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S h a r i n g S o l u t i o n s f o r Y o u r L e a n J o u r n e y

TIMES

Seaman Corporation is on the transformation fast track

LeanSigma®:keeping aircraft checkups safe and efficient

6DPloy: A better way to track metricsand execute strategy

10 13

Norfolk Southern: Giving Customers More Value for Their Transportation Costs

The past year has been extraordinarilydramatic politically and economically. Onboth fronts, the need for change has becometransparent to the most casual observer. Onthe business side of the ledger, the pain ofthe “Big T h re e” U.S. auto makers is a powe rf u llesson about the value of embracing thebroad tenets of “lean.” Putting aside for amoment the pressures that unions placed onthe auto makers, what crippled their capacityto compete was an unwillingness to properlytransform their companies to meet the market’s need for quality, value, innovation,and agility.

In a downturn, companies tend to chooselayoffs, shutdowns, and deep cost cutting assurvival tools. While some of these may beunavoidable, consider also taking a hard lookat your business, concentrating on what youdo best, and placing a renewed focus onyour customer connectivity, creativity, andsearch for waste. The goal must be speed andagility as well as doing more with less—and

figuring out how to inject these imperativesinto every last employee. When dealing withmarket fluctuations and economic stress,look closely at the characteristics of leancompanies that have successfully trans-formed their enterprises for competitiveadvantage in any business climate. Lessonslike increased responsiveness to changingcustomer demands can sustain market shareand customer loyalty.

• Focus on what you can control. Take waste out of your operation. Removewhat d o e s n’t add value to free up cash. Re - e x a m i n e your inventory, your lead times, your energy use, and your accounts re c e i vable pro c e s s e s—the most obvious sources of waste. Norfolk Southern Railroad has done just that byimproving its locomotive maintenance processes as well as the velocity of trainsthrough rail yards—all to help insurethat their customers get their freight on time, every time. (p. 2) A regional airline has also found that focusing on re m oving waist can shorten maintenancetimes, keeping planes flying longer. (p. 10)

• Tighten connectivity to customers. Listen to your customers. Go to them and findout what they really want through discussions and observations so that youcan develop immediate, i n n ova t i ve solutions to their unart i c u l a t e d needs. Getting close to your customers is essential to even finding out where wasteis. Focus on lead time, quality, and value innovation.

• Create synchronicity between your supply chain and the rest of your enterprise. Create partnerships up and down your value chain.

• Leverage gains for growth. Every time you eliminate non-value-added steps and reduce waste in your processes, you

PUBLISHER’SNOTE Look Forward with LeanSigma®

can increase capacity, improveproductivity, and cut capital spending. Seaman Corporation has done just that,through rigorous project selection and acceleration of their lean journey to dramatically increase productivity and grow its business. (p. 6)

• Create a current, compelling vision for thefuture. Communicate the “strained times” vision with everyone in the organization and clarify everyone’s roles.Develop a roadmap to achieve that vision that everyone can follow.Communication derails speculation andallows everyone to concentrate on w o rking together to improve the business.D Pl oy Strategy is a web-based visual management solution that will help align corporate strategy and objectives with day-to-day efforts. (p. 13)

The tools are there and have been there along time—it’s just a matter of creating thesense of uergency in 2009 to use them. Weneed to become more impatient, morefocused, and be willing to go back to funda-mentals. Revisit the things that have workedfor you in the past and drive into them evendeeper. Push lean down into the very rootsof your organizational culture. Doing so willensure that your company is resilient againstthe unexpected. LeanSigma® will work evenduring economic slowdowns if you fullyembrace its principles. It serves as an ally ingood times as well as bad. Indeed, it can bethe antidote to the pain that may lie aheadof all of us. Hard times don’t last for ever,resilient people do.

Anand Sharma, President & CEOTBM Consulting Group, Inc.asharma@tbmcg.com

A publication of TBM Consulting Group

4400 Ben Franklin BoulevardDurham, North Carolina 27704 800.438.5535 www.tbmcg.com

PublisherAnand Sharma: a s h a r m a @ t b m c g . c o m

Executive EditorWilliam A. Schwartz: bschwartz@tbmcg.com

Managing Editor Julie Poudrier: jpoudrier@tbmcg.com

Featured Columnists Mike CaldwellBill RemyJonathan Wheatley

Contributors Samantha Bason Bob McElroyOlga Bouche Angela ScennaRichard Holland Jim ScottGary Hoover Mike SerenaGary Hourselt Noel TempleBeth Ann Hunt Janet WarnerGérard Massai

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On the cover: Norfolk Southern Railway, one ofthe nation’s premier transportation companies, hasfocused LeanSigma® on its business for one mainreason: to provide efficient transportation for itscustomers so that they get more value for theirtransportation costs.

