Value warriors

Gut instinct has its place, but when you are building the biggest boat you’ve ever built on site, it’s nice to have more than a good feeling backing up your investment.

As it happens, Larson/Glastron, Inc., Little Falls, Minn., did have more — much more. Before taking the new Larson Cabrio 350 sports cruiser into inventory production last fall, the company put the boat through its new Quality Planning Deployment methodology, one of the many Lean Sigma tools it is now using to build in quality and customer satisfaction.

The QPD analysis identified the major systems among the 21 in the cruiser that had the potential to be problematic either on the line or on the water. Thirty action teams, comprised of three-to-six people with hands-on experience, then reviewed the subsystems looking for ways to improve quality and reduce waste.

The results led to improvements big and small.

One team suggested that, rather than using fixtures and jigs to locate the cruiser’s stringer system, for example, why not use a noncontact laser system. The resulting new system, unique to the marine industry, allows faster and more accurate positioning of the stringer system, preventing time wasted on modifications otherwise needed down the line.

Another team’s analysis resulted in replacement of a router bit. The new bit cuts smoother and more accurately, and lasts three-to-four-times longer.

“That simple change was worth about $12,000 to $14,000 a year just in bit life,” said Kyle Chown, vice president of operations, Larson/Glastron, adding that “the beauty of it is that this and the other improvements made are transferable across all models.”

Improving new product development is just one of the goals of Larson/Glastron’s Lean Sigma initiative. Launched three years ago, the program crosses all functions to drive continuous improvement throughout the company.

Lean Sigma combines the rigorous analytical tools of Six Sigma with the waste elimination techniques of Lean manufacturing. Although the two methodologies are still being implemented separately in some organizations, more and more they are being integrated to leverage their synergistic strengths. This integration is commonly referred to as Lean Six Sigma (LSS).

“The benefit of Lean Six Sigma is that it gives you a complete toolkit. Sometimes you use the speed tools of Lean and sometimes the quality tools of Six Sigma,” said Bill Kastle, senior vice president of the George Group, a Dallas-based strategy and execution management consulting firm, and co-author of “What Is Lean Six Sigma” (McGraw-Hill, 2003). The George Group has worked with several marine manufacturers.

In general, Six Sigma tools are used for process-driven projects, and can take up to six months to complete. Data is gathered, measured and analyzed to allow fact-based improvements. Usually several problems are identified and resolved through the process.

Lean tools, on the other hand, are better suited for system-driven projects. Typically used in a Kaizen event, an intense workshop lasting a few days up to two weeks, the Lean methodology offers speedy implementation of improvements.
Some features and tools cross over. In many organizations, for instance, Black Belts and Green Belts, the army of Six Sigma deployment, lead both Six Sigma and Lean projects.

The George Group recommends that Lean tools be embedded in Six Sigma’s DMAIC framework — define, measure, analyze, improve, control — and that the DMAIC format be followed no matter what the project. That way, there is a common approach. In a Lean event, the team just goes through the phases more quickly.

Just so, the firm advises, the Lean Value Stream Map should be used for every project given that eliminating steps that don’t directly benefit the customer is always appropriate no matter what the project.

Leaning toward Lean
Development of the QPD process is Larson/Glastron’s largest Lean Sigma project to date. The company has also executed Six Sigma projects in the areas of inventory management and delivery.

Although the company’s initial focus was on process improvement, it now has more of a Lean orientation.

“We’re using the fast-hitting Kaizen events and Lean tools on floor flow and production issues now,” said Kevin Kapsner, quality manager, VEC. As the company’s lone Black Belt, Kapsner oversees all of the Lean Sigma projects.

One such event focused on build time on a single line that handled both high- and low-content boats. Given that the line was only as fast as the slowest moving boat, it was taking 32 1?2 hours to build any boat. Separation was the obvious answer. The Kaizen event facilitated how to go about it.

“We ended up moving six low-content but high-volume boats to another facility and better organizing the line which reduced the number of people required,” said Lyle Lalim, director of Lean operations, Larson/Glastron. “As a result, we reduced build time per boat by as much as 11.67 hours in low-content boats and just short of 2 hours in high-content boats.”

Another event, using the Kanban just-in-time inventory tool, reduced inventory on the floor from as much as five days to as little as five hours.

