Sometimes play is work, and I am not just talking about for kids either. Smart companies have been using simulations and games to identify problems and solutions for years. This strategy has become very popular in lean manufacturing approaches designed to identify waste and improve efficiency.
Most pallet companies are too busy filling orders to focus on lean manufacturing principles. But progressive companies make lean a priority. When visiting the Kamps Pallet operations last fall, I was struck by the fact that this company had a full-time employee whose primary job is to think lean and drive continuous improvement for the company.
Kamps may be able to afford it because the company operates in 11 different markets with 20 manufacturing locations in Michigan, Indiana, Ohio and Kentucky. But small companies should get in on the act too.
More than just talk, Kamps has Continuous Improvement Vision Statement that guides the company’s quest to reduce waste. See sidebar on page 21.
Mark Wright, the director of continuous improvement at Kamps helped me see how what he does drives efficiency at one of the largest pallet companies in the Midwest.
Whenever he visits a facility, Wright explained, “The first step is to look at the profit & loss statement to identify areas where a facility is struggling and not meeting key performance indicators (KPIs), such as labor rates, plant costs, on-time delivery, safety, quality issues, etc.”
Wright has worked as a lean expert in the automotive and metals industries in the past. He said, “Right now our key focus at Kamps is to come up with the right measurements to identify waste. The reason is that what you measure drives behavior. And the next thing is to dive deeper into all those areas to eliminate or greatly reduce the identified waste and remove costs.”
For example, Kamps has studied the flow of material through some plants and has worked to optimize facilities, including a new facility recently developed near Detroit. Wright added that the company did a number of things to improve process flow. This included adding extra docks, knocking down walls and moving around work stations to optimize the flow.
Just over a year in that facility, the company has increased efficiency by 30% since the operation begun, and it still has a way to go. At the Detroit facility, the company doesn’t measure Overall Equipment Effectiveness (OEE) yet, but management does track Total Labor per Unit to identify labor rates for cost of goods sold.
One very effective tool at Kamps has been lean games or roll playing exercises that inspire workers and managers to think about how to do things more efficiently.
The dot game is a popular simulation where you break down operations into key categories. For example, a pallet recycling operation can be broken down into sort, break down/disassembly, heat treatment, pallet repair and shipping. You give workers dots to represent different functions and have them run back and forth doing their function in round one. Employees in this round can’t talk with each other. It is intended to be total chaos. Don’t be surprised if production is not good.
Then do a second round where process improvements are instituted, which gets you closer to single piece flow operations to minimize inventory issues. And in the third round, you look at smoothing production and optimizing the work cell.
These games are intended to help people realize how much time can be wasted or on the other hand efficiency improved through small changes. Wright stated, “Then we break out a small profit & loss statement to show how much money you make by improving the operation flow because many people don’t realize how what they do every day effects the profitability of the company… You can see the lightbulb go off.”
The KPIs at Kamps are safety, quality, on-time delivery and costs based on labor and material cost per unit. Kamps has regional financial analysts who do a lot in terms of identifying costs. And this is based on information provided by floor managers and local offices.
Wright commented that the company is working on better improving data management by moving to use Microsoft Dynamics, a software tool that will help the company track costs and identify lean opportunities.
Wright concluded, “My mindset has always been if you set up the right KPIs, the profit & loss statement will follow and produce the results you want.”
Lean Games
http://goo.gl/rpvNaI
Kamps Continuous Improvement Vision Statement:
Through strategic use of our Continuous Improvement tools, we will become Better Every Day by:
1. Using Metrics and KPI’s to measure our success and identify more opportunities for improvement.
2. Identifying and implementing Best Practices to Standardize our work.
3. Identifying and eliminating Waste within all aspects of our business.
