Case Study: Corrugated Containers and Plastic Bags
Rebuilding a Poor Performance within a Global Company
Manufacturing – Paper Products
- Improvement of process to meet global standard
- Elimination of wasteful processes
The client is a manufacturer of corrugated cardboard and carboard packaging products with 40 plants located around the world, including one in Belgium. A senior management review of the entire global company resulted in a listing of the plants in descending order of efficiency and profitability. The Belgian operation appeared in the lower third. This was not good news to the executives of the Belgian plant, who turned to Zerwaste for advice on how to improve.
A review of the plant’s operations showed immediately that there was too much inventory, representing too much cash spent and too much material sitting idle. Lead times for product orders were too long, design and manufacturing costs were too high, and delivery was substandard.
The Lean Solution
Following the philosophy that “you can’t manage what you can’t measure,” and embracing the principles of Six Sigma, we established metrics for every facet of the commercial process, starting with marketing and business development, all the way through to manufacturing, delivery, customer service and aftermarket commerce.
Perhaps not surprisingly, the plants in the top third of the global analysis were hesitant to share their secrets and successes, a somewhat ironic strategy, but one that provided us the opportunity to dive deeper into the operations and ultimately surface with a superior plan.
We devised internal metrics that sought to support and encourage the actions required to become a world class producer. To do this we used a root cause analysis program including the 5-why questioning technique, which essentially asks a question and then asks “why” to the response, and to the subsequent response, and so on.
To make it interesting and to engage the employees who felt somewhat uneasy at having their actions investigated, members of our team posed as new hires who were to be “shown the ropes” of a particular procedure. Their instructions were that the new hires were only to ask “why” questions or “what if” questions. The plant employees were informed that these “new hires” were only playing a role, since we wanted to establish trust in the investigative process from the very beginning. We also wanted to ensure the employees that their own jobs were not in danger – something that might cause them to hold certain information back.
The results of the 5-why questioning brought in data that allowed us, in conjunction with the team, to develop an inventory reduction target, and an improved on-time delivery procedure. We then shifted our focus to changing the corporate culture, giving teams autonomy to set their own objectives.
Within six months, inventory costs were reduced by 75%, a culture of continuous improvement was established, and within one year, the Belgium plant emerged within the top one-third of the next year’s global listing.