Pierre Chevrier has been named sitedirector for Siemens in Grenoble, France.Yves Doin, former managing director ofSiemens Grenoble left in October 2008 tojoin Schneider. … Greg Andersen has beennamed vice president of global sales andmarketing for Harsco Minerals in Pittsbugh,PA. … Ma rk El i n s k i is the new continuousimprovement manager for Harsco TrackTechnologies (HTT) in West Columbia, SC.Scott Jacoby, vice president and generalmanager of HTT is an enthusiastic support e rof the lean transformation approach. … BenCole at Harsco Air Exchangers in Tulsa,OK, was recently named continuousimprovement leader for the site. Ben is agraduate of the University of Nebraska engineering school and comes to AirExchangers with a vast experience of leanmanufacturing. … Glen Armstrong recentlyjoined Special Metals Corporation inHuntington, W V, as continuous improve m e n tleader. … Pactiv in Temple, TX, has expanded its continuous improvement teamunder the direction of Lorra Tindell,continuous improvement leader, to includeLa Donna Thigpen and Jeff Williams.Their positions were created to bring agreater focus on and support of continuousimprovement at the Consumer ProductsDivision in Temple. … Congratulations toall the recent Lean Certification graduates:Michelle de Leeuw, Jaco VanZyl, JoshHamman, Marius de Waal, Sonja Stadler,and Roniel Sollal, BHP Billiton, SouthAfrica; Aditi Gilman, formerly of AppletonPapers, Roaring Spring, PA; Greg Leisgang,and Brian Frost, Appleton Papers,Appleton, WI; Roseann Milliken, AppletonPapers, West Carrollton, OH; RobbieWatters, Compressor Systems, Midland,TX; Todd Kearns, Saint-Gobain in Dolton,IL; Jacob Stucky, and Dan Lindsay, Saint-Gobain Containers in Port Allegany, PA;John Cotton, formerly of DouglasDynamics; Greg Masciana, Tektronix inBeaverton, OR; Erik Lagoy, HardiggIndustries, South Deerfield, MA; FinnOleson, Danfoss, Apodaca, Mexico; RandyHanson, Hayward Pool Products, Nashville,TN; Dave Johnson, ConMed, Utica, NY;Jessica Looman, Watkins, Inc., Winona,MN; Devon Leavitt, DST Output, SouthWindsor, CT; Monika Galius-Auburn, for-merly of Advanced Bionics, ManhattanBeach, CA; Francisco Pereda, HydroAluminum, St. Augustine, FL; Jeff Moates,Carlisle Food Service Products, OklahomaCity, OK; Eric Noble, Owens Corning,Kansas City, KS; and Tina Varga, Owens

LEANCOMMUNITYNEWSMANAGINGQ 1. 0 9

TIMES

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Corning, Toledo, OH. Recent LeanCertification graduates from GEX in Indiainclude Jagdish Kumar, G. Thirumoorthy,C. Sasikumar, H. Harish, Nagesh Bhonsle,R. Manoj, S. Kamal, K. Arun Shenoy,Ananth Padmanabha, Syed Saleem, andRaghavendra Shedbal. … TBM also certi-fied a number of SixSigma black belts andgreen belts in 2008. Those receiving theirblack belt certification included AndersonTrogo, Murilo Ozanan, and SorayaMendes of Daimler-Chrysler Brazil; PhilWithey, Mike Looney, Kenton Cawley,Jens Hinrichs, Howard Kilgore, andRemco van der Linden of Doncasters;Scott Schram of Hayward Pools; JonathanZiepfel of Pella Windows; Alyson Wood ofPhifer, Inc.; and Michael Boer of Tektronix.Those receiving green belt certificationincluded Joe Kavanagh and Thomas Lewisof Canadian Forest Products; Carlos Paiva,Fábio Morelli Vieira, Leandro Gi, LucianoAzevedo, Marco Aurêlio Coutinho, MarioGrez, Suzana Pelikman, and Vinicius Silvaof Daimler Chrysler Brazil; and BillHintalla and Ebru Selcuki of Sealy. ... InTBM corporate news, Jim Scott has receiveda Golden Dome Award from the State ofIowa. Jim was a member of the IowaDepartment of Natural ResourcesConservation and Recreation Division’s“Streamliners” team, which received the“Team of the Year” award for reducing theregistration and titling process for snowmo-biles and ATVs from 311 days to one day.Team of the Year awards recognize docu-mented, measureable results supportingcompletion of a project that improved theeffectiveness or efficiency of processes within the Iowa State Government, orreduced costs, improved customer service, or assisted Iowa State government in meeting established goals. Richard Holland is nowmanaging TBM’s India practice. Richard will remain in charge of the UK operation while he helps us further develop the practice in India. Gary Hoover has been named manager of the European consulting practice. Gary and his family will move to Germany, where he will be based for the next three years. EddieKembery has been named team leader for the UK practice. MaribelBarrientos is the new assistant in theMexico office.

CASESTUDYNorfolk Southern: Giving Customers More Value for Their Transportation CostsMike Ca l d well, TBM Senior Management Consultant

2

Last year’s skyrocketing fuel pricesmade many of us look at transportation in anew light. As fuel prices rose, so did theprices of seemingly unrelated items, like groceries or building supplies. Often wedon’t think about transportation—at leastnot until any problems that affect the transportation industry start hitting us inour pocketbooks. But in truth efficienttransportation is what makes our consumereconomy work. Without it, goods couldn’tbe moved from where they are produced towhere they are consumed. And as both production and consumption go global, thetransportation industry plays an ever morecrucial role in making sure the goods getwhere they need to be on time.

Norfolk Southern Corporation (NYSE:NSC) is one of the nation’s premier transportation companies. Its NorfolkSouthern Railway subsidiary operatesapproximately 21,000 route miles in 22states and the District of Columbia andserves every major container port in the eastern United States, while also providingsuperior connections to western rail carriers.The company employs 31,000 people andhas 13 classification (hump) rail yards, 8

major system locomotive shops, 14 smallerdivision locomotive shops, and a total of 26fixed facilities handling the servicing needsof these locomotives between runs. NorfolkSouthern operates the most extensiveintermodal network in the East and is NorthAmerica’s largest rail carrier of metals andautomotive products. Railroads are alsoresponsible for 75 percent of all automobiletransport. The fastest growing segment ofthe business is in moving containers to terminals, where they are picked up by thecustomers.

