Value Stream Mapping and Lean Manufacturing of a Production unit

Delivery

Order supply

Packing and picking finished goods

Cracking

Finishing

Cutting and creasing

Printing

Goods in

Finished goods order taking stage

Dispatch

Final dispatch

Finished goods management aspect

Figure 1: Value Stream Map

The value stream map shows different activities that are directly producing value to the operational procedure. The aim is to reduce the time consumed by each activity, making production processes more sustainable to reduce waste and optimize operational unit efficiency by following recommended actions.

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Lean principles and activities

The following table shows the value-added processes and the attempts to adopt ‘lean’ principles in the operation department:

Activity at working units Lean principle and value addition Lean principle and waste minimization
Finished goods (order taking procedure) Demand-based flow (pull manufacturing): Fast order-taking system, order specifications, customer contact details, address of delivery, etc. are taken and an order ID is assigned to confirm the order and give it a unique name for easier identification throughout the process. Reduce waste: To minimize paper waste, only one paper is printed which contains all details in different tabs to minimize the cost of operational material (paper and printer ink).
Goods in Optimize whole: Plastic sheets are kept in a separate static unit to bring them to a reasonable temperature from their existing freezing condition. Ink cartridges are stored in bulk. Four colors are bought including red, yellow, black, and blue. For any different color, the water is mixed with ink and two colors are mixed in assembly dying process to make the new color. Adds value to the operational process: The production unit sends hundreds of plastic sheets for temperature control at once to reduce the time it takes to supply the raw material to production unit. The logistic delay is avoided by sending specific commands to the temperature control machine which produces raw material in bulk. The colors are mixed in large mixing units by using ink thinner and water to form new colors which are sufficient to be used by hundreds of sheets.
Printing stage Optimize the whole: Assembly dyes are managed in bulk when dye coding begins. The printing presses (two big and one small press), are used according to the type of need. 1200 sheets are printed per minute. Reduce waste: The waste of printing process is kept separate. The material is sent for recycling as a part of the waste management policy of the unit.
Cutting and creasing Build quality in: The command is given by the worker to cut certain number of sheets. On average, 50 sheets are cut per minute. Customized blades are used. Reduce time: A large cutting machine is used to cut the sheets. The label is kept intact which is further cut out according to the order placed by customers.
Cracking and marshalling Demand in: The order is reviewed to prepare boxes of labels and marshal the order boxes for delivery. Reduce waste: Misprinted and defected sheets (if any), are taken out manually by the staff worker. The marshalling stage keeps small and large boxes separate to make supply easy for the unit.
Picking, packing, dispatching Packing is done and orders are placed in separate shelves which are labelled according to the name of months. The picking stage is managed by automated procedure. The software screen shows the order delivery status, who picked, who delivered, time and customer’s sign, etc. The dispatch stage uses the software particularly designed for sales representative to use for accurate order delivery. Just-in-time (JIT) inventory management is implemented at every stage of product picking, packaging and dispatching. The software development for JIT implementation contains basic features like specification of time, date, duration, etc. to ensure that the customer has received the order according to the particulars given to production unit.

Recommendations to make the business leaner

Although Royedale’s Hortipak business manufacturing unit has an efficient system of production till the supply of order to the customer, a set of recommendations is given to make the business leaner according to Six Sigma approach of CPI (continuous process improvement).

It is recommended to Royedale’s production unit to deploy the new system of EDI (Electronic Data Interchange) (Pech & Vaněček, 2018). Application of EDI will help in catering to regular customers for a better order picking system. The EDI system is capable of receiving direct input from the customer through digital software (Dennis & Detlef, 2015). The customer enters the design and required quantity and the system stores it in the customer’s registered account. Consequently, the said account of the customer will already have basic information stored such as the delivery address, the authorized person to deliver, customer’s bank account number, etc.

The second recommendation is based on the concept of smart value creation by using the talent of employees (Oliveira et al., 2017). Currently, the employees of the cracking unit cut the label product bundles by hand and place them in boxes. The video of Royedale’s packaging unit shows a single employee who works through the process slowly. Therefore, the staff should be trained to speed up the process to fill boxes of cut products in less time, i.e. the current time frame is approximately five boxes per minute which should be optimized to ten boxes per minute. The recommended training type is ‘simulation and demo’, where the trainer shows how to speed up the working performance. The training should be steered after conducting the TNA (Training Need Assessment) process. In this way, the efficiency of staff will directly impact the performance of operations and result in ‘leaner’ management of business operations, i.e. less time and more performance (Keitany & Riwo-Abudho, 2014).