A move from emphasis on process to system projects is also occurring at MasterCraft, where LSS was launched a few years ago.

“Until recently, we have used the Six Sigma tools almost exclusively working on transactional processes, administrative processes, some operational areas and new product development,” said Terry Bell, COO, MasterCraft, Vonore, Tenn. “Now we are transitioning more of our focus on Lean manufacturing to ensure that we are driving the positive change throughout every area of the organization.”

The early effort on the upstream Six Sigma process projects is already paying off. For example, in the past the learning curve and time spent working out the bugs of a new model introduction always disrupted production.

“We would lower our production rate by as much as 20 percent to accommodate bringing in a new product,” Bell said, “but with the last four new boat introductions, we didn’t have to lower production at all.”

MasterCraft also used the Six Sigma tools to improve its warranty process. It was taking up to 57 days to close out a warranty claim and credit the dealer. It now happens within two working days on most claims.

Lean events successes are also piling up. For instance, during an event focusing on subassembly and small parts, participants determined that a ski pylon bracket traveled over 1,000 feet to a subassembler, who then spent a minute attaching a u-bolt. Then it traveled almost another 250 feet to an operator who put it on the boat.

“If you recorded all of the time that this part was being handled, probably only 10 to 15 percent of that was value-added time,” said Rusty Woody, Black Belt and Lean manufacturing champion, MasterCraft.

The solution? Position the bracket on the line at the point of installation and have the operator attach the U-bolt before installing the component on the boat.

“It cuts 12 to 15 minutes of handling time,” Woody said. “In addition, this is a heavy component so we dealt with a safety issue as well because it had been carried back and forth to a cart and then rolled up and down the line.”

Leadership from the top
MasterCraft’s three Black Belts, provide initial training on an LSS project for those who haven’t yet been exposed to any of the tools. The company also has 10 Green Belts, one from each department, who were certified through the University of Tennessee. Additional Black Belts and Green Belts will be certified as needed.

“The rule of thumb is one Black Belt per 1 percent of the employee population, so we will add another one sometime in 2006,” said Bell. “And when we can justify 10 more Green Belts, we will set up another training class for them.”

Training requires a substantial investment.

Black Belts receive at least four weeks of instruction over several months before they are certified, Green Belts at least a week. This expense can limit rollout of an initiative. It also is why any LSS initiative must be backed by a committed CEO. And in fact, LSS is often initiated by the CEO although in some organizations, such as Brunswick, it grows from the ground up.

Starting in a number of Brunswick divisions, LSS produced such remarkable results that it gained corporate-wide momentum.

“Lean Six Sigma is now a corporate initiative that is being supported and implemented by all divisions, across all segments not only at the Brunswick Boat Group,” said Dandy Martin, director, Lean Six Sigma deployment, Brunswick. “It has been rolled out progressively, and each division is implementing it according to its business needs,”

Linking LSS to business strategy is vital, according to Kastle, as is good project selection.

“When there is a formal identification and selection process, the executives have an opportunity to see how the projects are tied to meeting customer needs and other business strategies,” he said.

That connection and the visibility of the Black Belts and their teams leads to long-term success. As the senior leaders come to depend on the resource base of Black and Green Belts, LSS becomes sustainable and self-perpetuating.
At Sea Ray, Doug Alexander, manager of LSS and value analysis, meets with Cynthia Trudell, company president, once a month to go over all of the active LSS projects. Given that there were more than 100 of them in 2005, this is a big commitment.

“She is very much attuned to what we are doing and one of the best supporters we have,” said Alexander.

Sea Ray was one of the first companies in the Brunswick Boat Group (BBG) to deploy LSS. In the last two years, the company has trained 114 Green Belts and 12 Black Belts. Only two of the Black Belts work with LSS full time. The other 10 are “integrated Black Belts,” meaning that they remain in their job positions and serve as a mentor and resource for project teams and Green Belts in training. Ultimately there will be a Black Belt at each Sea Ray facility.

Training is instructed by a BBG corporate trainer who travels to each boat company. Given the demand, the companies need to schedule training well in advance. Sea Ray currently has a waiting list for the training, but that wasn’t always the case.