People depend on Norfolk Southern’sability to get products where they aresupposed to be on time, every time. Whenfreight is shipped, the customer already hascapital tied up in that freight, and thatmoney can’t be freed up until the customerhas the product in hand and can put it onthe shelf to sell. Late arrivals aren’t just aninconvenience; they cost money.

Managing Times | Q1.09www.managingtimes.com

Tracking Time and MoneyIn the freight business, time is the key.

The time you’ve promised to deliver the customer’s products to him. The time ittakes to manage trains in rail yards. Thetime needed to service locomotives to keepthem running at peak performance. Theultimate goal is to keep the trains runningon time, which is very important from a customer point of view.

The greatest kaizen effort at NorfolkSouthern has been geared toward locomotiveperformance and maintenance. This wasstraight kaizen work performed in the maintenance shops of the MechanicalDepartment in order to decrease the amountof time a locomotive is out of service. Therailroad has about 3,800 locomotives.

The lifespan of a locomotive is between20 and 40 years. The majority is used forover-the-road freight hauling for their first15–20 years and then are “cascaded down”to the rail yards to switch cars around theterminals. Similar to the airline model, fed-eral regulations require that each locomotivereceive increasing levels of maintenanceinspections at regular intervals: daily, 92days, 184 days, 368 days, 36 months, and60 months. Understandably, the longerinterval inspections require more time in themaintenance shop. Additionally, each loco-motive will receive two to three completeoverhauls in its lifetime.

Locomotives are also inspected andfueled daily, although they don’t need to goto maintenance shops for daily inspections,nor do they require fuel at every stop. Stilldaily inspections and fueling do take time,and that time must be accounted for.Clearly, keeping those engines running mustbe a top priority for a business that relies onon-time delivery.

According to Gerhard Thelen, vice president of operations planning and support, additional business can be gainedby keeping as many locomotives running aspossible and is one way for the company toincrease profitability. “We want to spend as

little time on maintenance activities as possible, without sacrificing quality,” he says.“Any time cycle time can be reduced, ithelps the customer.” Reducing the amountof time required to maintain the locomotivescould also translate into a need for fewerlocomotives to do the same amount of haul-ing that’s being done now. Or the companycan use the same number of locomotives andincrease business. Either way, keeping thelocomotives running means providing theircustomers with the service they have cometo expect from Norfolk Southern.

––––––––––––––the vision: To be the

safest, most customer-focused and successful

transportation companyin the world

––––––––––––––According to Mark Smyre, manager of

quality process improvement, the companyhas seen up to a 20 percent reduction indwell time as a result of its kaizen activities(dwell time is the amount of time the locomotive spends in the maintenancecycle). Although you might think that thiswould mean that the MechanicalDepartment is releasing all of its locomotivesback out onto the tracks sooner, in reality,some are going back out sooner, but for others, the company has chosen to dedicatethe time savings gained to identify and fixitems that can lead to potential failures.

“Unfortunately some locomotives don’tstay out for the full 92-day cycle beforeneeding unscheduled repairs,” Smyre notes.“If we can take the time we’ve saved in ourgeneral maintenance cycle to perform proactive inspections, then we can identifypotential defects and address them beforethey become an unscheduled maintenanceproblem, which ultimately saves ourselves

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and our customers time and money.” So how did they cut dwell time by 20

percent? They did it largely by focusing onthe seven wastes—especially material transportation, wasted motion, waiting onparts, over processing (doing things thatweren’t necessary), and defects. Defects aredefined as missing the identification of apotential failure and therefore not correctingit before the engine leaves the shop. “Wedon’t want to compromise the size of ourfleet as a result of missed opportunities,”notes Smyre, “because we need the fleet topull our freight.” So it makes sense toaddress potential problems while the locomotive is already in the shop, and sincetime has been gained by applying lean principles to the process, the maintenancecrews can afford to spend extra time whennecessary to ensure the quality of theirinspections.

And that leads to the second part ofcutting dwell time: standard work. “We alsore-evaluated inspection procedures,” Smyresays. “Standardization of our work processeswas critical.”

Rail Yards: They Aren’t the Back OfficeBeing on time isn’t all about keeping

the locomotives running though. Anotherpotential time sink is the rail yard. In railyards, which operate in a hub-and-spokemanner, inbound trains are received; theirengines are moved off for inspection orrefueling, and the cars are shifted around todifferent trains with new engines and newdestinations. As you can imagine, shiftingrail cars and engines around and mixing andmatching to create new trains, when everything must be confined to tracks, canbe tricky and time consuming. In fact,according to Thelen, the greatest chance fordelays to occur is when cars are being movedaround yards. So it made sense to apply leanto the yards as well.

CASESTUDY

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Generally when we think of businessprocess kaizen (BPK) events, we think ofevents that help create smoother flow in theback office, but at Norfolk Southern, BPK isthe method of choice for gaining greaterefficiency in the yards.

Rail yards face a number of unique issues:• Car inspection—finding, handling, and

repairing cars in the yard• Car handling—optimal utilization of

crews for the most efficient movement of cars through the yard; extra crews must be justified

• Locomotive handling—efficiently moving engines to the maintenance andrefueling areas

• Defect handling—what to do with damaged cars

“We are learning to view processes fromthe viewpoint of our customers, says TerryEvans, vice president of operations planningand budget. “To a customer, one-piece flowwould mean that we would tow each railcarwith its own locomotive directly to the customer’s dock. We fully understand thatwe must run this business economically, butwe must keep the customers view in mind.As we continue to identify process waste, weunderstand that there is an abundance ofopportunities for improvement.”

