ACIG N-Letter 36

Y O U R PA R T N E R I N A C H I E V I N G
Contact
Gerard Colla
9650 7222
BEST PRA CTICE
PRODUCTIVITY CONTINUES TO BE THE HOT
ISSUE FOR MANUFACTURING
The latest Australian Industry
Group/PricewaterhouseCoopers manufacturing
survey for Australian industry shows a continuing
fall in production and sales, amid rising raw
materials costs. This continues the trend from
earlier in the year and follows the worst annual
decline in sales volumes in 14 years, recorded in
2005.
How should businesses respond to these pressures?
Many have already said they will be concentrating
on cost-cutting to increase productivity and
competitiveness, while others are developing new
products, looking to export or increasing use of
imported materials.
There are many ways to respond in these
circumstances, where a major challenge is to cut
costs without damaging long-term capability. Here
are some ideas:
✔ Focus on profitable products and cut the
unprofitable ones. Many companies do not know
the true costs associated with each product or
service and consequently which are profitable
and which are not – now is the time to find out.
✔ Look at the productivity of all the workforce –
sales, marketing, purchasing and administration,
not just the direct production workforce. Who is
really adding value?
✔ Drive out waste, in all its forms. All processes
contain waste that can be eliminated – wasted
materials, rework, wasted time, quality rejects,
mistakes and so on. There are many tools in the
Lean Manufacturing toolkit to help you eliminate
waste.
✔ Get closer to your customers and deliver what
they really want. Do you measure customer
satisfaction and more importantly, do you know
what underlies it and how to change your
business to increase it?
✔ Foster innovation and leadership in the
management team. New product, process and
management ideas are critical for success in hard
times.
ACIG can help you develop an integrated plan to
maximise your productivity and business
performance. Our total check-up can assess the
health of your company and identify opportunities
for improvement. For a no obligation discussion,
please call Gerard Colla on (03) 9650 7222.
AUSTRALIAN CONTINUOUS
IMPROVEMENT GROUP PTY LTD
www.acig.com.au
NUMBER 36
IN THIS ISSUE:
GODFREY HIRST
LEADERS IN CARPET
GODFREY HIRST –
LEADERS IN CARPET
BENALLA SPINNERS
LAUNCH THEIR LEAN
JOURNEY
Their carpets may be soft but Godfrey
Hirst has always been a hard player, in a
tough industry. After all, they’ve survived
PRODUCTIVITY
for more than 140 years amid increasing
CONTINUES TO BE
competition, reducing tariff protection
THE HOT ISSUE FOR
and changing consumer tastes. Yet
MANUFACTURING
Godfrey Hirst continues to thrive as a
major player, leaving many of its
competitors by the wayside as it grows from strength to
strength.
Godfrey Hirst was established in 1865 in Geelong to
manufacture woven fabrics from Western District wool,
and today manufactures high quality carpets and floor
coverings from a variety of natural and synthetic fibres.
The company has led the industry through product
innovation and vertical integration. The company now
produces both woollen and synthetic carpets and owns
woollen and synthetic spinners, including Fibremakers.
3. Aligning structure with strategy. Tim is also
working on ensuring the structure of Operations
supports his strategy. This means ensuring roles and
responsibilities are clearly linked to the strategy,
making sure the right people are in the right jobs and
the jobs are organised to maximise efficiency. For
example since Lean is a fundamental strategy, Tim has
established a Quality and Improvement Manager role
and plans to rotate suitable candidates through this
position regularly, thereby providing management focus
on Lean and continuous improvement as well as giving
a range of people experience developing and managing
the improvement process.
ACIG People – Anne Best
Meet Anne Best, ACIG’s Office Manager. It is often Anne’s voice
that greets clients when they call. She handles all aspects of our
administration, from client enquiries, to invoicing and keeping the
accounts. Anne’s friendly and unruffled style has had a positive
impact on us all.
Anne joined ACIG after working for some years in the financial
services industry. At home she enjoys gardening, reading and acting
as family transport manager at the weekend!
Australian Continuous Improvement Group is a specialist group addressing the best practice needs of the
public and private sector. Our skills cover implementing continuous improvement processes which have a
customer focus, meet strategic goals and achieve culture change. For advice, contact any of our named
Directors, Consultants or Managing Director, Gerard Colla.
These notes are not intended to be comprehensive. Readers are therefore advised that before acting on any matters arising from these notes, they should discuss the
situation with a director of the firm.
Edition Number 36 ©2006 - Australian Continuous Improvement Group
203 DRUMMOND STREET CARLTON VICTORIA 3053 AUSTRALIA
TELEPHONE (03) 9650 7222 FACSIMILE (03) 9650 7088 e mail editor@acig.com.au www.acig.com.au
PAGE 4
2. Aligning processes and systems to deliver value.
Tim is a strong believer in the Lean Thinking approach
across all areas of the business. Although Godfrey
Hirst has long had improvement programs, Tim is
gradually introducing the Lean philosophy. Many
managers have attended training workshops, AME
events and Innovation Insights visits to gain exposure
to new ideas. Tim has initiated a 5 S program, starting
with a successful implementation at Benalla Spinners.
Tim believes that 5 S is a powerful first step in
changing the culture of an organisation through
involvement, giving employees responsibility for their
work areas. Tim has also initiated projects on reducing
changeover times, increasing flow, reducing inventory
and reducing waste, improving product development,
improving raw material quality and improving inprocess quality
Tim Maishman (above), Group Operations Officer at
Godfrey Hirst, shared his thoughts with us about how he
plans to lead Godfrey Hirst’s operations to yet greater
strengths, by:
1. Staying attuned to customer needs and wants.
Carpet stirs the emotions of its customers, especially
those buying for the home, because it is highly visible,
making a major impact on room aesthetics. A large part
of customer value is therefore based on the purchasing
experience rather than just measurable qualities of the
product. Availability, quality and service also contribute
to the customer experience. It is important, then, to
tune the business so that it delivers value as perceived
by the customer. Godfrey Hirst achieves this by
developing an appreciation for the customers’ needs
through market research and retailer feedback and also
establishing and setting market standards for delivery
lead times, quality and service.
