Closing the cap: lean management


Implementing lean manufacturing in the caps and closures industry is a long journey. Phalanx Consulting's Peter Lawlor explains the steps to success.

In recent years, lean management has become one of most prevalent business improvement strategies across all corners of the globe. In Australia, significant advancements in productivity performance have been achieved by those organisations that have fully embraced the waste elimination objectives of a typical 'lean' journey. 

So, what are the key factors necessary for organisations in the caps and closures industry to successfully drive a lean management initiative? And how can it ensure success and accelerate progress?

The key is to ensure that before program start-up, the organisation's leaders buy-in to the fact that their lean management program must be viewed from a whole-of-business perspective. As such, when designing its lean implementation strategy, the company must address each of the drivers discussed below. 

These key drivers have equal importance in developing and driving productivity growth for businesses in the caps and closures industry. 

Organisational development
A key driver of a company's performance in lean management is the capacity of its leaders to successfully lead and manage the implementation process. An assessment of this capability is required prior to program start-up to ensure the company is "ready for lean". Weaknesses in organisation structure, position profiles, and systems of accountability must first be addressed to ensure that success in lean is both continuous and sustainable for the company.

Lean strategy
Ensuring the company is "ready for lean" provides the road map for the company's lean implementation approach. Diagnostic assessments should be conducted by the Lean Practitioner to gain an understanding of the company's improvement and best practice potential.

This knowledge base is then used to engage the leadership team in the design of an effective lean implementation strategy, which is tailored to fit the company's needs. The strategy should incorporate lean tools selected specifically for the company's needs and designed to address priority areas of waste within the business. 

The success of the lean strategy is highly dependent on all employees being engaged with it. To achieve this, employees must possess the necessary skills and behaviours required to participate in a wide variety of improvement initiatives designed to their role.

Without these skills and behaviours, employees are likely to lack the confidence and enthusiasm required to effectively participate in the company's lean efforts. Training courses which provide employees with process improvement and competitive manufacturing skills and knowledge are vital to achieving rapid rates of productivity growth within the business.

Measurements and benefits
A key question often asked of us by management teams in all industries is "what returns will my investment in lean yield and when will the returns be realised?"

This question is particularly relevant for companies in the caps and closures industry where margins are tight and rapid returns on investment are imperative.

In our experience in the caps and closures industry, we start by assisting organisations to understand what lean is about and help them find out how lean can drive long term business growth and profitability. We show the company how lean has benefited other organisations like theirs and how their own business can similarly benefit. Our diagnostic assessments (described above) scope the benefits of the lean opportunity within their business. We then ascertain the investment required (which may be off-set by applicable and appropriate government funding regimes, which we help them obtain). This enables us to then determine what returns may be achieved as a result of their investment.

In answering the measurement question, organisations should assess this from two perspectives.
Firstly, and as discussed above, the company should assess the opportunity in terms of the need to create a culture of excellence to ensure its ability to compete in today's business environment. This less tangible benefit must be taken into account when assessing the benefits of undertaking a lean journey.

The second requirement is to measure the benefits which are to be realised through lean implementation. Goals should be established for the program which address cost reduction, quality improvement, scrap reduction, service enhancement, as well as other objectives. These goals provide a focus for continuous improvement and are often converted into dollar value savings for the business. In our experience in the caps and closures industry, metrics that monitor critical aspects of operational performance (such as overall equipment effectiveness) and rapid changeover times are also critical for driving continuous improvement.

Companies in the caps and closures industry considering the application of lean in their business must first ensure that the content of the lean program is correctly aligned with the company's strategic goals. This sets the platform for developing the culture of excellence that is critical to the program's success. Only once this solid platform is in place can quantifiable goals and cost reduction targets be set and pursued with vigour.

Phalanx Group is a multi-disciplined management consultancy that specialises in transforming organisations.