Since first arriving on the business landscape several decades ago, lean business practices have helped companies in many industries around the world become more efficient while reducing waste and saving on costs – including some in the wooden pallet industry.
The main gist of lean business practices is maximizing value for customers while minimizing waste and thus using fewer resources.
“It’s a complete business system for organizing and managing the key parts of a business – being product development, operations or manufacturing, suppliers and customer relations,” said Chet Marchwinski, director of communications at the Lean Enterprise Institute (LEI). “The benefit of lean is that it requires less effort, less space, less capital, less material and less time than traditional management systems. And you will find that you create products with fewer defects compared to traditional management systems.”
There are several widely used systems that are comparable to lean and many more company-specific ones. Some of the most well-known ones include the Toyota Production System (TPS), Six Sigma, and Theory of Constraints. Although there are many specific differences between the various systems, the end goals are the same. Over the years, the systems have developed and become well defined, backed by research and experience. Though it can seem complex and difficult to implement when first encountered, at their core, lean practices are based on common sense and can be beneficial to any company looking to improve its productivity, decrease its costs or reduce its waste.
Why Companies Go Lean
Most companies that implement lean or similar practices do so to deal with a problem it is coping with. Richard Hatkoski, owner of Commercial Pallet in Baysville, Ontario is one such company. Before buying the company, Hatkoski had worked as a production manager at an automotive accessory supplier where he spent six years learning about the Toyota Production System directly from Toyota. He began implementing lean practices as soon as he bought the pallet company because he saw a lot of waste and disorganization in the company’s pallet production.
“Commercial Pallet was previously run in a top down management style with batch and que production methods and it was terribly messy and disorganized,” said Hatkoski. “Immediately, I could see that there were many forms of ‘waste’ in the production of pallets and wood packaging.”
The results have been successful for Commercial Pallet. Improvements in different areas added up to a larger collective benefit.
“By simply organizing the plant and eliminating the clutter, I started to see a decrease in injuries, material damage and equipment breakage,” said Hatkoski. “By organizing the work so that it flowed through the plant, the crews became more self-directed and efficiency improved. By creating a finished goods pull system, scheduling of the plant was easier and there was less fire fighting.”
PalletOne Inc., the largest pallet manufacturer in the United States has also implemented lean manufacturing practices at all its locations and seen significant benefits. Beyond just improving the efficiency of the company, Howe Wallace, the president and chief executive officer of PalletOne, said that it has changed the way the entire company thinks.
“Lean is designed around trying to identify sources of waste in the things you do with time, with materials and with people,” said Wallace. “Educating our employees on how to look at an operation with lean insight has helped us to think about ways in which we can streamline our operations. The principle behind lean is that no customer wants to pay for something that’s not adding value. So to constantly be in search and taking steps to eliminate waste makes a lot of sense. It’s reformed the way we look at things.”
Lean manufacturing and similar systems work so well for pallet operations because they are dealing with assembling products to customer specifications.
Hatkoski said, “TPS is primarily about building what the customer wants, when they want it, doing it safely, efficienty and correctly, the first time. The pallet and wooden packaging industry takes a raw material and makes a finished product to a customer demand so all aspects of TPS were applicable.”
How to Start with Lean
For companies interested in implementing a lean business system, it is important to define a business problem, make sure the owners or management believe in the idea, have a designated lean leader, and obtain education and training on the principles.
Defining a business problem gives a reason for the changes and effort that lean practices require. The reason could be company survival, competition, saving costs or one of many possibilities.
“You’re not going to do this just for the sake of doing it,” said Marchwinski. “There has to be a good business reason for it, and you have to understand what that is.”
Having the owner’s or management’s support is critical because without it, there is no way that such a large scale change of company culture could be successful.
“Make sure the owners buy in,” said Wallace. “Because if the leaders don’t buy in, it’s not going to happen.”
The person designated to be in charge of a lean conversion is called a “change agent” in some systems and, according to the Lean Enterprise Institute, should have the willpower and drive to initiate fundamental change and make it stick. At the beginning, this ability is more important than having detailed knowledge of lean principles. The change agent can work with an expert or pull from many resources to gain the knowledge that is needed throughout the process.
Gaining the necessary knowledge is still fundamentally important, however. For any company interested in finding out more about lean, the Lean Enterprise Institute is a good resource. It is a non-profit organization that focuses on educating companies about lean practices and has a mix of free and paid resources available. Its website, http://www.lean.org, has numerous articles and excerpts that explain how it works, the concepts and steps needed to start implementing. It also has regular training and workshops available for companies that want to send workers to learn more.
For an even simpler starting point, Hatkoski recommends the simple step of taking the time to clean up at the end of the work week and prepare for the next, which is a simple way of describing one of the main tenets of lean manufacturing, “5S”.
“Just take the last hour of production on a Friday and have everyone begin to clean up their work areas and get everything ready for Monday morning,” Hatkoski said. “That is very basic 5S – Sift, Sort, Sweep, Standardize and Sustain. If something has dust on it, either get rid of it, put it into long term storage or make it into something else. You will gain back the hour in the next week. TPS is continuous; once you think you’ve finished, you have just begun again.”
