Building Responsibility and Accountability for Quality and Delivery with Lean Manufacturing

Challenge
This long-established metal processing company was faced with problems common to many heavy industrial manufacturers, namely strong unionisation, increasing pressure from imports and product substitution, limited product differentiation, rising operating costs and declining volumes. The company’s challenge was to achieve simultaneous improvements in SQDCP (Safety, Quality, Delivery, Cost, People) and to differentiate itself to customers through quality and delivery. Corporate Partners was brought in to help meet the challenge.

Excellent Outcomes at a Glance

  • Quality: Reduction in rejects of 65%
  • Delivery: Improvement in DIFOT from 75% to 98%
  • Delivery: Reduction in lead-time from 12 to 6 days
  • Safety: Reduction in referable injury (TRIFR) from 45 to 28 (Improvements continue, the current TRIFR is 10.9)
Solution
Corporate Partners set about understanding all the elements of the manufacturing process from actioning an order to making final delivery. They identified a high percentage of rejects as an issue, and worked on instilling a philosophy to never accept, never make, and never pass on poor quality. This required a paradigm shift from relying on the final inspection to building quality into every stage of the manufacturing process.

Mini Business Teams (MBTs) played a vital role in bringing about this shift. MBTs were established and customer-supplier relationships were set up between MBTs for all internal processes. The MBTs were empowered to set expectations for quality and time of delivery, and to identify and address the root causes for failing to meet these expectations.

DIFOT (delivery in full on time) was formally measured and recorded, and as a consequence all MBTs became more focused on solving the problems of material and information flow.

Another focus for the company was improving safety. Corporate Partners applied the 5S tool as well as visual safety discussions (among MBTs) to create a safe, organised, productive and clean workplace.

DIFOT performance for metal processing company

DIFOT was formally measured and recorded and became a focus for all teams.

lead time performance for metal processing company

The company reduced average lead times from 12 days to 6 days.

Results
Individual teams all contributed to reducing the percentage of rejects. One MBT was initially able to reduce rejects from 11% to 1.7%, with further improvements bringing reject rates down to less than 0.5%.

Over the long term, across the site, the percentage of rejects was reduced from 13.9% to 4.6%; it stabilised at around 5%. This equated to a 65% reduction in rejects from when measurement commenced.

With all MBTs focused on improving delivery, either to internal customers or the end customer, the company improved DIFOT from 75% to 98% and reduced lead-times from 12 days to 6 days.

The company reduced the referable injury rate from 45 to 28 and subsequently won a safety award. The company staged a family day to celebrate the award so employees could share their pride with their families.

chart showing reduction in rejects

Across the site all MBTs contributed to a reduction in rejects from 13.9% to 4.6%. This equates to a 65% reduction.

chart showing safety performance in metal processing company

The company reduced the referable injury rate from 45 to 28. They won a safety award which was celebrated with employees and their families.