To date, No rfolk Southern has conducted10 BPK events. The purpose of a rail yardBPK is to look at the entire flow of theprocess from cradle (inbound train) to grave(outbound train). They follow the same procedure as for any other BPK, mappingout the entire process using sticky notes onthe walls. Doing so allows them to visualizeall of the steps, including tasks, decisions,delays, and inventory. “We then identifiedthe value-added steps in each process andtried to reduce or even eliminate some ofthe non-value-added steps,” says Smyre. “Asalways, the value-added step is the one thecustomer is willing to pay for, and in the railyard, the basic value-added service is gettingthe customer’s car onto the right train and

then getting that train out of the terminalon time.”

Their objective for a BPK is to increasecar velocity through the yards. By using theprocess map, it was easier to see where thepotential bottlenecks were. “In one case,”says Smyre, “we found that a train comingout of one particular yard could be betterserved by a different yard on the system, sowe asked the Service Design Department tore-route that train out of a different terminalto better serve our customers.”

A typical rail yard process might looklike this: When a train enters a terminal, it isfirst parked in a receiving yard and theengine is cut off from the train and goes tothe engine house for service. The body ofthe train is left parked in the receiving yarduntil its individual cars are “humped” onto“classification tracks.” Once the various carsfrom the inbound train have been separatedoff and shifted onto the appropriate classification track, they are joined up withother cars bound for the same destination.At the opposite end of the classificationtracks, the cars are pulled out and put into a“forwarding yard.” From there they aredispersed onto outbound trains.

Rail yard BPKs have also allowedNorfolk Southern to take a close look atstaffing alignment to make sure that theyhave people where they’re really needed. Thismay seem to be common sense, but sometimes traditional staffing methods justremain in place and new people will be hiredwhen in fact simply making sure that youhave the right people in the right places is allthat’s really needed.

Another benefit that the company hasgained from BPKs is the “viral spread oflean.” “When we put together a team for anevent, we include agreement and non-agree-ment people local to the terminal and alsofrom outside the terminal who can come inand see things that the local employees mayoverlook due to familiarity,” says Smyre.“Union leaders have been very supportive ofour lean initiatives,” he adds, “and from the

Norfolk Southern has gained the

following results through its kaizen

activities:

–––––––––––––––––––––––––––––

20 percent reduction in dwell time

(the amount of time trains spend in

the maintenance yard)

–––––––––––––––––––––––––––––

Ability to use dwell time more

effectively by adding value-added

preventative maintenance activities

–––––––––––––––––––––––––––––

Creation of standardized work

processes

–––––––––––––––––––––––––––––

A relentless focus on waste

elimination

–––––––––––––––––––––––––––––

The viral spread of lean throughout

the organization

–––––––––––––––––––––––––––––

Meeting customer requirements

by ensuring shipments are received

on-time, as promised, like

“clockwork.”

–––––––––––––––––––––––––––––

point of view of our agreement employees, it instills ownership in our continuousimprovement process.”

“Having these events has not onlygained us process improvements,” continuesSmyre, “it’s also helped to familiarize ourworkers with their own terminals, some ofwhich are large, complex places. And theoutside workers invariably take the goodideas back and apply them at their own terminals.”

InterconnectednessWhile it may seem that lean events at

Norfolk Southern have been focused on twovery different areas, they are in fact connect-ed. Making the Mechanical Departmentmore efficient has a direct impact on theTransportation Department, which is actually an internal customer of theMechanical Department, because withouthealthy locomotives the TransportationDepartment can’t get trains to their destina-tions on time. And if the TransportationDepartment can’t operate efficiently, thenthe company might not be able to leveragethe improvements in train maintenance togrow its business.

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But ultimately Norfolk Southern hasfocused lean on its business for one mainreason: efficient transportation means thatcustomers get more value for their trans-portation costs. “Efficiency and on-time performance of the railroad has a directfinancial impact on the customer that goesbeyond the simple cost of transportation,”notes Thelen. “And that also means profitfor Norfolk Southern, because those companies with better service performancecan charge more for that service. Again it’s amatter of perceived value. Customers wanttheir products on time and they want delivery times to be consistent; that is, if aproduct is coming from a particular location,they want it to arrive in the same timeframeevery time. Our customers want to knowthat they will be receiving their shipmentslike clockwork. Norfolk Southern can guar-antee that sort of delivery schedule thanks toits continuous improvement efforts.”

Blue-Ribbon StandardNorfolk Southern has already set the

standard in rail transportation, and now it’sdoing the same with lean and kaizen.“During a visit to Norfolk Southern, aUnion Pacific mechanical officer who sat in

on a portion of our kaizen activities marve l e dat the progress we have achieved in such ashort period,” says Smyre. And no one needsfear that the gains in efficiency have causedslippage in other areas: for nineteen consecu-tives years Norfolk Southern has won thecoveted Harriman Safety Award for havingthe safest employees in the railroad industry.

Lean has given the employees ofNorfolk Southern a renewed pride in theirwork. Says Thelen, “I see the passion in ouremployees’ eyes as they display their kaizenimprovements, and those teams are display-ing a sense of urgency. That will not be easily matched by the competition.”

“Customer satisfaction will remain as a driving force for quality at Norfolk Southern. A high level of safety awareness

will always precede our efforts for continual improvement.” –Mark Smyre, Manager of Quality Process Improvement

The textile industry has faced sometough challenges in recent times, includingrecession, globalization, and rising raw materials and labor costs. Although thesesorts of issues can spell trouble, companiesthat use LeanSigma® proactively to trans-form themselves into world-class operationscan avoid the worst of the problems and flourish. Last year, Seaman Corporation, anindustrial fabrics manufacturer, achievedrecord sales, and maintained gross marginsfrom those sales in light of dramaticallyincreased raw material costs. Had raw materials costs not increased significantly,the company would easily have improved ongross margin, notes Richard Seaman, president and CEO of the company. “This isin large part due to our efforts to increase capa-b i l i t y and capacity and reduce costs throughLeanSigma,” he adds. “Lean will continue toallow us to take waste out and keep costsd own while optimizing our business.”

