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RALLYING BEHIND

LEAN
Education, data and kanban drove
slow and steady success at Victaulic
By Dina Manoway

Lean manufacturing principles often seem like common sense eliminate waste
to boost productivity and improve quality. According to
research from the Lean Enterprise Research Centre, which estimates
that as much as 60 percent of a manufacturing operation fails to provide any
value to end customers, implementing
lean should be fairly straightforward.
But the reality is much more complex. Lean is not a starting point or a
switch that can be flipped to build a better business overnight. Being lean is the
result of a well-run operation, one that
can be achieved only with careful plan-

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ning, education and a full understanding


of what issues need to be addressed to
enhance productivity.
Studies vary on the success rate of
lean implementation efforts, as between
50 percent and 90 percent of lean efforts
do not lead to the results a company expected. Such a discouraging statistic may
keep some manufacturers from taking
the plunge into lean, but the advantage
of a successful lean program often outweighs the tribulations. As examples,
General Electric used lean to cut the
amount of fuel it uses to test jet engines
by 50 percent, while 3M used lean principles to reduce waste generation by 30
percent.

With this history in mind, Victaulic


Co., which manufactures mechanical
pipe-joining systems, recognized that
its lean implementation would take time
but could be worth it in the end.
The company, which employs nearly 4,000 people in 14 facilities and 29
branches worldwide, began implementing lean in stages, beginning in manufacturing before expanding it across all
of its branches and businesses. Companies can learn from Victaulics success
by implementing their own lean efforts
the same way. By making changes incrementally, the nascent lean program
provided clear direction at each milestone, focusing its attention on each lean

process change as it occurred. Coupling


change management with a strong determination to seek continuous improvement, Victaulics lean implementation was embraced by the workforce.

Educate and engage


for long-term success
A common misconception of lean is that
it is a top-down directive when it truly is
a bottom-up endeavor. Making employees at every level part of the lean implementation process is crucial to success.
According to a recent survey of lean
implementers by IndustryWeek, trust between managers and employees is a key
factor that tends to be missing.

Approach this problem by making


it clear that all employees play a role in
executing lean processes. From day one,
train new hires to identify potential inefficiencies. At Victaulic, the training
helps employees become familiar with
the companys use of lean principles
through a hands-on workshop teaching its principles, the philosophies behind lean and how workers can use their
newfound knowledge to continue the
evolution and advancement of manufacturing.
Lean is a continuous process that
never will progress without employee
involvement. This epitomizes the core
of why lean must be implemented at

the bottom and work its way to the top.


Who better to spot inefficiencies that
fail to provide customer value than the
people who perform the tasks?
Educating employees on what to look
for and empowering them to bring forward and help implement ideas is a key
to any companys lean implementation
efforts.
Companies will find that this approach boosts employee morale. Employees feel better about their job when
they know management is willing to
hear their concerns. The workers also
take pride in ownership when they
participate in and see their ideas for improvement put into practice.

July 2015 | Industrial Engineer

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Rallying behind lean

FIGURE 1
Pair employee engagement with education, and dont be afraid to learn best
practices from other organizations. In
fact, lean leaders at Victaulic learned
from other companies that the best way
to communicate with employees was to
identify and train the leaders who would
execute the lean implementation plan.
These leaders were responsible for getting the plan off the ground and keeping it going. They would help create the
lean implementation plan, run events,
develop clear goals, measure progress,
address problems and perhaps most
importantly work with employees to
turn their ideas into actionable lean processes.
Selecting the right leaders was crucial.
Focus on developing a cross-functional
team, hand picking individuals with
good communication and training
abilities, forward thinking attitudes and
change management skills necessary to
drive effective change in their department. At Victaulic, these leaders also
represented different areas across the
business, including sales, quality, operations, customer care, supply chain and
finance to name a few. Ensuring key
departments were aligned made the lean
implementation more seamless and impactful.

