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Argus Industries, a mid-sized manufacturer based in Winnipeg, embarked on a journey into kaizen several years ago, aimed at optimizing its enterprise resource planning (ERP) system. The program vastly improved productivity, and sparked a new culture of efficiency and waste reduction at the company.
In fact, Argus is a lean manufacturer that embraces change with open arms, not as a one-time fix or an occasional efficiency drive, but as an integral element of a thriving, innovative, and humanistic corporate culture.
Kaizen—translated loosely from the Japanese, means “good change.” Masaaki Imai, founder of the Japan-based Kaizen Institute, defined kaizen as: “…continuous improvement in the personal life, home life, social life and working life.” Even more profoundly, Imai taught that kaizen was a “…state of mind that encourages everyone to consider it unusual when conditions do not continuously evolve.”
Applied to a manufacturing company, kaizen indicates continuous improvement for managers and workers alike. Ideally, this creates a culture of empowered employees who focus on eliminating waste in systems and processes. Enough of these incremental gains over time can add up to a valuable competitive advantage. As such, kaizen is sometimes referred to as the cornerstone of lean manufacturing.
Argus Industries opened in 1962 as a distributor of portable toilets. In 1985, the company made its first molded product – a rubber seal for portable toilets. Today, the custom manufacturer is headquartered in Winnipeg with a branch plant in Pickering, Ont. and over 80 employees.
Its offerings comprise rubber molded products and custom die cut gasket seals, with clients from agriculture to aerospace, including companies in heavy electric construction, mass transit and mining.
“We make products as tiny as clips that go on heart monitors,” says vice-president of finance Leslie Galbraith, “as well as bulkhead seals for airplanes and silicone shaker balls for the potash and grain industries.”
In 2009, says Galbraith, the role of CEO at Argus was assumed by Michael Easton, the company’s former vice-president of production. Easton, who had already implemented lean practices on the shop floor, now championed the adoption of lean across the entire company.
“It was an exciting and interesting time,” says Galbraith. “When you go lean on the production floor it changes how everything looks and flows. To visualize how that would work in other divisions was difficult at first but as we discovered, it was well worth our time.”
In line with Easton’s drive for lean, Galbraith, who has been with Argus since 1998, began to take a deeper look at the company’s ERP software. “In ’98 we were using SYSPRO’s Impact Award, and we were on the brink of upgrading to Encore. I began to wonder if SYSPRO was the right fit for us, and investigated several other ERP systems. In the back of my mind, however, I knew that we were not utilizing SYSPRO to anywhere near its full potential.”
In 2010, Galbraith attended a SYSPRO conference in Dallas. “That was my moment of inner realization. It was then that I began to understand the real strengths of ERP and what it could do for us. It was also a validation that staying with the ERP we already had was the right thing to do.
“I came back from that conference a SYSPRO superuser and cheerleader all in one. We had already invested a good deal of time and energy in moving the production floor to lean, and I was certain there was a lot we could do for the front office people, as well.”
Argus’s executive team, swayed by Galbraith’s vision and enthusiasm, decided to start investing in ERP and in June 2012, the company upgraded to SYSPRO 6.1. “When we flipped the switch,” says Galbraith, “we saw some of our pains disappear.
“The following weekend, SYSPRO guru Ajay Saxena arrived from Ontario to spend a week with Argus, living and breathing our processes. Ajay came up with some potential opportunities for improvement, and identified MRP as a critical missing link in what we were doing. From that, our kaizen event was born.”
A kaizen event, or kaizen blitz, is an extremely focused short-term project, often orchestrated by a consultant, that aims to improve one or more business processes. Argus’s event was five days long, and presided over by Ajay Saxena, senior systems consultant for SYSPRO Business Solutions.
“Argus is a unique client,” says Saxena. “Going into their kaizen event, they already knew that they wanted to improve their practices, and they already had a team in place to start the project. Typically we have to get the client to buy into lean manufacturing and kaizen, which simply does not happen unless the whole corporate culture is onboard, from the CEO to the people on the shop floor,” he adds.
“At Argus they knew what they wanted and they came prepared. They already knew what kaizen meant—the philosophy and the process. That made their kaizen event an easy and enjoyable project.”
“We had to learn best practices,” says Galbraith, “but we also needed to find out what we wanted our ERP to do, and to see if our hopes and dreams were viable. The best way to move forward in an organized, structured way was a kaizen event. The event comprised a full evaluation of our supply chain process, from order entry to fulfilment.”
