Reducing waste, maximizing profits with lean manufacturing

You’ve probably heard of the ‘5S’ methodology that makes up the foundation of lean manufacturing, but in today’s volatile industry it seems only one ‘S’ matters: survival.

A still-recovering economy means survival is the key word on the minds of most small and medium-sized business operators as they look to cut waste and maximize profit.

But sometimes the best way to reduce waste and squeeze out the biggest profit is to take “a systematic approach for good housekeeping.”

Re-enter 5S and enter Rajesh Bali, WinCatt Manufacturing and Services manager with McCoy Corp.

As a global energy services firm, Edmonton-based McCoy has its fingers in many proverbial pies.

A maker of a wide variety of energy industry products, it’s not always easy for McCoy to keep track of the little details involved in its many manufacturing processes when management is tracking more than $50-million in sales.

But with focus and dedication, Bali and his team at McCoy have laid out the blueprint for 5S success, proving manufacturers small and large can successfully implement lean strategies in their operations—especially in trying times.

“Your efficiency is improved, waste is reduced and it impacts the bottom line,” Bali said of the benefits of implementing such a methodology while speaking at the Western Manufacturing and Technology Show (WMTS) in Edmonton.

“I’m pretty sure all companies would appreciate an increase in profit.”

Considered the foundation of lean manufacturing, the 5S principle is made up of five primary phrases: sorting; straightening (set in order); systematic cleaning (shine); standardizing; and sustaining.

The first step in the 5S process, sorting, involves organizing tools, parts and materials on the shop floor, keeping only what is required and eliminating what isn’t.

Straightening, or setting in order to flow, is the second step, and requires much more time and attention.

Though it may sound simple, straightening involves reorganizing workers, jobs, equipment and parts on the shop floor in a way that caters to natural work flow.

At McCoy, Bali and his team spent plenty of time analyzing the straightening principle, creating current value stream maps to track employee movements, calculating time wasted finding tools, parts and materials used in the assembly process.

From there, the McCoy team created future value stream maps that plotted out new layouts for work areas that maximize efficiency through convenient, correct organization of all tools and materials used during the assembly process.

“If I spend more than five seconds looking for a part I’m wasting time,” Bali said of what the restructured value stream maps need to outline.

When applied correctly, the principle can eliminate most or all non-value-added processes in manufacturing.

In fact, according to Bali’s experience, identifying issues when applying the straightening principle can cut production time by as much as 60 per cent.

“I’m not going to lie and say it’s an easy thing to do,” he said. “It takes a lot of work, but it’s worth it.”

Systematic cleaning, or shine, involves cleaning the workspace and all equipment and keeping it that way.

Allotting time at the end of a shift for employees to restore their work area readies it for the next shift and ensures order is sustained.

Standardizing simply means documenting procedures and making those rules par for the course throughout the plant.

This has a two-fold benefit, according to Bali, as it gives employees a go-to resource to double-check that they followed procedure, and allows for interchangeability among employees.

Finally, the sustaining step means just that—maintaining discipline and adherence to the guidelines from all employees.

“We are doing all these things to reduce waste,” Bali said.

And it’s that reduction of waste that acts as the gateway to your lean implementation.

As the foundation to lean manufacturing, the 5S methodology is the jumping-off point for going lean, helping you operate with the minimum resources required to deliver just what is needed, where and when it is needed, in just the time required.

Rather than letting the traditional formula of ‘cost + profit = price’ dictate your revenue, flipping to ‘(fixed) price – cost = profit’ lets you control your profit when going lean through increased efficiency and reduced waste, according to Bali.

To put it simply, if you drive down the cost while keeping the quality high, you have more control of how much money you make—without increasing prices.

“If you don’t have lean in place you can’t pinpoint your profit,” Bali said. “If you’re an inefficient manufacturer you just don’t know.”

It’s hard to argue with that approach to survival.