About the Author As a Senior Continuous Improvement Facilitator at the Kaizen Institute, Gautam Thakur has more than 14 years of experience with achievement of significant results for the deployment of Lean/Six Sigma initiatives for Fortune 500 organizations. In addition to his extensive work in facilitating and coaching teams on continuous improvement principals and methodologies.
Our client, one of the biggest potash miners, was interested in implementing 5S workplace organization for their Under Ground (UG) Warehouse to satisfy internal stakeholders and operate in the most efficient manner. This created an opportunity to form a team for 5S improvement project which is composed of Kaizen Institute Consultant, Mine Maintenance Superintendent, UG Warehouse Supervisor, UG Planner, Purchasing Manager and other crew employees. We were engaged to develop a roadmap for the project and to guide the team successfully towards the end objective of workplace organization from a Lean perspective.
There were a number of issues contributing to the business case which makes our client believe that why this kind of project was necessary:
- All the warehouse stocking parts were mixed up and it was almost impossible to locate them.
- There was a high degree of customer dissatisfaction when it comes to inventory stocking levels for warehouse items.
- The visual management was completely out of picture and there was no accountability at any of the levels to answer questions.
The investment to set up a new warehouse was approved for $2.2 million. In order to get the real value of this level of expenditure, Kaizen Institute was engaged to lead a local cross-functional team through the process of organizing the workplace and eliminating waste in the entire value chain.
Our Project Plan
We started by using SmartDraw to create a Kitting parts storage process flow in the warehouse area. The program allowed us to layout a process map and identify opportunities for improvement by clearly outlining out the roles and responsibilities of all stakeholders.
Employing a Lean approach, we started with 5S to optimize the existing space which helped us in freeing up additional space to stock relevant parts. The 5S process is a systematic approach to workplace organization and is widely considered the first step in implementing a Kaizen/Lean culture to reduce waste and improve productivity.
Benefits of 5S
The 5S’s should occur in this order, and there must be a plan in place for performing the tasks on a regular basis. Utilizing the 5S process to achieve an organized workplace also has several supplemental benefits. In addition to the immediate visual improvement, organizations will realize:
- Creates proper environment for standard work
- Higher Product quality: By having an organized workplace, the quality of the work will go up.
- Reduce costs: There will be less waste which will ultimately lead to lesser costs
- Reduces downtime and equipment failures: Having all the tools in an organized manner will significantly reduce the time needed to look for tools while performing a job.
- Improves Customer delivery times: Reduction in Lead time for critical items will expedite the process to complete jobs on time.
- Reduces hassles in the workplace
- Creates a safer work environment for all employees.
- Improved Image: An organized workplace is a professional workplace; this is visually apparent when observing an organized workplace.
A PDCA diagram was implemented through SmartDraw which helped the team to understand the importance of Sustainment phase in 5S process.
Root Cause Analysis
SmartDraw was utilized to conduct a root cause analysis exercise with project team to list out the factors related to high lead time for the warehouse items.
This helped the team to first identify and then take required actions to reduce the lead times for some of the warehouse stock items.
As a result, the project team generated a cost savings of $3.8 Million through identification of right parts needed on time to run the warehouse, opportunity savings, Optimum inventory levels and Acceptable Lead times for critical parts. This was a significant improvement when compared to the original situation of the warehouse. The client was really pleased with the effort being put into this and it has now become the benchmark for other sites to follow.