Seaman is privately owned and wasfounded in Ohio in 1949. It is currentlyheadquartered in Wooster, Ohio, with factories in Wooster and Bristol, Tennessee.Seaman is not a typical process manufactur-er, which we most often associate with thefood, beverage, and pharmaceutical industries,but instead makes industrial coated fabricssuch as high-performance roofing systemsand architectural structures, geomembraneliners, truck tarps, and sign facing. JohnCrum, vice president of operations for thecompany, says, “When we put up a roll [offabric] on a line, we pretty much have toprocess through that roll. If we stop theprocess, we’re going to produce bad product,and that’s why we’re considered a continuousoperation or a process industry.”

On starting their lean journey, Crumcomments, “I wondered if lean could beapplied to our process and where to start

with the process. We really started trying tocreate value through quality, productivity,and responsiveness to our customers. Weneeded to create flexibility in our processand we needed to create standard work.”

Gains EverywhereThe company first implemented lean

on their calendar lines, which at the timehad a four-hour changeover time. “Our setups were very long, which is typical of aprocess industry,” notes Crum. For their firstkaizen event, they brought in calendar lineteam members from both plants plus severalengineers. The team was able to reducechangeover time on the line by 75 percent.Reducing changeover time increased thecompany’s flexibility and productivity byallowing them to produce more special itemsin a day than they had been able to do inthe past. Says Crum, “We are running moreset ups a day than we did three years agoand this in turn means that we can be moreresponsive to our customer base. We havetransformed from a rigid production schedule to a flexible one.”

Additionally, Crum attributes lean withenabling the company to cut its productionlot sizes in half, which in turn allows formore diversity in the production schedule.“Before lean, we thought we had to havelarge production runs to gain productivity,”says Crum.

Stopped production lines are generallyanathema in process industries, but atSeaman, if a lean event requires suspendingproduction on a line for 8–10 hours, Crumconsiders it part of doing business. Why?Because any revenue loss incurred by

CASESTUDY Seaman Corporation Is on the Transformation Fast Tr a c kJonathan W h e a t l e y, TBM Senior Management Consultant

––––––––––––––“Lean will continue toallow us to take waste

out and keep costs down while optimizing

our business.” –Richard Seaman

––––––––––––––

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Richard N. Seaman President and CEO, Seaman Corp.

shutting down a line is more than made upfor by the gains achieved by the event. Infact, Crum expects TBM-facilitated eventsundertaken at either plant to return anannualized average return factor of 3–5times over the cost of the event. Seaman hasmaintained these returns on LeanSigmaevent investment even with the economy ina downturn.

Standard WorkAnother lean tool, standard work, has

helped the company to vastly improve quali-ty. According to Crum, several hundreds ofyards of material would be run on a linebefore the necessary quality was achieved,but with the implementation of standardwork they can now achieve that same levelof quality while reducing change over start-up scrap by 87 percent. Everything isinterconnected when it comes to the gainsmade through lean, so work in one area may

well provide benefits in another. For example,improved quality helps reduce costs becausethe company produces less off-grade materi-al (scrap). That in turn affects capacity,because less scrap translates into more goodmaterial, which directly translates intoincreased capacity.

“First-run yields have also benefitedfrom the implementation of lean, with closeto a 40 percent overall reduction” addsSeaman. This improvement in off grades hashelped in offsetting the increased cost ofmaterial. He notes that lean has enabled thecompany to significantly improve responsetimes and capability as well. “Over the coming months, even if we don’t have a lotof opportunities to reduce costs, we do haveopportunities to increase productivity,” headds, “and this includes productivity of oursales people.” And so the improvements willkeep coming.

Capital AvoidanceOne big savings companies can realize

through lean is reduced capital expenditures.Crum notes, “We would rather optimize ourcurrent capital investment through lean thanpursue additional capital investment.” Henotes that improving productivity ofmachines by a 15 percent increase representsa higher return on investment than youcould expect to get through capital expendi-tures, especially when you must also factorin depreciation. “You leverage your assets byusing lean,” he says. “The ability to use flexibility and increased capacity to grow thetop line is a winning equation.”

When a capital expenditure is consid-ered, it must offer greater benefit than couldbe gained simply by increasing capacity andflexibility. For example, adding a line thatcould handle wider-width material mightmake sense because it could not only helpimprove quality of a product—through

7Managing Times | Q1.09www.managingtimes.com

This custom architectural tension structure, part of the Sault Ste. Marie, Ontario, Canada, welcome center, features Shelter-Rite® fabric, coated withTedlar® PVF film for ease of cleaning and UV protection.

fewer welds or sewing points—but also create access to new customers.

Capital avoidance is always an attractivealternative. Lean can provide the option ofnot having to make capital investments.Seaman thought that it would have to investnearly $2 million in on-site compounding atthe Bristol plant. By linking the results ofs e veral events, which included transport a t i o nas well as space and time that had been freedup through lean efforts, the company wasable to increase the capacity for compound-ing at the Wooster site, and then use animproved transportation loop to deliver dryblend compound to the Bristol site.

A Critical Eye Toward Project SelectionOne way that Seaman is able to achieve

such a high return on investment from itslean projects is through a very rigorous selection process. “Lean has given us a goodprocess for project selection,” says Crum.“We select projects that have potential forreal bottom-line results. Selection may taketwo to three days, but the end result ofselecting projects with the greatest impact—the highest return on investment—is critical.” One key to success is to stay awayfrom intangibles during project selection.

