Maintenance as a Profit Center

Implementing a lean system requires leadership and patience.

One of the most important issues facing manufacturers is the need to pay greater attention to maintenance. David Cline, Vice President of Operations, Central Region, for Harland Clarke in Dallas Texas, kicked off the 2011 Manufacturing/Automation Summit sessions with his presentation, "Maintenance as a Profit Center." The primary focus of his presentation was his company’s Lean manufacturing journey, with an emphasis on the relationship between proactive maintenance and lean manufacturing. He said that maintenance is part of the cross-functional team structure, and when everyone works toward the same goal, the entire organization benefits and profits.

Special Paint Equals No Complaints

Cline explained the history of how the John H. Harland Company and Clarke American merged to form the Harland Clarke Holdings Corporation, which is divided into three divisions; Harland Clarke Payments, Harland Financial Solutions, and Scantron. The company is a leading provider of software and services to financial institutions.

Another acquisition that Harland made was Liberty, another check printer that specializes in credit unions. This acquisition triggered what Cline called the company’s "Burning Platform." "We wanted to integrate them into the manufacturing facilities of Harland,” said Cline. "We didn’t have the necessary equipment to do that. We were short of capacity, or we thought we were short of capacity."

The CEO rejected [their] request for capital to invest in additional equipment, [asking managers to instead] figure out how to do a better job with what they had.

Sometimes it takes roadblocks to convince organizations to finally make a change. "That really put our backs against the wall," Cline said. "But it was probably the best thing. It really was our opportunity to look at what was going on. We realized that we weren’t going to be able to purchase the equipment, so we had to move on.”

Harland had already started partnering with a consulting organization to help it on its journey toward Lean and Six Sigma. "Lean" is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Value is defined as any action or process that a customer would be willing to pay for. Six Sigma seeks to improve the quality of the process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. [5] It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Champions” "Black Belts," "Green Belts," "Yellow Belts," etc.) who are experts in the methods. The organization advised Harland that it had a Lean problem and that addressing it would solve the equipment capacity issue.

Harland’s Lean journey had three phases. "After the training, we formed a project team and started a company-wide initiative to solve the equipment capacity problem," said Cline. [This is when] it became evident that we needed to work on 5S. And if any of you have implemented 5S, you know it’s about a lot more than just cleaning." 5S is the name of a workplace organization method that uses a list of five Japanese words: seiri; seiton; seiso, seiketsu and shitsuke. The list describes how to organize a workspace for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. The decision-making process usually comes from a dialogue about standardization, which builds understanding among employees of how they should do the work.

At first, many of the leaders were skeptical [not knowing how cleaning would help solve a capacity problem.] Cline said that implementing 5S is a bit more complicated than just saying you will do it. "We had to execute 53 different Kaizen events to finish the project across the organization." Kaizen is Japanese for improvement or change for the better and refers to philosophy or practices that focus on continuous improvement of processes in manufacturing engineering and business management. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers.

Benefits Emerge
Although the company was just starting on its Lean journey, it was beginning to see benefits. "The results we were starting to see and execute were unbelievable," said Cline. "We had about a 3% gap in equipment capacity [because] we weren’t using it effectively. But we gained 4.5% in this specific area. We solved that bottleneck. Leadership loved the results. We couldn’t get enough of Lean. We were ready to go forward with our Lean journey."

Cline explained that it was maintenance that started doing the 5s. The maintenance team realized that having tools and resources where they need them, when thy need them helps them to reduce downtime. "They were buying into the process and giving us examples of how this was actually working for us," said Cline.

"The best way to create change is to engage the people with whom you’re trying to create [the] change," Cline added. "If you do it for them, they’ll fight you along the way and you’ll never sustain the results. It’s a leadership issue."

Harland continued its Phase 1 with 5s and total productive maintenance (TPM). Part of the company’s TPM efforts was to restore its equipment to as close to new condition as possible. "Maintenance was right there with the leaders and operators," Cline said. "We were doing this together. That really did help us become a much better team along the way."

Phase 2 was the second corporate project that Harland executed across its manufacturing facilities. Cline identified six elements that characterized this effort:

  • Leader Education
  • Value Stream Mapping
  • Standard Work
  • Visual Management (Make it Visual)
  • Water Spider/Kanban System
  • Autonomous Maintenance

It became obvious that Harland needed to reduce work in process (WIP) between process steps. "We realized that all that WIP had become [was] the barrier blinding us from realizing that our equipment was not running as well as it needed to," Cline said. "As we reduced the WIP, we needed to actually count on the equipment running when it was supposed to run. We needed to understand that it wasn’t a maintenance problem, it was a leadership problem.”

Harland’s ultimate goal was adopting the Lean cell concept component of the lean manufacturing process, which became the company’s Phase 3. Cline identified five elements associated with this phase:

  • More Extensive Value-stream Mapping
  • Machine Balance
  • People Balance
  • Engineering
  • Mock-up

Gaining Benefits
Throughout its Lean journey, Harland Clarke achieved some amazing results. "We knew we wanted to work on cycle time," Cline said. "We reduced our cycle time through the cell by 64%. As we implemented the cells along the way, we became much more predictable in getting consistent cycle time through all the elements in working with our people and solving problems and working with maintenance."

Other Results Include:

  • Reducing production footprint by 44%
  • Reducing WIP by 61%
  • Improving plant capacity by 108%
  • Reducing conveyor length by 93%
  • Reducing order travel distance by 80%
  • Improving Machine OEE by 31%
  • Increasing units per hour by 23%

"Equipment reliability drives the success of cells,” said Cline. "But you have to create a different system. You can’t just tell maintenance to do a better job. You have to change the system to capture more kaizen opportunities."

"In trying to create a system for becoming a better team, we also empowered our employees. You have to create a system where people feel empowered.”

"We got some great results," Cline concluded. "We’re still learning as we go, and we know we can do much better, especially as we continue to focus on our equipment reliability."

This article was reprinted and adapted with permission from Plant Engineering.

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