Lean Culture Kick Start
Table of Contents
Client Overview
The client has recently been appointed as the Managing Director of a standalone factory Business Unit that is a part of a large global public company in the electronics manufacturing services industry. The factory, which was acquired as part of the parent company’s competitor acquisition strategy, has been operating for over 10 years and provides reverse logistics repair and return services for consumer electronic products to several well-known companies.
The company is managed by the Managing Director and a team of 10 senior executives, and employs a total of over 300 full-time equivalent employees. The factory generates approximately $120 million in annual revenue. However, the company has experienced consistent quarterly losses over the past two years and employee morale is at its lowest point. In an effort to address these issues, the Managing Director has initiated various improvement initiatives, including Lean Culture Kick Off project.
Objective
Prior to this point, the factory management and workforce have not implemented any structured continuous improvement or lean program. Instead, processes have been developed haphazardly in response to customer requests, resulting in a lack of standardization and inefficiency. This lack of focus on improvement has led to complacency within the operation, contributing to waste and inefficiencies.
The client’s goal is to utilize Liberty Point’s Lean Culture Kick-Off project framework as a catalyst for initiating a larger site-wide business transformation project. This site-wide project will utilize the lean philosophy learned in the Kick-Off project to further promote the adoption of lean culture throughout the operation.
Secondly, the project will achieve a minimum annual cost saving of $500k through implementation of lean initiatives. These initiatives will be integrated into the long-term lean strategy and action plan for the site.
Liberty Point was engaged by the MD to conduct the Lean Culture Kick Off project, which will be subsequently led by the recently appointed Continuous Improvement Manager (CIM).
Method
Liberty Point has proposed a 3 Phase project that aims to educate employees on lean theory, demonstrate the practical benefits of implementing lean techniques through hands-on experience, and foster buy-in for lean practices by involving employees in generating continuous improvement ideas and rewarding their participation.
Critical Success Factors
The critical success factors (CSFs) for the Lean Culture Kick Off project, as with all Liberty Point projects, will be used to assess the project’s success. These CSFs have been defined as follows:
| Critical Success Factor | Success Measure |
|---|---|
|
Provide training to the management team on the principles of lean and the identification and reduction of waste. |
The MD approves all manager's attendance at training. |
|
Phase 1 completion. |
A presentation on the "Lean in Action" project and the "Lean Competition" is held for all employees to mark the official kickoff of the project. The first phase is approved by the Managing Director. |
|
Phase 2 completion. |
5S activity is completed, presented to, and signed off by the managing director. |
|
Phase 3 completion. |
The Lean Competition is initiated, promoted, and completed with at least 40% employee participation. A minimum of $500,000 in annualized cost saving initiatives are generated, and Phase 3 completion is approved by the Managing Director. |
|
Transfer project to CIM. |
The CIM receives all project documentation and recommendations for next steps. The activity is formally completed and approved by the CIM. |
|
A report containing the final project findings and recommendations is been submitted to the MD for approval. |
The final written project report is presented to and approved by the Managing Director. |
Timetable & Resource
The schedule and resource needs for the Lean Culture Kick Off project for this medium-sized client have been established as follows.
Project Budget
The budget has been established with the exclusion of internal fixed costs such as management team and employee time.
Project Walkthrough
The following section presents an overview of the 4-week project. It is important to note that this project has been prioritized by the client and all necessary resources will be made available within the 4-week timeframe. In the event that additional resources are needed, the project may be extended to 6 or 8 weeks, dependent on the client’s availability. It should be further noted that the shorter the duration of the project, the more significant the impact on the organization’s outcomes.
Days 1-3
During the initiation phase of the project, Liberty Point coordinated with the CIM to develop a comprehensive plan for the Management Training and Phase 1 Kick Off activity, including preparing all necessary materials. Additionally, some minor tasks, such as ordering refreshments and procuring Lean-branded shirts, were completed in the preceding week.
Simultaneously, all marketing materials, competition application forms, and process specifications are created for the Phase 3 competition. This is initiated at this early phase due to the competition being initiated at the Phase 1 event.
Day 4
The Liberty Point and the CIM team conduct Management training, which includes a comprehensive overview of the Lean journey, the concept of Lean Culture, and the 7 wastes and their significance in waste elimination. During this session, we also determine the individuals responsible for presenting at the Phase 1 event.
Day 5
The Phase 1 event commences at 11am and involves all employees. Three members of the management team present the project and provide an overview of Lean. The Phase 2 Lean in Action activity is also introduced, as well as the Phase 3 competition. The competition is received, particularly when the five prizes are announced. These prizes are as follows:
Management determines the prizes based on budget and local expectations, but it is crucial that the prizes are significant enough to generate interest and enthusiasm.