The company uses the value streammap to identify opportunities and animpact-difficulty matrix to help standardizeand codify the process. Impact-difficultymatrices are divided into four quadrants,with increasing impact and difficulty goingup and to the right, so that high-impact butdifficult projects are listed in the top rightquadrant, and high-impact but relatively easier projects are listed in the upper leftquadrant. Projects that appear in the lowerright and left quadrants represent lower levels of impact and difficulty.

Seaman approaches upper right quad-rant projects as those that will require out-side help from TBM. Upper-left-quadrantprojects are those that can be led in-house.Projects that appear in the lower left quadrant are considered one-to-two-day“just do it” events.

This is a very methodical and logicalway to weed through potential projects andchoose only those that will have the greatestimpact. It allows the company to connectthe dots between what they agree needs tobe done during planning and review withprojects that fit the lean strategy and theyearly business plan. Seaman sets itsLeanSigma strategy during its planning and

BRISTOL IMPACT/DIFFICULTY MATRIX

–––––––––––––––––––––––––––––– DIFFICULTY –––––––––––––––––––––––––––––––>

Seaman-Led Events• Warehouse eRaws• Shop Supplies• IP Freight• IP Demand Segmentation /

Inventory• Slitter Productivity• Hiring and Training

TBM-Led Events• FTR Off-grade $$• REC Off-grade $$

“Just Do It” Supervisor 20-DayProjects• Yarn Milk Run / Kan Ban

Show the Payback - ROI

Seaman’s rigorous project-

selection process and intense

focus on sustainment has led to

some amazing results:

–––––––––––––––––––––––––––––

Improved first-pass yields to

96 percent

–––––––––––––––––––––––––––––

Reduction in set-up times

of up to 75 percent

–––––––––––––––––––––––––––––

21 percent average increase in

productivity

–––––––––––––––––––––––––––––

An average $100,000 return on

every TBM-led lean event

–––––––––––––––––––––––––––––

$2 million in capital avoidance for

one facility as a result of

improved productivity and yield

and faster set-up times

–––––––––––––––––––––––––––––

Minimum 3–5X return on all

consulting engagements

8 Managing Times | Q1.09www.managingtimes.com

review sessions twice a year. Planning andreview stems from that established strategy.Then the company plans projects using theimpact-difficulty matrix, making sure thatprojects are tied back to the corporate business plan for the year. In this way,Seaman aligns its plans and its resources togenerate both top- and bottom-line gains—gains that can be achieved even in an economic downturn.

If you compare Seaman’s progress withother companies who have been working ontheir lean journey for the same amount oftime, it becomes clear that Seaman’s disci-pline and project selection methods havepaid off for the company. From a processcapability and a Sigma kaizen standpoint,Seaman has managed to shift the entiretransformation process up by six months—moving through critical phases much soonerthan the average company. By being able toaccelerate the process, Seaman is able to reapthe benefits of lean much more quickly.

Sustainment: Managing for MonthlyImprovement

Often organizations that have embarkedon a lean journey obtain great early resultsbut then struggle with sustainment. “Manycompanies have successful events and thendown the line find themselves doing thoseevents over because they failed to sustain theimprovements,” notes Crum. “We use a

process we call managing for monthlyimprovement (MMI), where the operationsgroup takes about five minutes to go overeach event and determine whether the gainsfrom that event are being sustained.”

They use a red, yellow, and green tagprocess, with green tags going to thoseevents whose results are being sustained, yellow tags for events whose results are indanger of slipping, and red tags for thoseevents that have failed to sustain for whatev-er reason. They then go back and addressthose areas that are slipping or failing andbring them back up to green status. Byreviewing event sustainment monthly andaddressing problems immediately, the company has created a benchmark model forsustainment.

As with project selection, Seaman alsohas a rigorous process for ensuring sustain-ment. Sustainment ultimately depends onaccountability, and by setting up a monthlyreview process, the company has found away to hold everyone accountable for sus-taining results.

A Key to Success: Focus, Focus, FocusOne overriding theme you will notice at

Seaman is a very intense focus on their leanefforts. Crum acknowledges, “It’s all aboutfocus—knowing where you want to go,what you’re trying to achieve, and makingsure you stay on task. The second you’re too

busy to focus on lean it will fall apart.”“You must be committed and must

have leaders with passion,” he adds. “If youdon’t set high standards, you’ll achieve lowstandards. You have to believe that everyevent has the potential for breakthroughchanges.”

Indeed the focus of which Crum speaksis evident in the way the company selectsprojects and the way it sustains them. It’s thesort of focus that other companies—bothnew to the journey and well along it—cantake to heart. Learning how to rigorouslydeselect projects so that you can gain theutmost from your lean efforts and then set-ting up a strict process by which you holdeveryone accountable for the sustainment ofgains—like Seaman’s MMI process—is howothers can build from Seaman’s story. AsRichard Seaman notes, “A quality initiativeis a never ending journey. LeanSigma mustbe institutionalized; it must become a way oflife.” In truth it has become a way of life atthe company, and if you follow their lead,you will be able to institutionalize lean intoyour culture for the kind of long-term suc-cess that lean promises, no matter what theeconomic climate.

Managing Times | Q1.09www.managingtimes.com

9

Seaman’s Fiber-Tite® roofing system was chosen to cover thenew state-of-the-art high school and community center inWooster, OH.

This geomembrane system was used as an alternative to clay-based systems to line anoffshore waste-containment bund (embankment or dike) for the government ofSingapore.