Thirdly, the organization should adopt a waste management principle (Wijnhoven et al., 2016) for minimizing waste from printing stage by improving the machine efficiency by hiring technical experts. Nevertheless, the recommendation has a transformation risk of employees who are not ready to handle fast-operating machines (Pons, 2013). Hence, to reduce the employees’ resistance to change, the production unit manager will adopt the change model by Kurt Lewin, i.e. unfreeze, change and refreeze (Cummings & Worley, 2014). The model will develop awareness about reducing waste among employees in the unfreeze stage, increase machine efficiency to reduce waste in the change stage and handle employee’s concern in the refreezing stage. Therefore, the recommendation is planned to create awareness about the machine up-gradation, which will produce less waste. Although Royedale’s unit recycles the printing waste, the raw material waste can be reduced by using the technical advice of machine experts. The practical implementation of this recommendation is to adopt continuous process improvement.

Figure 2: CPI (Continuous Process Improvement) by the recommended action

The fourth recommendation is linked to machine efficiency improvement in a different aspect. It is learnt from part 1 of the assignment that OEE (Overall Equipment Effectiveness) is not factored into the target sheets per hour rate. Also, calculations in part 1 reveal that production is only being done for 55 per cent of the total hours of work. The rest of the time is being consumed by setting up the machine, loading/unloading the sheets to the machines, changing offset plates, and maintenance. Therefore, it is vital to avoid ‘six big losses’ estimated in a scenario where machine efficiency seems to be a problem for increasing production unit efficiency (Chikwendu & Chima, 2018).

Image result for oee and improving lean manufacturing

Figure 3: Six big losses caused if OEE is not implemented (OEE, 2019)

The availability loss can be reduced by increasing the machine response to the setting stage and the loading/unloading process (Gram, 2013). Currently, these activities are consuming 45 per cent of machine performance delivery capacity, and therefore, the machine has become less available for the production task. The recommended action is to reduce the time by 30 per cent by installing new features and implying lubrication in the machine to minimise the time consumed for all these activities. For example, for planned stops, the setup and adjustment duration should be reduced to minimal by oiling the machine handlers using lubricants and upgrading the automated command system of the machine (Patel & Deshpande, 2016). For unplanned stops, the machine should be monitored every two days to control the possibility of friction in hinges of machine handlers. Correspondingly, this is because any technical issue like halting or pausing the command can slow down the setup process.

The performance loss should be avoided by speeding up the pressing time, dyeing process and cutting. Currently, 1200 sheets per hour are being printed (as per part 1 observations). Therefore, the performance loss can be avoided by increasing the number of sheets to 1800 per hour, which can be done by minimizing the number of small stops in the machine. The machine would continue running without any pause, and the time per cycle would be increased. Quality loss, i.e. production and start-up rejects, would be reduced to minimize waste (as recommended above) and optimize the total production maintenance capacity (Chandra et al., 2018). The start-up rejects waste ink colour and increases the time incurred in dying. However, the recommendation of OEE would alleviate such issues and machines will work more efficiently yielding chances of production optimization and lean operations (Fam et al., 2018).

The above mentioned recommendations can make a difference in machine efficiency which will influence the productivity rate of the Hortipak unit. The following value stream map shows an example of the improved production process:

Figure 4: CPI approach by following OEE recommendation

Production activity Current time Estimated time after OEE
Finished goods: Order taking stage 10 min 4 min
Dispatching of raw material: Plastic sheets after temperature maintenance 1200 sheets/hour 1800 sheets/hour

(reducing start up rejects and pauses)

Goods in 2 min 0.5 seconds

(without pausing or halting, the cycle will continue)

Printing 50 sheets/min 80 sheets/min (printing time is increased by reducing the wastage produced in the dye assembling stage of mixing water and ink)

Table 1: Current vs. expected production activity after OEE implementation

Moreover, the CPI approach will provide a long term benefit to Royedale’s operational unit’s performance (Jagdeep & Singh, 2015). The changes brought by improving machine response for waste reduction, EDI and OEE for reducing time for setting and adjustment phase are long term changes. The customer order-taking procedure and the further process will consume less time which will be strategically beneficial to decrease order delivery time to customers. However, staff training is a short term approach because if the employment contract ends or the employee decides to leave, the training benefit would be ceased (Raja Abdul Ghafoor Khan, 2011). Therefore, Royedale will re-implement the training or embed this recommendation into employee orientation plan to ensure the same performance delivery by a new employee in the given time frame.

The recommendations are developed to improve the efficiency of machines, reduce the time consumed in each activity, train staff, and adapt the EDI system and minimize waste. The lean manufacturing system recommendations are based on the Six Sigma approach, where continuous process improvement is the norm of all operations (Suef, 2018). By adopting the lean Six Sigma strategy, the optimal efficiency of machines will be achieved through the reduction of time spent on each operational activity (Domingo & Aguado, 2015). Although part 1 observes that Royedale already has sufficient systems to accomplish client orders timely, the need is to optimize the overall operational efficiency, which can strengthen the competitive position of the company. For small orders, the benefit would be to cater to small nurseries and garden city competitors identified in part 2 of the assignment. The quick response will attract small companies to place their order to Royedale, knowing that they can begin on their services sooner if raw material like printed plant labels is delivered in less time (Salah et al., 2019). Therefore, the set of recommendations are expected to generate the outputs in the form of CPI and give long term benefit to Royedale’s production unit via continuous performance improvement as discussed below.