Day 6
It’s now 100% focus on the 5S activity. The initial phase involves coordinating with the CIM to devise a plan for the activity, determining which operational areas will be included, and identifying the team members for the 3-day initiative.
Days 7-9
On the first morning, we initiate the 5S process, which consists of sorting, setting, shining, standardizing, and sustaining, by orienting the team on the procedure and explaining the significance of each step.
On understanding the process and expected outcome, the medium-sized, mechanically-operated area was thoroughly examined by the team. The team then approached the task with great enthusiasm, paying special attention to ensuring the CIM was in a coordinating leadership role as he will be responsible for future projects. The result are a resounding success, with a significant difference in the appearance of the work area before and after the project.
On the last day of the activity, the management team are presented with the area, and the employees are given the opportunity to review it at their convenience. The response is positive, with numerous employees expressing interest in the process and a desire for their own areas to undergo similar improvements. The CIM is enthusiastic, although slightly intimidated by the tasks ahead.
Days 6-15
During the competition, the number of entries is continuously monitored. Based on the response rate, additional marketing efforts and reminders may be implemented to increase participation from the workforce.
Days 16-18
During the first three days of the final week, Liberty Point and the CIM review and collate all competition entries. After eliminating three invalid submissions, there are 109 remaining, with 83% submitted by individuals and 17% by groups (consisting of more than one person). Overall, 71% of eligible employees participated in the competition.
Out of the 109 submissions, a certain degree of overlap was identified, with some improvement suggestions being very similar to others. After thorough discussion, a final tally of 74 unique initiatives was reached, resulting in an estimated annualized cost reduction of $954k.
| Initiatve (Waste) Category | # Initiatives | Estimated Annualized Saving |
|---|---|---|
| Overproduction | 12 | $89,000 |
| Inventory | 12 | $186,000 |
| Motion | 14 | $144,000 |
| Defects | 5 | $23,000 |
| Over-processing | 3 | $8,000 |
| Waiting | 16 | $288,000 |
| Transport | 12 | $216,000 |
| Totals | 74 | $954,000 |
Following the creation of a list of 10 entries, a presentation is compiled for the management team. The final step involves determining the winners and presenting the awards.
On the 18th day of the project, the management team was presented with a shortlist of 10 submissions and requested to select the top 5 and rank them in order of preference. The process took slightly longer than anticipated, however, the Managing Director, who possesses strong leadership skills, facilitated a productive discussion and ultimately made the final decision on the top 5 submissions.
A company-wide meeting was held in the early afternoon to announce the winners of the event. The meeting was well received, and the Managing Director concluded the session by expressing gratitude to all attendees and reaffirming his commitment to implementing a comprehensive lean rollout in the future.
Days 19-20
On the final two days, the final project report is prepared and all documentation is transferred to the CIM. A presentation is also made to the MD for approval.
Results
The table below presents the results of the 4 week project in relation to the critical success factors.
| Critical Success Factor | Success Measure | Result | Sign Off |
|---|---|---|---|
|
Provide training to the management team on the principles of lean and the identification and reduction of waste. |
The MD approves all manager's attendance at training. |
The MD approved the attendance of all managers at training sessions. |
|
|
Phase 1 completion. |
A presentation on the "Lean in Action" project and the "Lean Competition" is held for all employees to mark the official kickoff of the project. The first phase is approved by the Managing Director. |
Phase 1 event was held with a participation rate of 93% among employees. Attendance was limited to those who were present at work on the day of the event. The event was recorded for the benefit of those who were unable to attend, and the MD approved the event. |
|
|
Phase 2 completion. |
5S activity is completed, presented to, and signed off by the managing director. |
The implementation of the 5S program was completed and approved by the managing director. The success of the event was highly praised and the rapid transformation generated excitement throughout the facility. |
|
|
Phase 3 completion. |
The Lean Competition is initiated, promoted, and completed with at least 40% employee participation. A minimum of $500,000 in annualized cost saving initiatives are generated, and Phase 3 completion is approved by the Managing Director. |
Phase 1 introduced the lean competition, which was met with enthusiasm. A total of 71% of employees participated and submitted 74 unique initiatives, resulting in an estimated annualized cost savings of $954k. Phase 3 received approval from the Managing Director. |
|
|
Transfer project to CIM. |
The CIM receives all project documentation and recommendations for next steps. The activity is formally completed and approved by the CIM. |
The transfer of all documentation was completed and the subsequent steps were discussed and agreed upon. The CIM signed off. |
|
|
A report containing the final project findings and recommendations is been submitted to the MD for approval. |
The final written project report is presented to and approved by the Managing Director. |
The report was composed and presented to the Managing Director, and subsequently approved by him. |
|
Next Steps...