10Managing Times | Q1.09www.tbmcg.com/news/newsletter.php

Airlines are required to regularly takeaircraft out of service for scheduled heavymaintenance, a requirement that isn’t takenlightly in these safety-conscious times.Heavy maintenance, known as C-check, canremove a aircraft from service for anywherefrom five days to two weeks. Airlines makemoney when aircraft are flying, so findingapproaches to making the maintenanceprocess more efficient while also increasingthe quality of that process means that airlines can improve their revenue withoutsacrificing safety or quality.

A C-check consists of three phases.When a aircraft enters a maintenance hangarfor a C-check, it is completely gutted—everything from inside the aircraft isremoved, including the cockpit, the galley,the lavatories, the seats, the overhead bins,the floorboards, and the headliners. Oncethe aircraft has been completely “opened”then it must be cleaned inside and out toprepare it for inspection.

The inspection phase requires two orthree people, who use checklists to examineeach section of the aircraft. What the check-lists require depends on the usage of the aircraft prior to that inspection.

Aircraft arrive at the maintenancehangar with a list of known maintenanceitems that must be completed, for example,items that have reached their maximum uselife and must be replaced. The inspectionprocess generates another list of unplannedmaintenance items that must also beaddressed.

The third phase of the process is “closeup,” where all maintenance and repairs havebeen completed and everything is put backin the aircraft to ready it for use.

The kaizen process was also approachedin phases. The initial part of the workfocused on the “open up and inspect”process, looking at how long it took to openup the aircraft and get it cleaned and

inspected and ready to move into the repairphase. This was basic kaizen work thatinvolved a lot of 5S, establishing visual con-trols, and improved parts management tohelp drive productivity. In this phase, thecompany’s goals were to review and map thecurrent-state process, reduce “open up” leadtime, and develop a perf o r m a n c e - m a n a g e m e n tprocess. The results obtained during thisfirst phase showed the promise of futuregains through continued application of leantools and kaizen.

Physical Fitness ReportThe first step for addressing C-check

efficiency was to map the current state andidentify problems and wasteful practices.Among the issues that caused increased costsand reduced efficiency were the following:

• Excess walking during “open up and close” process

• Parts storage (including risk of damage to parts and time spent finding parts)

• Time spent locating tools• Cannibalization of parts• Time spent cleaning the aircraft—

varying definitions of “clean”• Time required to label parts—a

necessary non-value-added process• Poorly defined standard work• Missed defects (i.e., defects that were

found at close)• Lack of metrics• Mechanic turnover and new mechanic

training• Lack of workload balancing

The process had just a 77 percent on-time record while at the same time logging an average of 350 hours of overtimeevery two weeks.

Next, the kaizen team prepared aspaghetti diagram of the current-state openup process. They found that the walkingtime alone during open and close consumed

T E C HTA L K Using LeanSigma® to Keep Routine Aircraft Checkups Safe and Eff i c i e n tBill Remy, Global Director, Continuous Improvement, Invensys

11Managing Times | Q1.09www.managingtimes.com

5 hours. Searching for parts during close ateup another 7.5 hours. The problem was thatwhile parts were stored on shelves and inbins, which were labeled, they weren’t neces-sarily stored in any sort of logical order sothat when it came time to put them back inthe aircraft a lot of time was wasted lookingfor the proper parts.

A Kaizen Prescription To address this problem, one of the first

things the kaizen team did was to create anew set of racks and rolling containers thatwe re identified and stored by aircraft section.Containers we re also tailored to accommodatecertain items, such as overhead bins. As the

interior was torn down, the parts wereplaced in order in these racks and bins sothat when it came time to put them back onthe aircraft, all anyone had to do was workin reverse order through the same racks andbins to find the needed parts for the appro-priate section of the aircraft. Each cart waslabeled and contained a bill of material thatstated exactly what was in the cart and whereit goes in the aircraft. By tailoring carts forspecific parts, the risk of parts damage wasalso minimized. This example of creating avisual workplace and reducing waste byusing 5S made a huge difference in theamount of time that was wasted walking andlooking for parts. At the same time, the team

looked at ways to improve the flow of partsto and from the aircraft by reworking thefloor plan and storage locations for the cartsand bins.

The team also created a “Safety, Quality,Cost, and Delivery” (SQCD) board onwhich they recorded both planned andunplanned work hours, how many “s q u a w k s”(rejects) were found on a particular aircraft,and what the maintenance cycle time was,and they were able to see some significantreductions in turnaround time. These mayseem like relatively small changes, but theresult was to reduce the time the aircraftspent in the maintenance hangar by a day. Inrevenue terms, one day is a big step closer to

Kaizen Focus

Open/closeup walking time

Time spent locating parts

Floor space (ft2)

Lead time (open/close up)

Before Kaizen

152 minutes x 2

6-8 hours

1200 ft2

4.5 days

C-check Kaizen Results

Target Improvement

50%

50-75%

50%

20%

After Kaizen

52 minutes x 2

<1 hour

766 ft2

3.5 days

Results Achieved

100 minutes x 2,or 200 minutesper C-check

5-7 hours savedper C-check

434 ft2

1 day, 70-90 crewhours

Percent Improvement

66% reduction

>80% reduction

35% reduction

22% reduction

12 Managing Times | Q1.09www.managingtimes.com

the goal of reducing maintenance time byfive days. Five days is the equivalent of onewhole aircraft that was then available to flyand generate revenue.