Lean manufacturing

Lean manufacturing practices are expected to benefit Royedale’s production unit’s performance. The recommended action of using EDI for order taking procedure aims to create a long term solution for increasing customer response. Research proves that customer response time affects the customer satisfaction and intention to buy (Mehmood & Najmi, 2017). Therefore, Royedale is suggested to adopt a strategy that works directly on customers’ experiences and improves their intention to buy. The large commercial scale customers and retailers like ASDA are big clients of Royedale. These companies operate commercially and therefore, require orders in bulk. Although mass production provides the advantage of low cost per bundle, however, it is also subjected to the customer responsiveness that how Royedale retain these big clients by giving efficient, reliable and prompt response (Alptekinoglu & Corbett, 2008). Therefore, EDI is recommended to automatically reduce the time to record customers’ mailing address, contact details, payment mode verification, and the authorized person to deliver to etc., which saves time of order-taking process. EDI also works on the updated information from the customers’ end, which allows a company to know about any change in customers’ data (Goksoy & Vayvay, 2012).

Image result for edi notification

Figure 5: An example of EDI notification on main server (Huihoo, 2019)

The above image shows an example of an EDI notification profile every time a customer updates his information. The customer response efficiency is increased by adopting these time-effective solutions which strengthen the competitive edge. Large commercial clients tend to stay in contact with companies that are efficient in response and are time considerate to complete formalities of order taking procedure (Tharanikaran et al., 2017).

Research indicates that employees’ improved skills, knowledge and abilities directly impact the performance of a company which further improves the competitive edge (Mathur, 2015). Therefore, the second recommendation is to add value to business operations by training the staff of the cracking unit to speed up the manual process of putting the bundles in the boxes. Research shows that the improvement in staff productivity impacts the competitive edge and strengthens it on a long term basis (Saha & Gregar, 2012). Therefore, the recommendation is expected to influence large clients who place orders of big boxes. The time per unit packaging would be less, which will speed up the order delivery process.

The third recommendation is to adopt the lean principle of waste management that is expected to increase the product delivery output and strengthen the competitive position of the company (Simboli & Morgante, 2014). Research indicates that green practices, such as reduced wastage affect a company’s overall image for the customer and enhance their brand loyalty (Erdila, 2013). The customer is satisfied with the company that produces less waste due to the growing number of environmental hazard awareness among the consumer market (Milovanov, 2017), thereby improving its competitive position in the market.

The fourth and fifth recommendations are based on the long term perspective of improving the overall efficiency of the production unit by reducing the time spent on each activity to make processes leaner and efficient. The machine efficiency to produce less waste, speed up one cycle of production, make machine handlers more efficient using lubricants are some recommended actions to adopt the CPI. The strategic improvement brought by these steps is expected to increase the competitive edge as these steps make business operations leaner. It is because these processes improve equipment performance and enhance the productivity rate of a manufacturing plant (Maletič et al., 2014). Also, the competitors are affected when any company produces both big and small orders in less time than them (Hosseini, et al., 2018). Hence, the number of clients for Royedale will increase as the company will be able to fulfil orders of more clients with the same machine.

Moreover, time is the key factor to improve customer satisfaction and reinforce their brand identity (Ghodeswar, 2008). Royedale uses a sustainable approach to reduce wastage which will improve the quality of the manufacturing process and develop more products in less time. The efficiency in all manufacturing operations will result in a leaner and efficient performance which will strengthen the competitive performance of the company (Lewis, 2000). Research shows that companies that are quick to respond to their internal issues are more likely to achieve a competitive edge in the future (AL-HAWARY & AL-HAMWAN, 2017). Therefore, Royedale is recommended to identify the significant lapse of 45 per cent reduction of machine efficiency utilization and work on reducing it to deliver maximum output. These steps will ensure that Royedale’s competitive performance is increased by alienating the time spent in activities other than production, e.g., adjustment phase of machines.

Comprehensively, it is proven by research that lean manufacturing via Six Sigma approach improves the competitive strength of the company (Mast, 2006). Organizations tend to achieve more clients by increasing their production capacity through leaner approaches (Qureshi & Bashir, 2012). Hence, the continuous process improvement has been a proven way to increase manufacturing capacity by adopting value addition in each stage of production (Patidar et al., 2016). The leaner practice improves supply chain process and ensures that finished goods reach the stage of marshalling, picking, packing and dispatching sooner (Barac et al., 2010). The orders are dispatched, and the production unit begins to work on new orders due to lesser time consumed in all production activities. Royedale’s Hortipak production unit must adopt leaner approaches which are integrated as a long-term solution to improve its competitive position in the market. The organization should indulge in CPI and Six Sigma to strengthen leaner operations for improved performance.

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