Efficiency, waste reduction pay off

Lance Henderson

Trimming the fat is a time-honored business tradition.

Any good business practice is going to emphasize waste reduction and continuous improvement of bottom lines and overall business performance. But unfortunately waste, in all its ugly forms, is inherent in the processes and procedures of just about every business. Manufacturers, specifically, often have complex, multi-step processes that have plenty of places for waste to hide.

To combat waste, several local large manufacturers, such as Samson Rope, Wood Stone and The Ryzex Group, are employing a structured, Japanese-inspired system of workflow management techniques called lean manufacturing. The system simplifies their business by reducing departments and processes down to only the essential elements for maximum efficiency and customer satisfaction.

Chris Ortiz, owner of Bellingham-based Kaizen Assembly, a lean manufacturing consultant with clients from Bellingham to Puerto Rico, said some key wastes inherent in the manufacturing process are overproduction, overprocessing, excess motion, excess inventory, excess transportation, and manufacturing defects.

“These are things that customers don’t care about paying for, but they are inherent in our processes and we must find ways to remove them to make ourselves more efficient and satisfy our customers,” Ortiz said.

In Japanese, “kaizen” means improvement, and that is really what lean manufacturing is all about — to vigilantly monitor and adjust business practices and procedures to rid them of wasteful activities, such as redundant processes and needless travel.

Ortiz said the core ideas behind lean manufacturing came out of Japan during the creation of the Toyota Production System in the late ‘40s.

“It was about this time that the Japanese found that they had to be more competitive with American manufacturers to recover from WWII,” Ortiz said.

Now, American manufacturers are following suit.

Taking the first step in the ‘lean journey’

Ortiz founded Kaizen Assembly in 2005 while living in North Carolina. The company is a full-service consulting and training firm that specializes in “full lean transformations” using all the tools available under the umbrella of lean manufacturing.

“We have consultants, engineers, a full staff of professionals who go into companies and help evaluate the manufacturing processes and come up with year-to-year strategic plans to implement lean,” Ortiz said.

However, most companies come to Kaizen already knowing at least something about the benefits of lean.

“They have read about it somewhere, or they had been to a conference and they know it’s really the best way to go, but they are not sure when to start, how much it will cost, and what it will take to get it started,” Ortiz said.

Ken LaValley, plant manager at Samson Rope, one of Kaizen’s clients, said lean manufacturing came on the scene for them about five years ago.

“We felt it out with some seminars and some classes,” LaValley said. “The way we looked at it, we saw a large opportunity, so we decided to go for it.”

Last year, Samson Rope produced 4.2 million pounds of rope — everything from sailing cordage to tug and mooring lines for oil and gas tankers.

After the company learned about lean, LaValley said they realized they had a problem with product having to be moved all over the plant, which wasted time.

On the shop floor, thread came in and was taken to medium and large twisting machines that twist threads into larger and larger strands for all different types of line, rope and cordage.

Those larger threads were then transported to the opposite side of the plant to all the different braiding machines to be braided into rope.

“So we said, ‘Why don’t we break this down into little production centers with like products and like machines and we can save a whole bunch of running around and confusion,’” LaValley said.

LaValley said he was a little skeptical when he first heard of the idea, but once he saw the savings, he was sold.

“The further we got into it, our cost per pound of production has remained steady or gone down, so the results are obvious,” LaValley said.

The art of continuous improvement

A company that is no stranger to a Japanese-style of business is Bellingham-based Trans-Ocean Products, a surimi seafood processor that is a wholly-owned subsidiary of the Tokyo-based Maruha Nichiro Holdings.

“We typically have one or two Japanese guys working here who are assigned to us from Tokyo,” said Dave Green, Trans-Ocean’s vice president of operations.

Green said Trans-Ocean first got into lean about six years ago.

“Because we are a Japanese-owned company, we kind of have some affiliation with some of those principles, so we struggled along on our own for a while with some lean practices,” Green said.

Since Trans-Ocean is a seafood processor and not a manufacturer, Green said the company has mainly grasped onto the lean idea of continuous improvement with its changeovers and turnaround times, which are any times that the machines are not running, such as for cleaning or configuring for a new package size.

“We have a good, nice continuous flowing process, so the actual production process runs fairly well,” Green said. “The challenge is that non-production time. That’s where the waste comes in.”

After seeing how lean principles can help their business, Green said Trans-Ocean decided to take it to the next level and hire Ortiz and Kaizen Assembly to help the company continue its lean journey in December 2008.

Ortiz said companies come to him with all different experiences with lean manufacturing.

“Our job is to assess where they are and decide what’s the next step for them,” Ortiz said.

Green said one way Kaizen has really helped Trans-Ocean is by organizing “Kaizen events,” which are structured events around a specific improvement area.

“You assign people to work on nothing but that event and it may take three or five days, but we really go after specific goals in a short period of time and we get a lot accomplished,” Green said.

Getting employee buy-in

But how do employees respond to the stress of these changes?

“At first, there are some questions, like ‘What are you doing? What is this all about?’” Green said. “But as we got into it, people have been really excited about getting involved in the events. It’s a chance to learn and a chance to really improve in their specific area.”

Green said Trans-Ocean did a lot of trainings and employees got really excited about how continuous improvement can help to save time.

“Anytime you can reduce work time, you have typically made someone’s job easier and simpler. That was a big motivation for employees to get really involved,” Green said.

Ortiz said when a company is streamlining processes, there can be resistance at all levels from the worker to the CEO.

“A good consultant will find ways to break that resistance, and if you can do that with those who are resistant to change, then they will become the biggest change agents you have ever seen,” Ortiz said. “There’s a lot of diplomacy involved in this.”

LaValley said Samson Rope experienced skepticism from employees at first — until they caught on to the process. After reorganizing its shop floor, LaValley said Samson Rope worked with Kaizen to go cell by cell to streamline and improve procedures.

“With any change like that, you are going to get resistance, but we started with one cell and all of a sudden it was like a light bulb clicked on and people said, ‘Hey, wait a minute, this is actually making our jobs easier,’” LaValley said. “If you don’t have their support, you might as well not even do it.”

Sustaining lean into the future

If change wasn’t hard enough to bring about, sustaining that change is even harder, LaValley said.

“Anyone can go out and clean the plant up, and then two weeks later it looks the same, but we have been very successful with sustaining it,” LaValley said.

Ortiz said he is a firm believer that his job is to teach companies and guide them for whatever time period is necessary until he can let them go.

“We never try to make our clients tied to us forever,” Ortiz said.

Ortiz said before Kaizen stops work with a company, he crafts a continuous improvement program that can be sustained by the company when he is gone.

“It involves developing steering committees and monthly lean meetings,” Ortiz said. “We are really trying to help set the foundation, so when we do leave, they can continue on their own.”

Green said lean principles can be difficult to understand at first, but once you see other companies have success with it — you just have to take a leap of faith.

“If you don’t do it, I really believe you are going to be left by those companies that do,” Green said. “You won’t be able to compete.”

Kaizen on T.V.

Chris Ortiz, owner of Kaizen Assembly, is going to be featured on ‘Inside Business;’ hosted by politician/actor Fred Thompson, as part of its American Industry series, which is aired on a variety of networks including CNBC and Headline News. Shooting for the 30-minute segment will take place at Samson Rope on June 23 and the show will air in August.