Lean Manufacturing Drives Employee Engagement in Business Improvement

In this Lean Manufacturing case study we explore how an Australian company reduced their workers compensation premiums by 33%.The metal fabrication business had been operating since 1972, manufacturing products for diverse industries including mining, transport and catering. The business has 105 staff in one location performing a variety of functions from stamping, laser cutting, folding and welding to painting and assembly.

To succeed in the contemporary environment, the owners realised they needed an extra edge on their competitors and engaged Corporate Partners to implement an operational excellence program.

Staff had previously received training in quality assurance, health and safety, and environmental management, nevertheless non-conformance was not diligently recorded, significant time was lost due to injuries, and there were clearly opportunities for improvement.

Excellent Outcomes at a Glance

  • Quality: Cost of non-conformance down by 18%
  • Safety: Lost time injuries ration down by 85%
  • Safety: Workers compensation premium reduced by 33%
  • People: 2842 improvement suggestions in 12 months
  • Delivery: DIFOT for A Class customers improves from 70% to 90%

Corporate Partners established Mini Business Teams (a Lean Manufacturing tool) throughout the organisation to engage employees in the business improvement process. The teams have formalised daily meetings to discuss all aspects of their performance. The teams have visual boards displaying charts that set out the team goals and plot the team’s performance on the five key measures of quality, cost, safety, delivery and people.

Employees see the relationship between what they are doing and the strategic goals for the business. They are motivated to suggest improvements that contribute to these common goals and the regular meetings provide a forum for making these suggestions.

To address the amount of time being lost due to injuries, employees underwent manual handling training and a process was instituted for preparing Safe Work Instructions (SWIs). SWIs describe what is required to operate a particular machine and the procedure to follow in event of an emergency. An investigation takes place if an injury occurs to see if the SWI was followed and if not, why not. If the SWI was followed but has shown to be ineffective, the SWI is reviewed and updated.

Lean Manufacturing Results
Employees see the cost to the business of non-conformance and can now see the value of recording all non-conformance so issues can be identified and resolved. The cost of non-conformance has declined by 18%.

In 12 months the lost time injuries ratio went down by 85% and workers compensation premiums were reduced by 33%.

Employee engagement increased significantly. In 12 months the business formally logged 2842 improvement suggestions, two-thirds relating to procedures.