Once upon a time there was a little shop that was bursting at the seams with so much work-in-process (WIP) inventory that the warehouse seemed to become a black hole that swallowed things and didn’t give them back. I don’t know if that introduction sounds like your shop or not, but it was a real situation that was successfully resolved with lean thinking and the 5S process.

This shop had many of the characteristics of a typical non-lean shop. All of the production departments operated as separate islands of activity. The company had grown over time by building and occupying new additions without regard to how parts should flow to eliminate movement, transportation, or other forms of waste. Quality was a function of an individual at the end of the line. That added delay and confusion to the production process when finished product had to be reworked, which was a frequent activity. Standard work, engineering standards, drawings, and specifications were either non-existent or they weren’t issued to the shop floor. Product was built using tribal knowledge and individual interpretation of customer expectations.

Inventory shows difference 

Other characteristics of the company that readers might relate to are: 1. the company employed less than 25 people, 2. this is a second generation, family owned business, 3. employees are paid incentive based on the number of units completed through their process step. The company’s niche market is custom upholstery for the designer community. When the lean initiative was launched, production volume averaged 10 pieces of furniture per day.

It has been said that a picture is worth a thousand words. Well, since I am limited for space I’ll share two pictures. One shows the frame inventory area before lean and the other shows frame inventory following the initial launch. Inventory was stored between the frame build shop and the upholstery department. Both areas were operating from a weekly demand schedule and the department leaders could batch work at their discretion.

Incentives can backfire 

Although an incentive system may help expedite work through a single process it can be counter-productive if employees focus only on their own earnings without regard to how their overproduction may cause chaos and confusion for downstream operations. That was the case here.

Frame builders were allowed to produce as many frames as they could in eight hours in any order that worked best for them. When they ran out of work the supervisor would pull up the next batch of orders so the frame builders could be kept busy. The before picture shows seventy frames nestled together with no access to the frames without moving several to get to the one needed for the next customer order. To eliminate excessive inventory and achieve flow based on internal customer demand, we decided to apply 5S thinking to inventory management.

Applying lean thinking 

The first step was to Sort, or separate, the needed inventory from the unneeded inventory. That may seem like a strange place to start. How can too much unneeded inventory accumulate in a low-volume operation? When all of the frames were moved to the sorting area it was discovered that there were several frames that had been built more than once because the original frame couldn’t be found in the maze of inventory so rather than search for it another frame was built and then it went into the black hole. Other frames had been left in inventory after an order was changed or cancelled, which added to the chaos. After all of the frames were sorted it was discovered that only 20 of the 70 were actually needed for current orders.

To set the inventory in order we labeled an area between frame build and upholstery and established a maximum inventory level of five units. Actually, we didn’t require any frames in inventory because frames could be built faster than they could be upholstered, but the owner wasn’t comfortable with such a dramatic change, so we settled on five as an interim level until the process could be validated.

The Shine step was a matter of examining the frames for quality acceptance and correcting any defects so the upholstery process wouldn’t be impeded. The 5S team also cleaned the work area, painted walls, and added dust covering to the walls to protect the frames from contamination from the rough mill.

Standardizing the process 

To ensure that inventory didn’t get out of control again the team Standardized how the frame build process would receive a “trigger” to run the next frame on the demand list. The team relocated the foam fabrication department to the space that had previously been occupied by unnecessary frames and assigned the responsibility for kitting the foam and sewn covers with the frame to the foam fabricator.

As one kit was taken by an upholsterer an empty space was created for a new kit. The frame builder would withdraw one frame’s worth of parts from a small queue and the rough mill would prepare another frame for the empty location. This standardization connected all of the departments through a common objective and crated continuity and consistency in the flow of materials.

Sustaining progress 

To ensure Sustainment of the process required participation by the operations manager in the form of tighter control over order releases to production and follow-up on frame completion. The frame builder would be required to build frames in a predetermined sequence and only when there was internal demand from upholstery triggered through the kitting process.

By establishing inventory levels that responded to internal demand manufacturing space was reduced and processes were consolidated to create flow and greater visibility across the organization. The new operation occupied half of the original space and was capable of producing 30 percent more volume with the same staff simply by eliminating clutter and the waste of searching through unnecessary stuff that was associated with it. You can achieve similar results with little capital investment by applying 5S thinking to every part of your business. Need help? I’m as close as your email.