The project has been highly successful, generating a significant level of enthusiasm within the business. It is important to maintain this momentum and establish lean principles as a integral part of the company’s corporate culture.
As part of the transition process, Liberty Point assisted the newly appointed CIM in developing a lean strategy and action plan for the next quarter, half year, and year. This included implementing a site-wide 5S rollout plan, as well as a systematic rollout of the 74 improvement initiatives identified through the competition.
To underpin this, Liberty Point also supports the CIM with training in holding Kaizen events, value stream mapping, and cause and affect analysis. Additionally, ongoing support is provided to the client as needed, as they are now considered a member of the Liberty Point family.
Testimonial
Copyright@libertypoint.io 2022
Lean Culture Kick Start
Client Overview
The client has recently been appointed as the Managing Director of a standalone factory Business Unit that is a part of a large global public company in the electronics manufacturing services industry. The factory, which was acquired as part of the parent company’s competitor acquisition strategy, has been operating for over 10 years and provides reverse logistics repair and return services for consumer electronic products to several well-known companies.
The company is managed by the Managing Director and a team of 10 senior executives, and employs a total of over 300 full-time equivalent employees. The factory generates approximately $120 million in annual revenue. However, the company has experienced consistent quarterly losses over the past two years and employee morale is at its lowest point. In an effort to address these issues, the Managing Director has initiated various improvement initiatives, including a Lean Culture Kick Off project.
Objective
Prior to this point, the factory management and workforce have not implemented any structured continuous improvement or lean program. Instead, processes have been developed haphazardly in response to customer requests, resulting in a lack of standardization and inefficiency. This lack of focus on improvement has led to complacency within the operation, contributing to waste and inefficiencies.
The client’s goal is to utilize Liberty Point’s Lean Culture Kick-Off project framework as a catalyst for initiating a larger site-wide business transformation project. This site-wide project will utilize the lean philosophy learned in the Kick-Off project to further promote the adoption of lean culture throughout the operation.
Secondly, the project will achieve a minimum annual cost saving of $500k through implementation of lean initiatives. These initiatives will be integrated into the long-term lean strategy and action plan for the site.
Liberty Point was engaged by the MD to conduct the Lean Culture Kick Off project, which will be subsequently led by the recently appointed Continuous Improvement Manager (CIM).
Objective
Prior to this point, the factory management and workforce have not implemented any structured continuous improvement or lean program. Instead, processes have been developed haphazardly in response to customer requests, resulting in a lack of standardization and inefficiency. This lack of focus on improvement has led to complacency within the operation, contributing to waste and inefficiencies.
The client’s goal is to utilize Liberty Point’s Lean Culture Kick-Off project framework as a catalyst for initiating a larger site-wide business transformation project. This site-wide project will utilize the lean philosophy learned in the Kick-Off project to further promote the adoption of lean culture throughout the operation.
Secondly, the project will achieve a minimum annual cost saving of $500k through implementation of lean initiatives. These initiatives will be integrated into the long-term lean strategy and action plan for the site.
Liberty Point was engaged by the MD to conduct the Lean Culture Kick Off project, which will be subsequently led by the recently appointed Continuous Improvement Manager (CIM).
Method
Liberty Point has proposed a 3 Phase project that aims to educate employees on lean theory, demonstrate the practical benefits of implementing lean techniques through hands-on experience, and foster buy-in for lean practices by involving employees in generating continuous improvement ideas and rewarding their participation.
Critical Success Factors
The critical success factors (CSFs) for the Lean Culture Kick Off project, as with all Liberty Point projects, will be used to assess the project’s success. These CSFs have been defined as follows:
| Critical Success Factor | Success Measure |
|---|---|
|
Provide training to the management team on the principles of lean and the identification and reduction of waste. |
The MD approves all manager's attendance at training. |
|
Phase 1 completion. |
A presentation on the "Lean in Action" project and the "Lean Competition" is held for all employees to mark the official kickoff of the project. The first phase is approved by the Managing Director. |
|
Phase 2 completion. |
5S activity is completed, presented to, and signed off by the managing director. |
|
Phase 3 completion. |
The Lean Competition is initiated, promoted, and completed with at least 40% employee participation. A minimum of $500,000 in annualized cost saving initiatives are generated, and Phase 3 completion is approved by the Managing Director. |
|
Transfer project to CIM. |
The CIM receives all project documentation and recommendations for next steps. The activity is formally completed and approved by the CIM. |
|
A report containing the final project findings and recommendations is been submitted to the MD for approval. |
The final written project report is presented to and approved by the Managing Director. |
Timetable & Resource
The schedule and resource needs for the Lean Culture Kick Off project for this medium-sized client have been established as follows.
