LaserBond - a case study in Business Process Improvement using Lean
LaserBond started as a family venture in the early 90s. The engineering firm identified and nurtured their pioneering approach to laser technology and was able to educate their customers of the substantial benefits of their system.
LaserBond’s customers operate in capital-intensive industries, including mineral and food processing, mining, agriculture and manufacturing, and they rely heavily on equipment running at peak performance over long periods of time. Operating from sites in Sydney and Adelaide, they specialise in the manufacture and reclamation of components and assemblies, often for critical applications that require optimised surface properties.
The company’s vision is to be a global leader in the research, design and implementation of advanced surface engineering technologies and innovations. They tangibly reduce unit operating costs by extending the wear life of production-vital equipment. These technologies and applications result in increased production yield, reduced downtime and maintenance costs. It’s all about improving productivity.
The Myth of Greater Capacity
Over the years the business expanded to match the growth in demand for its products. The notion that more capacity will of itself lead to greater efficiency is a myth.
As part of a strategy to optimise the capacity and capability of their facilities and staff to deliver innovative services and products and to diversify and grow their business, LaserBond decided in June 2014 to embark on a Lean transformation. The move to a larger facility had not brought instant solutions to old problems. LaserBond found that margins did not keep pace with the increases in sales revenue and the company decided to implement productivity measures at its Smeaton Grange facility. The issues that required immediate attention were determined to be:
reduction of lead times, improving the layout and organisation of the physical work environment,
reduction of ‘work in progress’ and
improvement in overall organisational culture.
LaserBond sought external support to address these issues. Brian, one of Performance Drivers’ Principal Consultants was employed to facilitate the transformation program. With decades of experience across multiple industries, this Brian was armed with tried and tested tools and methodologies, and a multitude of success stories.
Performance Drivers generally employs one of three options when tackling a Lean initiative, each with a slightly different focus. LaserBond opted for a pilot program and a plan to upskill the workforce. The approach involves expert facilitation of a proof of concept, followed by ongoing mentoring.
Building internal capability is critical to establish a solid foundation for change with a sharpened focus and cultural shift geared towards ongoing continuous improvement.
Apart from subject matter expertise, Brian brought, by virtue of a very long and successful career, a plethora of compelling true stories. He started off inviting storytelling to get to the root of daily frustrations and then encouraged the sharing of success stories as the pilot and subsequent initiatives rolled out.
The purpose of a pilot project is to allow for ‘quick wins’ and the opportunity to demonstrate real success. With a proof of concept story of their own to tell, the pilot team was able to spread the word. They shared the Guru’s stories, validating them with their own experiences. There is something very empowering about visible and recent proof of your own successes – it makes story time that much more enjoyable.
Whilst the CEO was present at the awareness briefings to show support and encouragement, LaserBond chose to actively avoid presenting a top down approach. The critical success factor for the organisation has been the direct involvement of all the folk on the shop floor team. This has ensured that workers themselves understand, believe in and own the transformation. They hold the copyright to their own stories, as it were.
Selecting a few pilot areas enabled staff to get their feet wet. They effected dramatic improvement in a small area in a very short time (literally days) and customised the Lean tools into a ‘LaserBond Way and Culture’. After the pilots were successfully deployed, the scope was expanded to the rest of the production, scheduling and warehouse areas.
A common challenge with projects of this nature is allocating time for all staff to undertake improvements, whilst still keeping up with business as usual. LaserBond’s Financial Controller arranged for account codes to be created for staff to allocate both time and purchase expenses to the Lean project.
The project resulted in a 7% improvement in the business's financials
The time gained by implementing Workplace Organisation was measured against the time spent on making the improvements, and articulating the net gains. After three months, during which various carefully selected Lean techniques (Workplace Organisation, Kaizen (improvement suggestions from reducing wastes) and Visual Workplace) were deployed, considerable improvements and benefits were realised in terms of:
lead time reduction
estimated vs actual operation times
greater employee and visitor safety
percentage time spent actually working on jobs.
Financial results have shown a sustainable 7% improvement that can be directly related to the efficiency improvements achieved as a result of the Lean manufacturing techniques and other shop floor efficiency improvements.
We expected pushback from a team of people set in their ways, but they embraced the change with a response of, “Why didn’t we do this years ago?”
The second phase of the LaserBond project started looking at machine performance (TPM / Total Productive Maintenance) and scheduling. Log books were kept at each work centre, and ongoing improvements effected to machinery to restore to initial conditions, improve reliability and performance, and perform preventative maintenance.
Examination of the log book for one of the machines showed that the number of issues, stoppages and breakdowns reduced from an average of 20 per month, to one every two months.
During this period staff were trained in Lean tools such as Quick Changeover, Structured Problem Solving and Mistake Proofing. The next phase is a project in progress to reduce rework. The Lean thinking program is also being expanded into Sales, Finance, and Administration.
Continuous improvement is, by definition, never complete. The LaserBond team has had the foresight to ensure that their team sustains a culture of pride and confidence building.
The major culture change and imperative of the transformation was the empowerment of operators to own their processes, and come up with ongoing continuous improvement suggestions
Actively avoiding a top down approach can be very empowering for workers at the coalface, in that it makes the successes entirely their own.
Choosing pilot areas wisely can provide authentic success stories within days.
An account code/ cost centre for project time and resources to be billed against provides data for articulating net gains in real financial terms.