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With the current economy putting the squeeze on businesses everywhere,
most companies immediately turn to head count and spending reductions
to lower costs. At Gold Canyon, we took a different approach. We
decided to look at our business processes and eliminate waste, to
streamline our operations and reduce our operating expenditures.
Any company, regardless of how long it has been in business, can benefit from examining its existing operational processes and making certain changes. At Gold Canyon, we found that even the processes we thought were streamlined had potential for improvement.
| Kaizen is a Japanese philosophy that focuses on improving in all aspects of life. |
Our goals were to identify these potential areas for improvement and, most importantly, to eliminate waste. We define “waste” as anything the customer is not willing to pay for. When we evaluate processes, we have to determine the value that process adds to our product and question whether the customer will see that value.
When we set out to improve operational efficiency and reduce waste in our organization, there were several efficiency theories and methods we had heard of; some we had tried in the past. After reviewing these, we decided to use the Kaizen method. We felt that Kaizen would help us to achieve our goals. Having made this decision, we hired a production manager with experience in Kaizen and lean manufacturing.
Kaizen, Japanese for “continuous improvement,” is a Japanese philosophy that focuses on improving in all aspects of life. Translated literally, Kaizen means change (kai) to become good (zen). Although many people consider Kaizen in relation to manufacturing, when applied to the workplace Kaizen activities continually improve all functions of a business. In the past year, we performed 13 Kaizen processes at Gold Canyon. Twelve were in manufacturing, but our 13th was performed in the office on our customer-service process.
There are a series of steps to take each time a Kaizen is completed.
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The objectives we identified for our Kaizen processes involved square-footage reduction goals, aiming to reduce square footage by 50 percent; improvements in production efficiency and head count; inventory reduction; and, as always, waste elimination. We found that it was important to ask ourselves if there were any possibility for improvement at every step of the process.
When identifying head count as an objective, a concern is that employees might be hesitant to participate in the process for fear of job reductions. However, we found that by involving every member of the team in the process, employees felt included in the decisions. We also found that after the first win, team members realized that their jobs were made easier, and they were happy. Through all of our Kaizens, nobody was fired or laid off. Our intention was that employees may be reassigned but not displaced. Natural attrition took care of our reduction goals.
In every Kaizen there may have been one person who would resist the process. But that person would usually turn around after the first or second celebration of success and, eventually, they became a great advocate of the process.
Going through these processes has been exciting for Gold Canyon, as we have seen many changes and improvements. Here are some of our most effective initiatives that have contributed to our improvements in operational efficiency.
First, we designed and developed an automatic wicking machine. Before, we had inserted our wicks manually. The automatic wicking machines available to the industry at the time handled only one-wick insertions. This did not accommodate our unique two-wick products. We worked with several manufacturers in an attempt to retrofit existing machines to handle two-wick insertions, but we were unsuccessful in doing so without slowing down throughput.
We partnered with an
engineering/manufacturing company. With our design already in mind, all
we needed was the know-how to engineer the device in such a way that
would improve our efficiencies. After eight months of development, in
September 2008 our new machine went online just in time for the busy
holiday season. In 2009, we plan to further improve the system
and replicate it one more time.
This new machine has helped with speed, run rates and efficiency. Previously, it took 20 people to insert our wicks in an average production day. Now, we need only nine people over two shifts to handle all our production.
Our second large change was in our new demonstrator kit-production process. Previously, each kit took two hours to produce. Through the Kaizen process, this time was reduced to 20 minutes. The Kaizen process helped us identify ways to modify our work flow by eliminating some of the movement of the kit supplies. We are now “just-in-time” with our new demonstrator kits. We can make and ship all the kits we need the same day they are assembled.
Our third improvement and most impactful improvement was in our pillar production area. We found that even though we were efficient in every step of the process, our work flow was suboptimal. By changing the layout of the department, we were able to keep the flow going forward without double tracking or going backward. We were able to reduce our manufacturing area by 50 percent, which had a tremendous impact on our efficiency. We were also able to reduce our employees’ walking pattern by 50 percent, thus reducing movement and fatigue. With these improvements, we can now produce 17 percent more pillars in one day than we could with our previous work flow.
Finally, we saw improvements in our replenishment process. In our previous process, our candles moved from production, through what we call “Checkpoint Charlie,” to inventory management, where candles were received and put into the bulk area. When product was needed on the pick line, someone would have to go to the bulk area and move that product to the line. Through our Kaizen on this process, we eliminated the bulk area and the excess inventory sitting there, allowing us to adjust our steps so product is taken directly from production to the pick line. With this new process, our productivity in replenishment improved by 70 percent.
Again, Kaizen is a process that can be applied to all areas of an organization. Once we started using this process, we found that almost all initiatives and improvements could be designed better by using Kaizen. Our building expansion gave us 100,000 more square feet of space, which helped us to improve our work flow in many departments. When space is restricted, a common tendency is to move things multiple times to get a job done; this increases labor time as well as energy expended by employees in moving around. By reducing the movement required in processes, we were able to reduce employee fatigue.
When highlighting our operational efficiencies, our list would not be complete without highlighting the improvements we have made in our employee-training efforts. We are investing more resources in our new-hire training. For example, one difficult job is that of the order picker. This employee uses a handheld computer to transact a lot of information. If something is transacted incorrectly, all areas of production are affected. Previously, this position had a one- to three-day training process, primarily shadowing another picker. With our new training curriculum, this position now receives two weeks of paid training. We found that by empowering our employees with the knowledge and information necessary for their position, they were more accurate and seemed to enjoy their jobs more. The biggest benefit we have seen from our training programs is an increase in our employee-retention rate. In our pickers, we used to lose 50 percent of our new employees; now we lose only 15 to 20 percent.
Looking back at 2008, we are impressed with the operational improvements we
have made. In 2009, we will continue to review all areas of our
operation, always looking for potential areas of improvement. Gold
Canyon will continue to improve training initiatives and will be moving
more toward curriculum-based instruction that uses training software.
This will allow us to
test employees on the information they
learn, giving us better visibility and awareness of our resources and
allowing us to more efficiently allocate resources. Our next big focus
will be to move Kaizen into the office to evaluate and improve those
processes.
Following the definition of Kaizen—continuous improvement—we are always evaluating, always looking for improvements and always willing to implement change. This philosophy will allow us to continue as a strong company that produces “The World’s Finest” products. DSN
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Curt Waisath is President and CEO of Gold Canyon. |
