Consultancy Solutions Limited

Business Transformation, Lean & Operational Excellence Case Studies

1. Synlait Farms

Company:

Synlait Farms. Based in Darfield. Canterbury, Synlait has 14 dairy farms spread over nearly 4,000ha, some 13,000 cows and 85 employees.

Objective:

Synlait Farms had been growing for a number of years and was looking for an improvement framework that would engage employees remove frustrations and irritations. DairyNZ has a strong relationship with Synlait and attended the majority of the training sessions. Research by DairyNZ suggested that this was the first time an improvement methodology such as Lean had been undertaken in a Dairy farming environment.

Training:

Training was delivered at two levels based on the Lean Groups Competitive Edge Programme.

Senior Leadership Team-14 staff

Productivity Improvement Teams-48 staff

The overriding concept was learning by doing, employees learn how to undertake 5s, Value Stream Mapping, Root Cause Analysis by actively participating and applying them to their work. The Leadership team also work on other activities so they understand how to lead and manage Lean.

Outcomes:

The following extract is taken from a recent article in the Dairyatwork online magazine.

“Lean management principles, which focus on adding value and eliminating waste, have transformed the company’s approach since it created its own version of them in early 2012.

Synlait co-founder and CEO Juliet Maclean says the company, which made its first dairy conversion in 2001, was confident that it had the basics right, but wanted an extra challenge to focus and continually improve its processes. Adopting a set of business principles more commonly used in manufacturing – and that had never before been used in a dairy farming operation – shows just how far they were prepared to go.

InSynC (derived from innovation, Synlait and continuous improvement) has six goals - reducing waste, engaging the team, developing an innovative culture, adding value for customers, taking care of every individual and the environment, and enhancing work and financial performance.

Identifying ‘waste’ – overproduction (excess grass), motion (time wasted looking for things), waiting, inadequate processes, transport, defects and storage – has also streamlined processes. Employees are encouraged to focus on no cost or low cost ways to make improvements.

As a result of implementing the 6S principles in milking sheds, Synlait estimates that it is now saving 15 minutes per employee per day. That might not sound like much, until you multiply it out across 80+ people all saving 58 hours each a year. That increased productivity is equivalent to employing an additional 2.5 extra team members, which would have cost around $90,000 if they were to achieve these gains pre InSynC.”

The full article can be viewed at http://www.dairyatwork.co.nz/industry/lean-production/

2. Perry Group

Company:

The Perry Group was formed in 1954 by Brian Perry. From its early beginnings the Perry Group has become a well-established and highly respected privately owned enterprise based in the Waikato.

With a number of companies in the group training was focused in the two cornerstone companies, Perry Resources and Perry Metal Protection.

Objective:

Perry Resources has five quarries around the Waikato and Auckland whilst Perry Metal Protection (galvanising) has plants in Hamilton, Auckland, Tauranga, Christchurch and Wellington. There was a desire to improve organisational performance and engage staff.

Training:

Perry Resources and Perry Metal Protection chose to undertake the Competitive Edge programme separately. Working at both the Senior and productivity level the following number of staff have been trained.

Senior Leadership Team-13 staff

Productivity Improvement Teams-90 staff

With an overriding approach of learning by doing everybody completed training in 5s, Value Stream Mapping, Root Cause Analysis, workflow and visual management. The Leadership teams also developed Lean Processes to sustain the Lean journey.

Outcomes:

Both organisations have seen many improvements over the last two years, highlighting two:

1.The Hamilton Galvanising site has increased its productivity by 54%. The plant had an original production rate of 2.6 dips per hour and has increased to 4. The on-site team focused on the following key areas:

A robust 5s programme, including regular audits.
Identifying and removing waste in the process through Value Stream Mapping.
Introducing real-time measures at the galvanising bath, identifying problems using Pareto analysis and removing them through root cause analysis.

2.The quarrying part of the business has seen the following improvements

66% reduction in aggregate chip wastage through stockpile modifications and management – Waingaro Quarry
15% improvement in cone crusher throughput by modifying chute design – Tauhei Quarry
40% reduction in loader idling time and 30% increased throughput in drying plant – Hutchinson Road Quarry

The following information is taken from case studies commissioned by Department of Labour and completed by an independent consultant.

3. Hill Laboratories

33% of the workforce is trained in 5s (out of 260), the remainder to be trained internally
One Opportunity For Improvement (OFI) implemented a saving worth $10,000 pa
More space has been created in what were formerly cramped conditions. This has eliminated the need for expensive refurbishment
Between 20-25% more samples are now moving through the same sized space with greater ease (an initial objective for adopting “lean”)
They can now accommodate more growth in volume with the same resources more easily. Under the previous set-up any growth would have created enormous pressure
Everyone is learning about the power of small but continuous improvements and “getting the hang” of making them happen
Staff are clearly happier and more motivated

4. Nu Farm

The company used to hold $6.5 million in stock – that has now been reduced to $1 million.
They also used to do 3 batches of production per week but now complete 7 batches without any changes in staff numbers.
What used to take a week to produce now takes 2 days.

“We thought we were doing things well and understood our processes. But no matter how good you think you are there is always room for improvement. Lean helps you focus on and find waste. It delivers. It is easy for managers to get bogged down in segregated areas such as sales, or on technical issues and equipment. Lean focuses on and gives you a method for dealing with the processes that link it all together.” (Country Manager)

5. Pacific Aerospace Limited

A 42% increase in productivity
Cancelled a $350,000 investment that had been approved but was no longer required
Quality has also improved with the normally “fussy” CAA now “gushing off” about how good the aircraft are. Warranty claims are now few and far between

This has saved heaps of time and hassle – everything is within 1-2 meters of work and looks good. Tools don’t go missing and are better maintained and the tool guy has been released to work on the floor.” (Fuselage Aircraftsman)

“The improvements we make are subtle, not dramatic, but the results are quick and have a big affect. Little things count.” (Team Leader)