“We didn’t really understand who should be sent to training so we had a lot of fall out,” Alexander said. “About 8 percent didn’t work projects because we didn’t understand what their work role was and give them the ability to succeed by giving them the best projects. The best projects are whatever is important to that individual, something in his work area.”

Better selection of participants and the mounting successes have sparked a demand now from people anxious to attend training so that they too can be part of the improvements.

One of those successes was improving robot efficiency in cutting fiberglass for hulls and decks at the Knoxville cruiser facility. Hole cutting, in particular, was an issue. When the project was launched, it was running at about 88 percent efficiency. The Green Belt-led team thought it could bring that up to 98.

“As the hands-on personnel on the floor, they knew first-hand that the occasional inefficiencies of the robots increased hole-cut variation because the cuts then had to be handmade,” Alexander said.

Thanks to the team’s efforts, the robots now run in the high 90-percent efficiency range. Defective cuts have been virtually eliminated, making the need for off-line manual cuts rare. A more effective preventive maintenance program and a tracking process also help ensure consistency.

Cultural change
Alexander is excited about how LSS is reshaping the way people think about their work. “The other day I was attending a Quality meeting and someone asked if anyone had done a Pareto chart or FMEA [failure mode effect analysis] on the subject in discussion. Everyone present knew what these tools were,” he said.

That is also happening at Mercury Marine, Fond du Lac, Wis. When Brad Beaird, director of process improvement, Mercury Marine, saw an opportunity for improvement of the billing process, some employees were doubtful that changes could be made.

“We proactively managed that by working with the group up-front to make sure that everyone knew that they would be part of the decision-making process, which was their main fear,” said Beaird. “That communication was ongoing from the project kickoff with our Champion all the way to the end — and even after the project was completed as we continued to track our measurements and maintain the gains.”

Although the billing process was already performing well, routine audits would occasionally identify errors that required that a credit be issued to customers, the invoice voided in the system and the correct amount rebilled. The goal was to reduce the rework by 75 percent, measured by the number of credits and rebills.

The results were even better, a 90-percent reduction in rework thanks in large part to a streamlining of the process. One of the main reasons for rework was a change in a payment terms code. At first the team thought that additional training was in order, but on further analysis members realized that there were simply too many codes.

“Many were not used regularly and only added complexity to the process,” said Beaird. “We reduced the number of term codes, and the process automatically became simpler and more error-proof.”

As Beaird points out, communication with employees is a must. Should employees view LSS as just one more cost-cutting initiative or a way to cut the workforce, their skepticism and fear could hinder success of the initiative.
MasterCraft’s Bell agrees. “We make that clear at the start of every project,” he said. “This is not a head hunt. We are trying to improve the process.”

Employees are reassured that while fewer people may be needed in certain areas as efficiency increases and waste decreases, other positions will be found for them.

“There will always be a job at MasterCraft for those who perform well and are committed,” Bell said.

At ITT Jabsco Worldwide, in at least one instance, employees themselves recommended their jobs be eliminated and that they be reassigned to another production cell.

Using several Value-based Six Sigma (VBSS) tools — VBSS is ITT’s version of LSS — the production cell working on the company’s marine toilet reduced the cell by about 50 percent and increased productivity by 20 percent.

“They did the analysis and came back saying that ‘we have too many people in the cell, we’re falling all over each other,’” said Scott Shimer, executive program director Worldwide/VBSS, ITT, and Master Black Belt, ITT Jabsco Worldwide, Foothill Ranch, Calif. They developed their own process for improvement with the end result of moving from 75 percent to 85 percent on time delivery of this product line to 95 percent with fewer people.”

One of five growth pillars defined by the corporation, VBSS was deployed in 1999. Since then it has helped, ITT’s stock price go from around $50 to the $116 range. There are between 200 and 300 Black Belts in the organization, and Green Belt training is more intensive than in some organizations.

“It is basically ‘Black Belt light,’” said Shimer. “There are about 22 segments and tests associated with it so it is a very comprehensive process.”

Projects are identified via an Opportunity Identification Process which is done at least once a year. Shimer’s group interviews all senior management to identify the opportunities for improvement they see in their departments.

After prioritizing them based on value and achievability, they take their recommendations back to senior management for approval. Active projects are reviewed monthly with a subteam of executives from the functional areas affected by the project.