Here a Part, There a PartAlthough not truly a part of the C-

check process, the airline also used kaizen toaddress some overnight maintenance issues.In the normal course of events, aircraft willarrive at a final destination at the end of theday—the overnight base. Standard mainte-nance is performed on aircraft during thebrief overnight “rest” period, but due tofaulty business processes often the airlinefound that the needed parts weren’t in theright locations. This meant having to courierparts from one overnight base to another inorder to have the aircraft ready to fly onschedule. Obviously the cost of courieringp a rts around the country can quickly add up.

In this case, the airline used a businessprocess kaizen (BPK) to address parts movement and replenishment at overnightbases. One very successful BPK event centered on the large backlog of purchase

orders and the lack of daily turnover forparts ordering. By taking a segmentationapproach and assigning different parts ordering to different people or groups, thecompany was able to start turning purchaseorders daily. This was a huge step towardsolving the courier challenge because onereason overnight bases were running out ofneeded parts was a lack of timely ordering ofthose parts.

Some small but significant changes inthe process around parts ordering enabledthe airline to realize a tremendous savings inthe logistics costs invo l ved with parts couriering.

Onward and UpwardThe next big efficiency push planned

for the C-check process is managing plannedand unplanned repairs. This is not straight-forward and will require concentration onrouting standardization and creating flow inthe actual repair process. Given the age ofthis particular fleet of aircraft, total requiredrepair hours are divided about evenlybetween planned and unplanned repairs.This means that if a aircraft requires 1,000hours of total work, only half of that isknown about when the aircraft arrives in themaintenance hangar. An additional 500hours worth of work will be generated fromthe inspections. This creates an additionallevel of complexity because fully half thework cannot be anticipated before the aircraft arrives, so the challenge will be tocreate better flow in spite of that hugeunknown factor.

One strategy being considered is to lookat the types of unplanned repairs that arebeing repeated from aircraft to aircraft. Ifcertain unplanned repairs are required in amajority of the aircraft, then it makes senseto automatically plan for those repairs, evenif they aren’t part of the standard checklist.This will involve revisiting some of the

assumptions and parameters on which theplanning system is based and then workingout a process for sequencing those repairs.This is the next big piece to be worked on.

Another area that will be tackled infuture events is managing for daily improve-ment (MDI). The challenge in the aircraft-repair process is that cycle or takt times foraircraft repairs must be measured in hours ordays. For example, removal and replacementof an engine requires something like 25hours. Thus we have to take a differentapproach to MDI so that line leaders andsupervisors understand how to knowwhether at the end of the shift, or midwaythrough the shift, they are on schedule. Theconcept of an hour-by-hour chart changes tosomething more like a shift-by-shift chart inthis type of business, so the company willneed to take a more creative approach tosome of these problems. But kaizen and con-tinuous improvement embrace creativity, soit’s entirely possible for even organizationswith unique situations to make the power ofkaizen work for them.

Taking OffClearly this airline is just in the earliest

stages of its lean journey, but already it hasfound ways to improve quality and safety,save time, and reduce costs. Savings in walking time, parts location, and lead timemean that maintenance crews need to put inless overtime, while also getting aircraftthrough the repair process more quickly andefficiently. This means that more aircraft canbe serviced in one location and that the aircraft are in the air longer, which meansgreater revenue for the airline. If this onecompany can gain this much from those first small steps on a lean journey, imaginehow high it can fly once lean becomes a way of life.

13Managing Times | Q1.09www.managingtimes.com

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TBM LeanSigma® Institute 2009 Schedule Highlights

MANAGINGQ 1 . 0 9

TIMES

LeanSigma Vision Tour – April 22, 2009 WIKA Instrument Corporation, Atlanta, GA Tour Focus: Lean Supply and Distribution

WIKA will dive deep into the work they have done on their value chain tomake the following improvements:• Increased shipping capacity for new products in less space with no

additional manpower• Synchronized sales and operations planning• Model replenishment system for kanban and pick-to-order components• Mixed-model production line running a 50/50 mix of make-to-order and

make-to-stock

Go to: www.tbmcg.com/lsvt for more information.

LeanSigma Vision Tour – April 30, 2009 CONMED Corporation, Utica, NYTour Focus: Enterprise-wide Lean Transformation

CONMED will dive deep into the work they have done to accelerate theirlean transformation:• 100 percent management participation in the first year• 30 percent employee participation in the first year• 85 percent reduction in line-side inventory• 66 percent reduction in floor space• Seasoned employees freed up to support new growth initiatives

Go to: www.tbmcg.com/lsvt for more information.

Food & Beverage Industry LeanSigma FundamentalsMarch 31 – April 1, 2009 Melbourne, Australia

A two-day introductory workshop about the LeanSigma approachfor rapid business improvement in the food and beverage industry.

See how lean and Six Sigma, together in a coordinated initiative, canhelp you achieve substantial new efficiencies and sustained revenueand profit growth.

Go to: www.tbmcg.com/lsfood for more information.

Kaizen Breakthrough Experience – May 18-22, 2009 CONMED Corporation, Utica, NYExperience the dramatic bottom-line improvement and efficiency you canquickly achieve and sustain as your kaizen team implements lean tools inan actual business operation.

Go to www.tbmcg.com/kbe for more information.

LeanSigma Global Summit – September 16-18, 2009 Las Vegas, NVWith tracks for both discrete and continuous process manufacturers, theLeanSigma Global Summit provides senior leaders, operations managementand continuous improvement teams with insights for creating operationalagility in today’s tumultuous business environment.

Go to www.tbmcg.com/golean for more information.

Lean Certification – All Year TBM Lean Certification Programs are comprehensive programs for companies that wish to develop in-house expertise to guide their organizationthrough a lean transformation.

Go to www.tbmcg.com/leancert for more information.