Serving up change
A fresh approach to continuous improvement has enabled a plastics technology group to make major savings.
Over a period of several months up to early 2006, a team of half a dozen employees at a Belgian plant of plastics technology group Borealis set about trying to solve a quality problem on a production facility there.
The installation, involving two parallel lines of machines, was producing unacceptable levels of non-prime material and yet there seemed to be no obvious cause.
But the team, which included a couple of shopfloor operatives as well as a specialist in extrusion technologies, was not deterred. Instead, they set about collecting all relevant data and subjecting it to evaluation and examination using 'brainstorming' sessions and 'pareto analysis' techniques. Before too long, one of the operators noticed a discrepancy between the figures for the two sets of machines and the root cause was soon traced to a leak that was happening in one of the lines but not in the other. The problem was quickly fixed and, with the addition of supplementary changes to start-up and material changeover procedures, the whole exercise is now estimated to be saving the company nearly €200,000 a year with minimal direct outlay.
As an example of team-based problem-solving the instance is impressive and further confirmation that a manufacturing company's workforce often constitutes a 'knowledge base' whose effective exploitation can generate major benefits. It is a lesson that many companies have learned over the past couple of decades through the implementation of 'continuous improvement' programmes, whose origins can generally be traced back to the influence of Japanese manufacturing techniques on their European and US counterparts.
Nevertheless, in the case of Borealis the instance had a particular significance. As Jari Lehtinen, project manager with Borealis in Finland, concedes: "Not too long previously no one within the company would have believed it possible to find a solution to this problem."
The fact that in this case the outcome was so positive was neither a surprise nor an exception. That is because the project was one of the earliest in a structured continuous-improvement programme that Borealis has rolled out to around 20 of its plants located in Finland, Belgium, Germany, Sweden and Austria over the past three years in close cooperation with UK consultants OEE. The whole approach, in fact, has now been embedded within the company's day-to-day procedures under the title 'The Borealis Way'.
Lehtinen says that the company had become aware over the first half of the decade that it was not always getting the best out of its people, procedures and hardware. It had sought to implement a continuous improvement strategy and had done enough to confirm that improvements could be made. "We weren't short of measures," he notes laconically.
But, though the exercise had not been futile, a number of factors had conspired to blunt its overall effectiveness. Lehtinen cites, for example, the company's growth and the need to integrate various acquisitions. The consequences, he explains, included the lack of a "common approach" right across the company and a failure to ensure that the early momentum was maintained.
"Sometimes changes did not embed once the initial focus was lost," he says. So, in 2005 a fresh start was made with the support of OEE and a clear chain of responsibility in which Lehtinen became programme manager for the implementation phase of the initiative.
Lehtinen explains that a key concept in the new strategy was that of 'overall asset effectiveness' (OAE), which would be measured by appropriate 'key performance indicators' (KPIs). But in turn that required the formulation of an analytical and application process comprising five distinct stages. These were definition, analysis, solution, implementation, and review.
It was at this point that the experience and fresh input of OEE began to tell. The company assigned four members of staff to the project including lead consultant Justin Havens. Havens says that while there are bound to be common elements across all continuous improvement programmes, there are also ways in which a specific programme needs to be customised to the particular requirements of the company involved.
In the case of Borealis and its previous, somewhat equivocal experience of continuous improvement, these requirements included a slow but methodical build-up from a few initial projects, cumulative management support as early projects produce results, an emphasis on sustainability, and an ability for the programme to be largely self-funding.
Havens remarks that this approach embodies a degree of flexibility, while retaining a focus on tangible benefits. "It is not a slavish approach that must be followed at all costs," he explains. "It is a roadmap of practical guidelines on how to select the most appropriate tools and how to apply them in the best way."
One of the particular benefits of doing things this way, he adds, is that it recognises that different locations are at different stages of development and will require their own specific way of doing things.
Lehtinen, for his part, endorses this need for flexibility. He cautions, for example, that any company operating across several different countries - even advanced Western European ones - will find itself encountering different assumptions and even negotiated agreements about appropriate responsibilities for particular grades of personnel.
An important early step in getting the whole project under way, though, was to appoint and train a group of 'facilitators' with the skills to ensure that individual projects could be seen through to a successful conclusion. Initially, this was the responsibility of a small central team involving both Havens and Lehtinen, which identified relevant individuals to be lead facilitators in each country involved. The responsibility for identifying further appropriate personnel at the level of individual plants, however, was devolved to local managements.
Lehtinen says that all the individuals chosen have tended to be already in supervisory positions of some sort with the lead facilitators usually in a more senior age group. So far around 50 facilitators have been selected or an average of two to three individuals per plant. The seriousness with which the whole initiative is taken by the company can be gauged by the fact that the lead facilitators in each country - by definition experienced and valuable members of staff - spend what Lehtinen and Havens estimate is around half of all their working hours on tasks related to the initiative.
The training of facilitators - generally a couple of days in generic skills such as problem-solving and personal communications - remained the responsibility of the central team. Havens says that the normal procedure was for OEE personnel to go to the selected individuals' place of work to deliver the tuition.
On the surface this seems a more inefficient way of accomplishing the task than by having a single central 'classroom'. But in practice it was deemed to be the best way to integrate a sense of involvement on the part of local managements, with the establishment of a standardised set of skills across the company in order to ensure a reasonable degree of homogeneity in procedure.
Interestingly, Havens adds that it was not necessarily the case that training preceded the identification of a potential project. On occasion it was the other way round. "Sometimes people brought a project with them to the training sessions," he notes.
By the end of last year, 95 projects had been started of which 43 have been concluded. Like that initial project at the Belgian plant, the focus has for the most part been on identifying and resolving "losses", as Lehtinen puts it, at specific points in the production cycle and then calculating the overall impact on the company's efficiency.
The identification of individual projects has, again, been very much the responsibility of local managements. Indeed, Lehtinen says that the identification and fulfillment of a certain number of continuous improvement projects on the part of individual plants has now itself become a KPI. "We are looking to do about 50 this year," he adds.
Lehtinen emphasises that the whole initiative has passed beyond the point where it can be viewed as an experimental project and has become embedded in the company's day-to-day culture.
The Borealis Way has, in short, become a way of life.
In formal terms this was signalled by the transfer of responsibility for the management of the initiative from the start of this year from Lehtinen to the company's quality department. In practical terms it is manifested in the way that the company is seeking to ensure that the practical knowledge and experience gleaned on completed projects is diffused throughout the company in order to enhance the effectiveness of new ones.
A short report on all completed projects, for example, is now written up afterwards by a team member and made available on a corporate intranet.
The justification for continuing with the initiative is self-evident from the figures. The company's own calculation is that by November last year the various projects involved had delivered savings worth more than €5m and are on course to achieve nearly triple this by the end of this year. "No major investment" was required to achieve that, though the company does not disclose any figure.
In fact, when both Lehtinen and Havens provide their assessments of the initiative, the essential point on which they both concur is the fundamental simplicity of what has occurred. The company has implemented, they agree, "a team-based problem-solving methodology" that uses commonplace techniques to define issues and find solutions. It then ensures that the results of projects are available throughout the company to help refine and enhance further projects.
The fundamental factor, though, is summarised by Lehtinen. "There has been a culture change," he says. "This initiative has improved the way we improve."