Driving lean with data


Any company that wants to succeed in
implementing lean manufacturing has
to understand the importance of using
data to inform and measure its decisions. Any large manufacturing operation has thousands of metrics it can use,
but it must identify the ones that drive
key performance goals if it wants to be
successful.
Victaulics program reached for the
traditional lean goals of increased safety,
improved customer delivery, increased
productivity, increased inventory turns
and decreased turn backs. A turn back is
anything in the manufacturing process
that stops or slows down the cycle time
or process. A turn back can be down
time for setups or machine breakdowns,

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The 7-year fix


Over a seven-year period, Victaulic Co.s lean program dramatically decreased
recordable injuries at the companys operations worldwide.

delay for waiting for parts or tooling,


scrap (since you lost a whole cycle to
scrap), rework time or even something
like having to open up packaging to get
to parts.
The data accompanying each metric
told the company where it could make
changes to have the biggest impact on
each goal. By first using data to learn
where Victaulic needed to improve,
then measuring the result of its changes,
the companys lean program took a major step forward. Organizations looking
to improve their operations with lean
can achieve the same results using this
process.
Visual reminders are important in any
continuous improvement program, and
metric boards were developed to track
progress throughout the lean implementation process. The boards compare a
facilitys progress versus its goals, thus
becoming an important tool to evaluate
lean implementation.
The boards should display three key
pieces of information:
Status: Where are you in the process
of making an improvement?
Analysis: How do you keep moving
it forward?
Action: What will you do to get
there?

Displaying the metric boards prominently gives all employees an immediate


sense of what their facility is working on
and reinforces that implementing lean
takes persistence and endurance.
Additionally, focusing on specific key
performance indicators (KPIs) drives
improvement. Victaulics lean program
sought to reduce recordable injury rates
globally through fostering a culture of
concern and behavior-driven safety. As
per Figure 1, Victaulics injuries recorded rate dropped nearly 87 percent during a seven-year period. Through a lean
initiative called the hazard identification
program, the safety focus was measured
with the number of hazards reported
and the number of hazards remedied. By
identifying and removing hazards, injuries have been reduced across all Victaulic facilities, and the company has embraced a strong belief that every accident
is avoidable, every injury is preventable
and everyone is responsible.
Another KPI developed through lean
implementation was customer delivery
rates of stock and nonstock products. In
2002, before lean was part of the Victaulic process, customers sometimes would
wait a long time before their orders were
fulfilled. The result was dissatisfaction
and lack of trust in the company. Only
64.7 percent of stock items were deliv-

FIGURE 2

Customer delivery
The lean program increased on-time delivery rates to more than 97 percent for both
stock and nonstock items.

ered within 48 hours, and just 32.4 percent of nonstocked items were delivered
by their promised lead-time, as shown
in Figure 2.
Through lean initiatives, most notably the switch from a push system to a
pull/kanban system, todays delivery
rates top 97 percent for both stock and
nonstock products. Quality took center stage in a company culture shift as
employees took an active role in moving
the needle closer to customer satisfaction
by making sure products were delivered
on time, fully correct and with product
integrity intact.

Kanban:
A signal for production
Developed at Toyota and named after the Japanese word for visual signal,
kanban is a way of managing production and the supply chain. By breaking
inventory up into container quantities,
when a container is emptied, a visual
signal is generated to alert factories that
material, whether that material is a finished good at a distribution center or an
internally manufactured or purchased
component, needs to be replenished.
Additionally, in-process kanbans are
used to eliminate the long supply chain
for purchased materials and items that
go through multiple manufacturing
steps. For example, having all components for a coupling on kanban and in
a supermarket next to the assembly pro-

cess shortens the lead-time for the finished good by eliminating the upstream
manufacturing or purchasing processes
needed to make or buy the components.
Using kanban can completely transform
a companys supply chain, as it did for
Victaulic.
Prior to implementing lean, Victaulic
factories operated the same way many
others across the industry do. They estimated how many parts to produce
based on old history in monthly buckets and with poor forecasting, made
them in large batches and transferred
them between distribution locations to
keep supply levels balanced. This led to
double handling, wasted capacity and
excess labor, all things lean manufacturing is designed to identify and eliminate
because they provide no value to a customer.
In the new pull system, every time
a container quantity was emptied, it
triggered demand. This allowed for
more frequent and smaller quantities
to be produced at the factory. The factory could then manage its production
schedule far better and improve the supply chain dramatically. This improved
process, along with the implementation
of Victaulics new product delivery system, cut delivery time from 30-plus days
to three to eight days on average, enabling the company to react nimbly and
quickly to customers changing needs
around the globe.

