer, for a customer we had been doing business with for years, though from the books they weren’t one of our better accounts.

          As I was escorted back to his office, we passed through a rather large warehouse. I couldn’t help but notice the tremendous amount of products they produced and inventory there. I knew of the company from our sales meetings and sales reports, but I had no idea of the volume they handled.

          The whole picture intrigued me and I began asking questions about the company and the extent of the design work he was involved in. I was spell bound. Then after just a few minutes he floored me with a question. “Why doesn’t your company call on us, we do over a million dollars a year in printing?”

          Wow! I didn’t know what to say. I weakly indicated that “I thought we were” and I mentioned the name of our sales rep that was assigned to the account. He knew the gentleman as well. “Oh, he calls up front on letterhead and things like that, but back here is where the real printing is at”, he responded. After a moment I did the only thing I could do; I made a personal promise that the picture was going to change.

          Back at the office the sales rep and I had a rather long discussion about the company and what I had observed. He was nearly twice my age and had managed a national sales force ten times the size of our whole company. I was reminded of this many times and found these barriers of pride, a major challenge in our ability to communicate. At last we came to the conclusion that he had become so accustom to selling a product for which he had no real input that he had become merely an “Order Taker”. He dressed very professional, made his calls like clockwork, detailed his schedule, who he met, orders that were received, quotes that were needed, and cold calls he would try and work in. He was truly one of the most professional and honest men I have ever known. He just had no real concept of being able to truly look beyond a simple office chat, into the real needs of our customers. Needless to say things did change and over time that customer became one of our top accounts.

It is not my intent to cover all the different principles of sales only to point out that the only way in which we truly serve our customers is when we truly know them. As a manager you should take time to ask questions of your sales staff about specific customers.

• Who are they?
• What do they do?
• What are their needs?
• Who are their customers?
• How is their business changing?
• What do they plan to do in the future?
• What is the value of your service or product to them?
• And how can you improve the value of that service or product?

The basic principles of Lean Methodology are based on the values the customer places on your product or service. In another words Customer Value is customer need or desire. Knowing your customer inside and out is essential to the Lean Thinking mindset.

Principles of Lean Methodology Improvement

The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easily achieved:

1.   Identify Value - Identify the activities in your process that create customer value, anything else is considered a cost.

2.   Map Value Stream – Determine or identify all the steps, tasks, or activities in the value stream (documenting your production process), eliminating whenever possible those activities that do not create value.

3.   Create Flow - Make the value-creating activities occur in tight sequence so the product will flow smoothly toward the customer. A key note in this process is to understand there is more than one customer to be considered at any given point along the production improvement process. First there is the end user, the customer of the company who will receive the finished product or service. Looking closer we see that Lean is needed in the mindset of every individual employee of the company; each one provides a service or a product to other employees or customers within the company. Each person within the company should treat each other as a valued customer and help meet their needs for achieving success in their activities of responsibility.

4.   Establish Pull - As flow is introduced, let customers pull value from the next upstream activity. How can one procedure or individual activity be improved to help the next activity. How can one procedure or individual activity be improved to help the next activity or task based on the needs of the next customer (employee) and then the final end user, the company's customer.

5.   Seek Perfection - Improve and start over.

References

George, M., Rowlands, D., & Kastle, B. (2004). What is Lean Six Sigma?. McGraw-Hill, New York, New York

Wilson, Lonnie (2010). How to Implement Lean Manufacturing. McGraw-Hill, New York, New York

Wedgewood, Ian (2007). Lean Sigma, A Practitioner’s Guide. Prentice Hall, Upper Saddle River, New Jersey

Shingo, Shigeo (1985). The Sayings of Shigeo Shingo, Key Strategies for Plant Improvement. Productivity Press, Cambridge, Massachusetts

Stephen R. Covey, (1990). The 7 Habits of Highly Effective People. Free Press, New York, New York

Bizmanualz.com (2005), “Lean Thinking for Process Improvement” part 2 of 3 http://www.bizmanualz.com/information/2005/07/14/lean-thinking-for-process-improvement.html

Lean Methodology 1 - Introduction

Applying the Principles of Lean Manufacturing

 to the Printing Industry

By

Wells Hall

            With a severe recession fully underway, it shouldn’t be surprising that the leaders of most printing companies are worried about sales. Most companies will find it very difficult to keep [current] sales at [previous] levels. Growing revenues in [our uncertain future is] a herculean task, and some companies will face substantial revenue declines. While there is no “magic bullet” for increasing sales, there are several ways to improve the performance.

David Dodd February 15^th 2009.[1] 

            The Printing Industry is unique in so many different areas, it involves all the different sciences, the arts, engineering, manufacturing, and the list goes on and on. Because of this some people are not sure quite where to place it. Is a print shop, a retail outlet, or a manufacturing facility?

