Enterprise-wide lean rollout leads to 57% floor space reduction

Manufacturing News, Source : The Manufacturer US
Published : 07 Aug 2002 16:35

Measurable results from lean manufacturing are in plain view at electronics-enclosure maker Hoffman, where the company’s inventory is down far enough to have eliminated the need for a leased warehouse.

Having reduced the floor space needed for the company’s stainless steel line by 57% doesn’t hurt either.

“We’re seeing finished goods inventory turns are around the 21 range, and our WIP inventory turns are over 200; we’ve had really good results with that,” said Pamela Heller, director of process improvement. “Floor space-wise, in the fall we’re going to be closing down a leased warehouse and bringing whatever product is there back inhouse.”

Heller says her group sees between 30% and 50% reduction in floor space with each lean event. “Then we’ll have successive events where we’ll keep skinning that down.” The reductions are due to cellular arrangement of equipment and less need for inventory storage. [We put] pieces of equipment right next to each other, so we don’t have long conveyers with stuff sitting on them,” she said.

Hoffman began their lean journey, as Heller puts it, three and a half years ago. They were challenged by then-COO Randy Hogan to embrace lean methods. Hogan is now CEO of the $400 million company, based in Anoka, Minn. The initiative began on the operations side and has now expanded into the office area, says Heller. “Everyone is at a different stage across the organization. It’s really taken to this point for people to realize that it’s not going away, that there’s management commitment behind it.”

The company’s current focus is on kanban systems in the warehouse, which Heller says are tied to the company’s J.D. Edwards ERP system. “We’re continuing to look at ways to get inventory down and drive our manufacturing process from sales,” she said. “Some kanban size-calculations we’re doing outside the ERP system, but we use those to drive safety stock requirements within the system. We interface the two.”

Heller, whose current roll is implementing lean in the company’s offices says there isn’t anyone in the organization that’s been untouched by the rollout. She admits that it’s more difficult in the offices than the plant. “We’ve got people who are very unaccustomed to being measured and don’t have measurements in place. People struggle with that.” But the effort revealed a 50% error rate in EDI orders, errors that were being fixed manually, and Heller says it’s now to the point that “I’ve got people coming to me on a regular basis with ideas for kaizen events or for improvements, so it’s almost getting to be a scheduling problem trying to get them all accomplished.”

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