Project Budget
The budget has been established with the exclusion of internal fixed costs such as management team and employee time.
Project Walkthrough
The following section presents an overview of the 4-week project. It is important to note that this project has been prioritized by the client and all necessary resources will be made available within the 4-week timeframe. In the event that additional resources are needed, the project may be extended to 6 or 8 weeks, dependent on the client’s availability. It should be further noted that the shorter the duration of the project, the more significant the impact on the organization’s outcomes.
Days 1-3
During the initiation phase of the project, Liberty Point coordinated with the CIM to develop a comprehensive plan for the Management Training and Phase 1 Kick Off activity, including preparing all necessary materials. Additionally, some minor tasks, such as ordering refreshments and procuring Lean-branded shirts, were completed in the preceding week.
Simultaneously, all marketing materials, competition application forms, and process specifications are created for the Phase 3 competition. This is initiated at this early phase due to the competition being initiated at the Phase 1 event.
Days 1-3
During the initiation phase of the project, Liberty Point coordinated with the CIM to develop a comprehensive plan for the Management Training and Phase 1 Kick Off activity, including preparing all necessary materials. Additionally, some minor tasks, such as ordering refreshments and procuring Lean-branded shirts, were completed in the preceding week.
Simultaneously, all marketing materials, competition application forms, and process specifications are created for the Phase 3 competition. This is initiated at this early phase due to the competition being initiated at the Phase 1 event.
Day 4
The Liberty Point and the CIM team conduct Management training, which includes a comprehensive overview of the Lean journey, the concept of Lean Culture, and the 7 wastes and their significance in waste elimination. During this session, we also determine the individuals responsible for presenting at the Phase 1 event.
Day 5
The Phase 1 event commences at 11am and involves all employees. Three members of the management team present the project and provide an overview of Lean. The Phase 2 Lean in Action activity is also introduced, as well as the Phase 3 competition. The competition is received, particularly when the five prizes are announced. These prizes are as follows:
Management determines the prizes based on budget and local expectations, but it is crucial that the prizes are significant enough to generate interest and enthusiasm.
Day 6
It’s now 100% focus on the 5S activity. The initial phase involves coordinating with the CIM to devise a plan for the activity, determining which operational areas will be included, and identifying the team members for the 3-day initiative.
Days 7-9
On the first morning, we initiate the 5S process, which consists of sorting, setting, shining, standardizing, and sustaining, by orienting the team on the procedure and explaining the significance of each step.
On understanding the process and expected outcome, the medium-sized, mechanically-operated area was thoroughly examined by the team. The team then approached the task with great enthusiasm, paying special attention to ensuring the CIM was in a coordinating leadership role as he will be responsible for future projects. The result are a resounding success, with a significant difference in the appearance of the work area before and after the project.
On the last day of the activity, the management team are presented with the area, and the employees are given the opportunity to review it at their convenience. The response is positive, with numerous employees expressing interest in the process and a desire for their own areas to undergo similar improvements. The CIM is enthusiastic, although slightly intimidated by the tasks ahead.
On understanding the process and expected outcome, the medium-sized, mechanically-operated area was thoroughly examined by the team. The team then approached the task with great enthusiasm, paying special attention to ensuring the CIM was in a coordinating leadership role as he will be responsible for future projects. The result are a resounding success, with a significant difference in the appearance of the work area before and after the project.
On the last day of the activity, the management team are presented with the area, and the employees are given the opportunity to review it at their convenience. The response is positive, with numerous employees expressing interest in the process and a desire for their own areas to undergo similar improvements. The CIM is enthusiastic, although slightly intimidated by the tasks ahead.
Days 6-15
During the competition, the number of entries is continuously monitored. Based on the response rate, additional marketing efforts and reminders may be implemented to increase participation from the workforce.
Days 16-18
During the first three days of the final week, Liberty Point and the CIM review and collate all competition entries. After eliminating three invalid submissions, there are 109 remaining, with 83% submitted by individuals and 17% by groups (consisting of more than one person). Overall, 71% of eligible employees participated in the competition.