Customer benefits
improve partnerships
At its core, lean principles are about using minimum resources to create maximum value for customers.
Victaulics supply chain transformation displays this well. For customers, a
better supply chain meant shorter leadtimes and meeting commitment dates.
Shorter lead-times meant they could
set their own schedules with more certainty. They were quick to point out to
Victaulic officials when faster parts delivery made a difference in finishing a
project on time or even ahead of schedule. As a result, Victaulic elevated its position from being a product supplier to a
problem-solver, making it a much more
valuable partner.
Once the initial product delivery
strategy of replacing push with pull/
kanban was completed (along with a basic introduction of the rest of the lean
tools), putting site leaders in place and
training employees to make lean principles part of the companys culture
brought about significant lean improvements. Known as facilities excellence
mapping, this program ensures that lean
and lean Six Sigma tools are used continuously to drive out waste in all facets
of business. This enabled Victaulic to
make dramatic changes to some of its
longtime processes.
For example, at the Victaulic Forks
Facility, one change included reconfiguring the manufacturing floor to
cut down on wasted movement and
increase employee safety by eliminating repetitive stress. This move reduced
incidents and injuries. Reorganizing entire facilities resulted in the operation of
fewer vehicles, reducing equipment and
fuel costs. Simple things like arranging
equipment together in U-shaped configurations in the order it is used, along
with bigger changes such as putting
components at their point of use, greatly
reduced the use of fork trucks.
Lean advantages began to emerge as
employees and leaders became more adept at spotting ways to improve. Three

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Rallying behind lean

Lean boosts black gold


Whats an oil producer to do when crude oil prices
drop precipitously? Turn to lean production.
Reuters news service reports that Hess Corp.
has cut about $400,000 from the cost of each
North Dakota well in the past eight months, along
with sharply reducing the time it takes to drill a
new well. Company officials said applying lean
manufacturing can keep its 1,200 Bakken wells
profitable as long as U.S. crude oil prices stay
above $40 per barrel.
This stuff really does work when you have a
culture that is behind it, Hess President Greg Hill
said. We havent even scratched the surface.
Since the first quarter of 2012, the companys
well costs have dropped 47 percent in the Bakken
to about $7.1 million, according to Reuters. Hess
hopes to cut that to $6.8 million this year. And the
time to drill a new well has dropped 51 percent.

of these reconfigurations in forks manufacturing have been completed to date,


and a fourth one is in the works.
Another major process improvement
at this facility reconfigured the finishing department. In this case, the entire
process was looked at through different
eyes than ever before. A team of operators and management held a number of
baseline and standard workflow events
and then met with a long-term vendor
to change the way castings were handled
and finished.
A new type of conveyor, along with
a computer-controlled lorry car and a
variety of chutes and new casting bins,
replaced the extremely manual and labor
intensive method of processing castings.
The lean team also used employee input to manufacture ergonomically enhanced workstations and incorporated
the paint line so castings could be inspected and hung directly for painting.
The results included greatly reduced
lead-times, handling, personnel fatigue
and delays in this process. The Victaulic

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Forks Facility saw a productivity improvement of 35 percent, along with less


fatigue and fewer mistakes.
Victaulics piping products Dalian
manufacturing facility saw similar success. In 2010, the facility moved locations, offering up the opportunity to revise the layout more efficiently. To make
the most effective change, the Dalian
site used the success from its Forks Facility, implementing similar lean practices.
Workers were engaged and involved in
making improvements, metrics boards
were added and suggestions were made
for how to improve workflow and reduce material handling.
The result was an 80 percent layout
change of the facility, which established
Victaulic Piping Products Dalian as a
flagship factory. It also showed how the
lean program could develop a repeatable
lean process and expand its success across
the globe.
The before-and-after difference from
implementing lean manufacturing is
clear. The companys lean team now

feels it has reached the point where lean


truly is part of the culture that drives
how it works.
Using data-driven root cause analysis
keeps one-time problems from turning
into perpetual challenges. As lean became more ingrained, the company was
able to experience an environment of
continuous improvement.
Victaulics measured approach and
ongoing emphasis on employee engagement helped it avoid the pitfalls that
commonly derail lean implementation
efforts. Other companies of any size, in
any industry, can learn from this track
record of improvement to make their
own lean efforts a success.
Dina Manoway is director of business processes at Victaulic, where she manages the
companys global lean program, including
manufacturing and business processes. Under
her direction, Victaulic has improved branch
stocked product availability to more than 97
percent and reduced lead-time for nonstock
products by 66 percent.

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