            Because of this question many of the generally accepted quality improvement philosophy’s are seemingly only applied to the truly engineering and manufacturing industries, like the automotive, appliance, and electronic industries. While in reality the printing industry as any organization can be greatly benefited by the use of these different improvement methods, and application and implementation can be much faster than their counterparts.

            Lean Manufacturing has long been recognized as one of the leading improvement methodologies, for cutting cost and generally improving the manufacturing industry. It has been adopted by an innumerable number of different companies and organizations with varying degrees of success, generally a reflection of the company’s individual strength of implementation and commitment to the overall improvement process.

            It is the intent of this article to show how the principals of Lean Manufacturing are just as applicable to the printing industry as it is to any other. It will also show how the implementation of these principals can be the bases of greater profitability for any willing to make the required effort of implementation.

It will also become apparent that in many ways the printing industry, as a whole has inherently improved through these principals simply by adapting to the new and different technologies of our modern printing process.

Introduction to the principles of Lean Methodology

            Lean Manufacturing, Lean Management, or Lean Methodology are by popular definition - is a comprehensive set of techniques that, when combined and matured, will allow you to reduce and then eliminate waste in a production process. The development of this philosophy was created by Taiichi Ohno, the Chief Engineer for Toyota for many years, with contributions by others like Shigeo Shingo, an Industrial Engineer who developed additional concepts like SMED, single minute exchange of die.

            When we hear the term “waste” our mind quickly conjures up an image of barrels of toxic material seeping out on to the ground in some landfill or dump, destroying the environment. In the printing industry we might see the image of trash bins full of scrap paper, old make-ready sheets, or material that had been printed wrong. This image is not wrong, but it is just the beginning of real waste. The Lean Methodology focuses on all types and forms of waste, “time” being the biggest single waste. Taiichi Ohno, identified these seven wastes as:[2]

            Transportation – this is the time wasted of moving parts around from place to place. It occurs between processing steps, between processing lines, and happens when product is shipped to the customer.

            Waiting – is simply workers not working, having to wait for whatever reason. It could be reasons such as stock, plates, instruction, or equipment failure.

            Overproduction – job overruns that cannot be easily converted into financial resources. It is the worst wastes since it includes all the other wastes.

            Defective parts – is waste we would usually call scrap. Looking beyond the simple term we see that it is really the making of waste. Now we can easily see the association of time, effort and energy that was required to make that waste and how much it can be.

            Inventory – is the classic waste. All inventories are waste unless the inventory can be translated directly into sales. It makes no difference whether the inventory is raw materials, work in process, or finished goods. It is waste if it does not directly produce sales.

            Movement – is the unnecessary time wasted in the motion of people doing their job in their work place or station – such as press operators looking for tools, or loading stock. All too often, this is overlooked because we like to see people busy. The question is how can we reduce the motion?

            Excess processing – or over processing is the waste of production time, energy, and materials spent on a customer’s job that is beyond what the customer wants and is willing to pay for. In the printing industry this could be the redesigning of a form that could have just been scanned or shot.[3]

            The identification and elimination of these wastes are the bedrock of the entire Lean Methodology. Other improvement practitioners have tried to remove some of these wastes or combine one with another, but the foundation is still sound. Then instead of Lean Management, why not call it Waste Management?

            We use the term Lean because, in the end, the process can run: using less material, requiring less investment, using less inventory, consuming less space, and using less people. Even more importantly, a Lean process is characterized by a flow and predictability the reduction of uncertainties and the general chaos of a typical manufacturing process. It is not only financially and physically leaner; it is emotionally much leaner, reducing employee stress, creating a strong team spirit and a great place to work.[4]

            “The ultimate objective of a lean business system is the elimination of waste from all business activities and processes. Eliminating waste creates new available production capacity by reducing the time spent on non-productive, non-value-adding activities”[5]

            The improvement process of the Lean Methodology is grounded on two main principles Just In Time and Jidoka. Just In Time (JIT) is the technique of supplying exactly the right quantity of material or product, at exactly the right time, and at exactly the right place. It calls for raw materials and components to reach the production operation in smaller quantities as they are needed and not before. In this way the related inventory costs, in all its different applications are kept to a minimum. For example the bindery operation might be able to begin before the job has completely its press run.[6]

            The second pillar Jidoka or “autonomation” is "automation with a human touch."[7] In essence machines are allowed to run on their own with the internal control over their production quality, if a problem arises it will shut down and wait for someone to come and take care of the problem. In this manner problems are caught before they go onto the next operation. In the printing, a problem in prepress should not go on to the press, and poor printing or mistakes should not go on to bindery. Some have labeled “autonomation” as “stop and respond”.