Out of the 109 submissions, a certain degree of overlap was identified, with some improvement suggestions being very similar to others. After thorough discussion, a final tally of 74 unique initiatives was reached, resulting in an estimated annualized cost reduction of $954k.
| Initiatve (Waste) Category | # Initiatives | Estimated Annualized Saving |
|---|---|---|
| Overproduction | 12 | $89,000 |
| Inventory | 12 | $186,000 |
| Motion | 14 | $144,000 |
| Defects | 5 | $23,000 |
| Over-processing | 3 | $8,000 |
| Waiting | 16 | $288,000 |
| Transport | 12 | $216,000 |
| Totals | 74 | $954,000 |
Following the creation of a list of 10 entries, a presentation is compiled for the management team. The final step involves determining the winners and presenting the awards.
On the 18th day of the project, the management team was presented with a shortlist of 10 submissions and requested to select the top 5 and rank them in order of preference. The process took slightly longer than anticipated, however, the Managing Director, who possesses strong leadership skills, facilitated a productive discussion and ultimately made the final decision on the top 5 submissions.
A company-wide meeting was held in the early afternoon to announce the winners of the event. The meeting was well received, and the Managing Director concluded the session by expressing gratitude to all attendees and reaffirming his commitment to implementing a comprehensive lean rollout in the future.
Days 19-20
On the final two days, the final project report is prepared and all documentation is transferred to the CIM. A presentation is also made to the MD for approval.
On the 18th day of the project, the management team was presented with a shortlist of 10 submissions and requested to select the top 5 and rank them in order of preference. The process took slightly longer than anticipated, however, the Managing Director, who possesses strong leadership skills, facilitated a productive discussion and ultimately made the final decision on the top 5 submissions.
A company-wide meeting was held in the early afternoon to announce the winners of the event. The meeting was well received, and the Managing Director concluded the session by expressing gratitude to all attendees and reaffirming his commitment to implementing a comprehensive lean rollout in the future.
Days 19-20
On the final two days, the final project report is prepared and all documentation is transferred to the CIM. A presentation is also made to the MD for approval.
Results
The table below presents the results of the 4 week project in relation to the critical success factors.
| Critical Success Factor | Success Measure | Result | Sign Off |
|---|---|---|---|
|
Provide training to the management team on the principles of lean and the identification and reduction of waste. |
The MD approves all manager's attendance at training. |
The MD approved the attendance of all managers at training sessions. |
|
|
Phase 1 completion. |
A presentation on the "Lean in Action" project and the "Lean Competition" is held for all employees to mark the official kickoff of the project. The first phase is approved by the Managing Director. |
Phase 1 event was held with a participation rate of 93% among employees. Attendance was limited to those who were present at work on the day of the event. The event was recorded for the benefit of those who were unable to attend, and the MD approved the event. |
|
|
Phase 2 completion. |
5S activity is completed, presented to, and signed off by the managing director. |
The implementation of the 5S program was completed and approved by the managing director. The success of the event was highly praised and the rapid transformation generated excitement throughout the facility. |
|
|
Phase 3 completion. |
The Lean Competition is initiated, promoted, and completed with at least 40% employee participation. A minimum of $500,000 in annualized cost saving initiatives are generated, and Phase 3 completion is approved by the Managing Director. |
Phase 1 introduced the lean competition, which was met with enthusiasm. A total of 71% of employees participated and submitted 74 unique initiatives, resulting in an estimated annualized cost savings of $954k. Phase 3 received approval from the Managing Director. |
|
|
Transfer project to CIM. |
The CIM receives all project documentation and recommendations for next steps. The activity is formally completed and approved by the CIM. |
The transfer of all documentation was completed and the subsequent steps were discussed and agreed upon. The CIM signed off. |
|
|
A report containing the final project findings and recommendations is been submitted to the MD for approval. |
The final written project report is presented to and approved by the Managing Director. |
The report was composed and presented to the Managing Director, and subsequently approved by him. |
|
Next Steps...
The project has been highly successful, generating a significant level of enthusiasm within the business. It is important to maintain this momentum and establish lean principles as a integral part of the company’s corporate culture.
As part of the transition process, Liberty Point assisted the newly appointed CIM in developing a lean strategy and action plan for the next quarter, half year, and year. This included implementing a site-wide 5S rollout plan, as well as a systematic rollout of the 74 improvement initiatives identified through the competition.
To underpin this, Liberty Point also supports the CIM with training in holding Kaizen events, value stream mapping, and cause and affect analysis. Additionally, ongoing support is provided to the client as needed, as they are now considered a member of the Liberty Point family.
Testimonial
Copyright@libertypoint.io 2022