A lot of changes came out of our kaizen event that resulted in enormous payback in terms of customer satisfaction, employee satisfaction and employee engagement.
In order to let the kaizen team focus on what they were doing, adds Galbraith, the rest of the organization had to respect the time it was spending away from the daily functioning of the company. “We had support and participation from all corners and levels of the organization, and the fact that the voices for change started at the senior level made it that much easier.”
One of the kaizen team—process unit leader and data entry team leader Mario Vechina—is a certified computer electronic technician who received Level One Lean Certification in December 2011.
“Ajay taught us a ton of different things during our kaizen event,” says Vechina. “SYSPRO is a huge program and we were only using a portion of it. With Ajay’s help we were able to automate processes that used to eat up a great deal of our time.
“One of the biggest gains for my department was to auto-generate the job card and have it linked to sales orders. That lets us automatically attach production drawings to the backside of the job cart. That’s much faster than the old way, which involved physically finding and attaching the drawings, and would take two to 10 minutes per line. A 45-line PO that might have taken 3.5 hours to prepare the old way now only takes 30 to 45 minutes. That’s a huge savings.”
Vechina is also grateful to Saxena for showing the group how to do advanced trial kitting. “We now enter a single finished part number or a list of finished part numbers, run the advanced trial kit, and it lets us know if we have any material shortages. Before I get back to a customer on delivery dates I know exactly what inventory is in stock,” he says.
“The old way was horrible – we had to type in the raw-material part numbers individually to make sure we had enough. Advanced trial kitting has created a huge benefit on the customer service side.”
Kaizen does more than improve productivity. It also eliminates unnecessarily hard work, teaches people how to spot and eliminate wasteful processes, and humanizes the workplace.
“Because of our tribal culture here,” says Vechina, “we’re encouraged to think for ourselves and work towards continuous improvement. The people invited to the kaizen event were very involved, and everybody was open to change. We were tired of the pain that comes from inefficient processes, and we wanted to make it better.”
“The benefits we reaped were amazing,” says Galbraith. “We were doing many things in an archaic fashion, and we weren’t using SYSPRO to nearly its full potential. A lot of changes came out of our kaizen event that resulted in enormous payback in terms of customer satisfaction, employee satisfaction and employee engagement,” he says.
“It opened people’s minds to bringing their thoughts forward. We now have ‘Team SYSPRO’ e-mail, and on average I get three suggestions a week on how we could modify SYSPRO to better improve our processes. The whole team has access to that e-mail and there are improvements happening every day.”
Towards the end of the event the kaizen team made a value graph to chart the opportunities it hadn’t had the chance to address. “Since then,” says Galbraith, “70 per cent of what we plotted has been implemented, and the other 30 per cent will be addressed in the future. Even if it’s a small step at a time we keep moving forward.”
Asked to quantify the event in terms of ROI, Galbraith demurs. “We didn’t go into this for monetary ROI . We went into it for the tribal ROI, and that we definitely have. It was an amazing event to be part of. Even now when I speak of it, it resonates as a very positive journey. The team that started the week was not the team that finished the week. At the end we were a mini-tribe within the tribe. An event like this can’t really be quantified, except in terms of questions raised and problems solved.”
Complementary to his drive for lean manufacturing standards, CEO Michael Easton championed a profound change of corporate culture at Argus Industries. By flipping the standard org chart upside-down, he created a culture in which lean and kaizen are likely to thrive.
“Think of Argus as a tree,” says Easton. “If you invert the org chart, the CEO isn’t at the top any more. He’s at the bottom of the tree where the roots are. It’s my job to protect those roots and to provide nutrients for the entire company. Practically speaking, I support the VPs, who in turn support the managers, who support the workers at the top of the tree.
“Those are the people who touch the fruit–our products–and who reach out to our customers. It’s the people on the shop floor punching out the gaskets who are making what the customer really wants. They’re the experts, and the rest of us are here to support them. That’s the core foundation of our company – our tribe. We are, at heart, a service culture.”
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Odete Passingham is the marketing director at SYSPRO Canada. SYSPRO is an ERP application consisting of finance, distribution and manufacturing controls for mid-size companies. To contact Odete, email: email@example.com or call (604) 451-8889. Learn more about SYSPRO at www.syspro.com
This article is part of the Manufacturing Growth & Innovation Centre, showcasing strategies for manufacturers on the move.