Up-front cross-functional involvement is another key to successful deployment of LSS.

“The biggest delay for Lean Six Sigma projects is not having the right people on the project up-front,” said Kastle. “If you pick a project in isolation, without the discussion with the functional leaders, and then have go to them three or four weeks later, it will probably be a low priority for them.”

Playing it forward
As in other organizations, ITT Jabsco encountered some skepticism when VBSS was first rolled out. But that dissolved as people began to recognize what it could do, and not just for the organization. Completion of every project is celebrated, which only makes VBSS more of a draw.

“As we shared the information more people started asking how they could get training, so we’ve actually expanded our Black Belt training process,” said Shimer. “You can go through the process and be certified to work in different areas of the company or you can become what we call a ‘functional Black Belt’ and use the skills in your current area.”

Kastle points out that the intangible benefit of LSS is leadership development given that it includes top executives turning strategy-related challenges over to Black Belts with teams to find solutions that directly affect growth.

Here, again, the integration of Six Sigma and Lean concepts strengthens the outcome.

“Six Sigma is really good for understanding what is critical to the customer and then making sure you can deliver on it, and that makes you more competitive,” Kastle concluded. “And the Lean piece, pulling out nonvalue-adds or waste, will help reduce cycle time and cost, resulting in more of a productivity improvement. So Lean Six Sigma is really about growing both the top and bottom lines as well as developing the next wave of leaders.”

Spreading The Knowledge

When Larson/Glastron President Jeff Olson asked Kyle Chown and Lyle Lalim how the company could speed up its deployment of Lean Sigma, the two came up with three alternatives: bring in external resources to take on some of the projects, hire more staff to champion the deployment, or find ways to stretch the resources they had.

The first two options are still under consideration. In the meantime, the company has partnered with Central Lakes College, in Brainerd, Minn., to develop a program that offers increased Lean Sigma training opportunities for employees and college instructors alike.

Funded by a grant from the Minnesota Job Skills Partnership Program, the partnership enables Lalim to train selected college and adjunct instructors how to facilitate a Kaizen event using the Lean Sigma curriculum developed by Larson/Glastron. The “teach the teachers” process is done over four employee-training events.

In the first, Lalim conducts the class and the instructor is a participant working through the exercises along with participating employees. In the second training event, the instructor teaches half of the material and Lalim the other half, then, in the third, they switch. For the fourth event, the instructor teaches all of the material while Lalim serves as a mentor.

“Eighty-five percent of the employers in the region served by the college have an employee population of 15 or less,” said Lalim, “so they don’t have the staff for an in-house quality program. This allows them to turn to the college for help in improving their systems and processes.”

“At the same time, over the three-year grant period,” added Chown, “we will be able to put all of our employees through a Kaizen event, more than tripling our output on doing events.”

Retailers Benefit Too

Lean Six Sigma is not just for manufacturers.

Just ask Rob Brown, owner of Clark Marine, Manchester, Maine. After reading “What is Lean Six Sigma,” by Mike George, Dave Rowlands and Bill Kastle, Brown began implementing some of the tools to identify and eliminate waste. One of his targets, for instance, is a three-day turnaround for getting boats out of storage and back on the water.

Brown also consulted a few other books, he recommends reading: “Six Sigma for Managers,” by Greg Brue and “What is Six Sigma,” by Pete Pande and Larry Hillp

He does caution that dealers need to make the process their own however. “You can make it so wide and so heavy that nobody will buy into it,” he said.

One way Brown has adapted LSS to his business is through avoiding some of the terminology. “We can’t bring ourselves to call ourselves Black Belts or Champions. We’re just not that type of people,” he said, “but in effect, we’ve created 11 Black Belts.”

This is not unusual. According to author Bill Kastle, many service organizations use their own terminology. “Most manufacturers like to use the terms ‘Black Belts’ and ‘Green Belts’ because these are somewhat branded and their customers and suppliers identify with them,” he explained, “but in service and transactional companies even the terms ‘Six Sigma’ and ‘Lean Six Sigma’ are a bit overwhelming. So these organizations use terms such as ‘operational excellence.’”

Whatever you call it, it seems to work. “It really puts accountability on the frontline,” said Brown.

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