4. Innovating with products and processes. In many
long-established companies the knowledge is held by a
few long-serving and experienced employees, especially
where the technology is considered more of an art
than a science. In these cultures you will often hear
“we tried that before and it didn’t work”, as innovation
is stifled and newcomers give up trying as the
experienced hands maintain the status quo. Godfrey
Hirst has experienced its share of this problem but
Tim doesn’t believe in sacred cows, he wants
everything challenged.
5. Measuring performance. Another key area for Tim
is ensuring there is a comprehensive measurement
system that reflects and supports Godfrey Hirst’s
strategies. In an approach similar to the Balanced
Scorecard, Tim measures the fundamentals such as
financial performance, occupational health and safety,
quality and environmental performance, coupled with
measures of efficiency and waste, IFOT (In Full & On
Time delivery), customer satisfaction and service
response time.
PAGE 1
YOUR PARTNER IN ACHIEVING
YOUR PARTNER IN ACHIEVING
BEST PRA CTICE
BEST PRA CTICE
Contact
Mark Ley
9650 7222
BENALLA SPINNERS LAUNCH
THEIR LEAN JOURNEY
Benalla Spinners is on a journey to improve performance and cement its place as a leading provider of woollen yarn
to the carpet industry. The journey involves everyone applying Lean Manufacturing concepts to their work, and it is as
much about culture change as it is about reducing waste and improving flow. They have only just started their
journey, but the early signs are encouraging and the results positive.
Located in Benalla in rural Victoria, Benalla Spinners employs 140 people from the area and has been operating for 35
years. Spinning is an ancient process and has been mechanised on a large scale since the industrial revolution. The
process starts with bales of wool fibres that are passed through a blending machine that combs the fibres until they
eventually form a thick rope called a sliver. The sliver is then drawn out and twisted and spun to produce a yarn.
S 1 – Leon Dyer & Tony Mennen Red Tagging
S 2 – Line Marking by Operators
The first team, in Spinning, was led by Alan Croxford on the Day Shift and Tony Mennen on Afternoon Shift. Leon Dyer
and Terry Armstrong coordinated the team. Alan told us that before 5 S “people think they are doing the right thing,
then you find out lots of things that help you improve. At first, you think, ‘this is not going to work, how will it
improve our area’, then afterwards everyone is on top of it and 5 minute cleaning goes to 2 minute cleaning which
makes a difference. Marking trolley positions, tools storage and even broom racks made the job easier.”
The first step in their Lean journey was to implement 5 S, a workplace organisation program that gets everyone
involved in the improvement process. Because it is about organising the workplace, 5 S is a sound foundation for a
good Lean program, creating a clean and well organised environment, facilitating process flow and reducing waste.
An important first step for any 5 S program is to make someone responsible for its implementation. In Benalla
Spinners case it is Mark Lessing, Factory Manager. Mark organised the pilot teams and their training, then worked
with the teams as they progressed through the 5 S’s.
Before…
…After
The second team - Carding - was led by Leon Dyer and Terry Armstrong. We asked them what advice they would give
to anyone else undertaking 5 S. Terry told us: “I would start with the supervisors and leading hands first, take them
through the system and get them up to speed, then bring in the people from the shopfloor. It is extremely well taken
up by most of the workers.” Leon said that 5 S gives a focus for what to do, day-to-day. “To be competitive you need
to embrace these methods and you need to have someone allocated to follow it through and sustain it.”
We asked Mark where he thought Benalla Spinners would go to from
here. He said “we plan to continue with 5 S in the rest of the mill. We
are going to continue to spruce up the place and look to improve and
streamline all the areas. In the longer term we see ourselves embracing
Lean Management and Manufacturing, using tools such as value stream
mapping.
Mark Lessing, Factory Manager, Benalla Spinners
Mark told us that one of the biggest challenges was to get everyone ‘on-side’, across all three shifts. “New, younger
employees were ‘on-side’ easily enough with the cleaning and sweeping, but people employed for a long time were
more resistant or suspicious of the changes, concerned it might be a management ‘fad’. They often have their own way
of doing things that is different to people on other shifts.”
Mark started implementing 5 S in a pilot area in Spinning so he could roll it out in a manageable way. He and others
could learn in the process and modify the approach to ensure success. The pilot also served as a showcase for
others, proving the benefits of 5S to them.
Once the team members were selected Mark organised training in the principles of Lean and 5S. The training was
brief and involved immediate hands-on application on the factory floor. The teams spent about 3 days implementing S1, S-2 and the beginnings of S-3. They then met regularly over a period of eight weeks to progress through S-4 to S-5.
PAGE 2
“It is a great credit to our people that they have adapted to the new
principles and made the improvements.”
“Visitors from other mills regularly comment on how clean it all looks,
even visitors from other industries comment similarly on how clean and
orderly the place looks, even that Benalla is the cleanest mill in
Australasia.
“The distance we have travelled, from where we were to where we are
now, is unbelievable and there is still room for improvement.”
Carding: Greg Webster, Robert Cooper, Terry
Armstrong, Gavin Lakeman and Leon Dyer
ACIG can help you in your Lean journey, whether you are taking the first steps or whether you are well on
the way. Call Mark Ley on (03) 9650 7222.
PAGE 3
YOUR PARTNER IN ACHIEVING
YOUR PARTNER IN ACHIEVING
BEST PRA CTICE
BEST PRA CTICE