            Many production improvement practitioners have developed different implementation tools to assist in the improvement process, such as one piece flow, pull production, takt time, standard work, and kanban. These are all very good tools in their own right, however our Lean house requires both pillars of JIT and Jidoka to be understood and any tools we use for improvement must apply to both principles.[8]

            There is a widespread belief that the primary benefit of a lean business system is lower costs. This perception is constantly reinforced as companies turn to lean when they’re in financial trouble, to reduce costs in order to survive. But the most significant economic benefit of Lean is that it acts as a powerful enabler of profitable growth, with the ultimate objective being the elimination of all waste from all business activities and processes. Eliminating waste creates new available production capacity by simply reducing the time spent on non-productive, non-value-adding activities. More importantly, this “new” capacity is essentially free because you’re already paying it.

            Think of what you could do if you were given a significant amount of new production capacity that essentially costs you nothing. Work that you’ve always avoided because it was unprofitable now may look very profitable. And customers that you were never able to do business with now suddenly come back on the radar screen. In short, having production capacity that is essentially free greatly expands your opportunities for generating new revenues.[9]

            So, yes, lean can help you control costs. But lean is much more about enabling profitable growth than about cutting costs. It helps your company become more profitable, grow revenue, cut costs, improve delivery time, reduce inventory, and increase customer satisfaction. It also helps develop valuable job skills such as decision making, problem solving, and real team unity. It helps make your own job and workplace work better, by getting rid of a lot of waste – which will save you time and make your work more meaningful[10]

            Mike George founder and CEO of George Group, the largest Lean Six Sigma consulting practice in the United States, and publisher of several books on Lean Manufacturing gave the following four keys to basic implementation into any company, in collaboration with Dave Rowlands, Vice President of Quality for Xerox Corporation, and Bill Kastle, Vice President at George Group. They identify four areas of focus or keys to a successful implementation. They are;

·          Delight your customer with speed and quality

·          Improve your processes

·          Work together for maximum gain

·          Base your decisions on data and facts[11]

            Over the next few sections of this article we will take each of these Key elements and break them down to discuss them in further detail, helping build a foundation for your own development of an improvement plan.

 

References

Articles

Rothenberg, Sandra & Cost, Frank (2004). “Lean Manufacturing in Small and Medium

     Sized Printers”. A Research Monograph of the Printing Industry Center,

     Rochester Institute of Technology

Printing Impressions, (February 2010) “Driven to Succeed Online”

Books

George, M., Rowlands, D., & Kastle, B. (2004). What is Lean Six Sigma?.

     McGraw-Hill, New York, New York

Wilson, Lonnie (2010). How to Implement Lean Manufacturing.

     McGraw-Hill, New York, New York

Wedgewood, Ian (2007). Lean Sigma, A Practitioner’s Guide.

     Prentice Hall, Upper Saddle River, New Jersey

Shingo, Shigeo (1985). The Sayings of Shigeo Shingo, Key Strategies for

     Plant Improvement. Productivity Press, Cambridge, Massachusetts

Stephen R. Covey, (1990). The 7 Habits of Highly Effective People

     Free Press, New York, New York

Besterfield, D., Besterfield-Michna, C., Besterfield, G., Besterfield-Sacre, M. (2003).

     Total Quality Management. Prentice Hall, Upper Saddle River, New Jersey

Internet

Lean Manufacturing Secrects.com (2008). “Lean Manufacturing and the Printing Industry”. http://www.leanmanufacturingsecrets.com/blog/2008/06/17/lean-manufacturing-printing-industry/

Patrick Henry (February 3, 2007). Are you operating a “Hidden Factory of Waste?, PrintCEO.com. http://printceo.com/2007/02/are-you-operating-a-hidden-factory-of-waste

Throughput Solutions (2007). "Flexographic Label Printing" http://www.tpslean.com/flexo.htm

Bizmanualz.com (2005), "Lean Thinking for Process Improvement" part 2 of 3

http://www.bizmanualz.com/information/2005/07/14/lean-thinking-for-process-improvement.html

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[1] The Process for Manufacturing Customers

[2] How to implement Lean Manufacturing, page 21

[3] How to Implement Lean Manufacturing, page 26

[4] How to Implement Lean Manufacturing, page 9 & 10

[5] PrintCEO August 2008 “The Growth Side of Lean” by David Dodd, Blog Reply by Michael Josefowicz

[6] Total Quality Management, page 153

[7] Lean Directions, “The Essence of Jidoka” 2010

[8] Lean Directions, “The Essence of Jidoka” 2010

[9] PrintCEO, “The Growth Side of Lean”, David Dodd August 24^th, 2008

[10] What is Lean Six Sigma?, page 4

[11] What is Lean Six Sigma?, page 9 & 10