Lean 360 in the Eyeglasses Lens Sector

Lean 360 in the Eyeglasses Lens Sector

A clearer focus on value enhancement

Background

Estimated to be worth around 29 billion dollars per annum, the eyeglasses lens market comprises three main segments: single vision lenses (correct eyesight for either shortsightedness or long-sightedness), bifocals and multifocals. A staggering billion lenses are sold globally every year. Statistics show that about 4 billion people worldwide require vision correction, while only about 1.6 billion of them already own a pair of glasses, indicating a high growth potential.

The market share of multifocals is on the rise, due mainly to the rise in the standard of living, greater aesthetic awareness and the increase in the older population worldwide. The continual development of the market is driven mainly by the increase in the population over 45 years of age, most of whom are characterized by presbyopia, a natural condition in which the eyesight of the elderly gradually weakens.

In the competitive world of spectacles, the delivery lead time to the optometrist stores is a critical parameter in the customer’s satisfaction – both for the optometrist and the patients themselves. Nowadays the average lead time for a pair of glasses is between 4 and 8 days (the manufacture lead time varies by lens type and complexity). Clearly, a company which will be able to consistently deliver lenses to the optometrist store within 2 days or less will achieve a considerable competitive advantage.

So how can Lean help us shorten the lead time?

The Lean approach is a way of working which focuses all resources on performing the minimum of those specific value-added tasks which achieve what the customers want (value), when they want it and at the cost and the quality they expect.

Over the last 30 years, thousands of companies worldwide have been assimilating the Lean method. Implementation of Lean is extremely effective toward shortening lead times, since it focuses on activities which yield value to the customer and significantly reduce those factors which delay the material flow, such as in process inventory or overproduction.

However, Tefen’s research done recently, shows that merely 40% of the Lean transformations around the world truly succeed in achieving a Lean culture of continuous improvement. The main reason for that is insufficient emphasis on the corporate culture and on building intraorganizational capability to lead processes of continuous improvement. In other words, these projects focus mostly on Lean tools and methodologies implementation and give very little attention to building employees skills and training and for enhancing change management processes to achieve employees buy-in.

To close this gap, Tefen has developed its own lean method – a holistic approach known as Lean 360.

This approach is based on 4 work streams all of which are handled in parallel:

Lean 360 approach

Tools and methodologies:
1. Assimilation of Lean – 6 Sigma tools and methodologies
2. Optimization of the organization’s resources
3. Reduction of quality and waste losses
4. Improvement of material and information flow
5. Improvement of inventory planning and management processes

Culture Re-Design & Capabilities Building
1. Management of change and formation of corporate culture together with executive staff and the entire workforce
2. Creation of a common language and building capabilities throughout the workforce while assimilating a culture of excellence and continuous improvement
3. Provision of tools and knowledge, training of managers, change leaders and specialist leaders

Management infrastructure
1. Assimilation of performance management routines and cross-organizational communication processes
2. Setting up a system for ongoing performance measurement and evaluation

Value Stream Management
1. Adaptation of the organizational structure to the operational needs and processes
2. Focus on building an effective operational synergy among all units within the value chain

The Lean 360 approach formed the basis for the following case study, aimed at dramatically improving the customer delivery lead times.

Case study

One of the leading companies in the lens market forecasted a substantial growth in the worldwide demand, requiring preparations for a considerable growth in output.
The company also wanted to position itself as a top level service provider, while retaining a high standard of product quality.

Tefen was requested to assimilate the Lean 360 method in the company’s labs worldwide, in an effort to improve the product quality, service level, and output, while also enhancing employee skills and developing a continuous improvement process for the various processes within the company.

The project runtime was about six months and covered three stages:

  • Diagnostics – identification of the status quo and potential opportunities
  • Planning – analysis of the findings and construction of a plan for assimilation of improvements
  • Implementation – in which quick wins were assimilated first
    Project stages

Diagnostics

This stage aimed to identify improvement opportunities in the four Lean 360 work streams. To gain an in-depth understanding of the company conduct and to achieve maximum cooperation, about 20 employees were divided into work groups with a detailed work plan down to the daily level. These work groups included staff and managers from all departments, who underwent training in Lean- 6 Sigma methodologies. The training was delivered at this early stage in order to build up their ability to lead similar processes, end-to-end, in the future.

Results: gaps in flow of materials and information; weak performance management.

A wide-ranging attitude survey, which was distributed to all employees, showed that staff felt the widest gaps existed in the flow of material and information, performance management and continuous improvement.

gaps in flow of materials and information; weak performance management

These results were supported by interviews, observations and measurements, showing a 20% ratio between the process time and the lead time and a high variance in the lead time.

Additional findings
1. A high level of in-process inventory, increasing the lead time
2. Imbalance in the production line – in some of the stations, the cycle time was higher than the takt and in some stations, the opposite (as can be seen in the chart)
3. Inadequate management of machines and OEE (Overall Equipment Effectiveness) – long wait times for materials at most of the machines, lack of real-time production stoppage documentation and structured processes for analyzing the production losses
4. The efficiency of the workforce was not optimal – there was a high proportion of Non Value Added activities. This finding was mainly due to the imbalance in the work between the stations, a large amount of manual movement of materials and a non-optimized layout, which did not support lean material flow
5. High percentage of rejects (more than 5%) – analysis of the data indicated that about 50% of the rejects were the result of superfluous hand contact with the lens, which could be partially prevented by reducing the amount of manual handling and streamlining the material flow
6. Non-optimized maintenance management:

a. Only some of the machines had a preventive maintenance program
b. Most of the malfunctions were not documented
c. Line employees had very limited knowledge of how to handle machine malfunctions and on how to carry out preventive maintenance

The analysis of managerial infrastructure found a nonstructured set of KPIs and a very poor level of management routines for monitoring the performance at the daily, weekly and periodic level.

Line balancing chart

Designing the future

At this stage we wanted to take advantage of all of the opportunities for improvement which were found in the diagnostics stage. In order to achieve a high level of involvement among the factory staff, a change management team was set up (see "How are people guided along the Lean way?"). Training was also delivered on Lean methodologies and tools in order to gain buy-in of the employees. In addition, Lean leaders were identified and trained so as to continue the improvement processes after completion of the project.

Team

The planning work was carried out within the teams, with the whole team building an implementation work plan based on the A3 methodology.

The following tools and methodology activities were carried out:

Future value stream

This is the main process for bringing about the improvement and achieving the set goals in a bid to improve efficiency and reduce the lead time. A future process mapof the production line was prepared, indicating potential areas for improvement, according to the calculated desired takt time. In addition, many improvements were included in the flow of materials along the production line, the inventory levels were drastically reduced and activities were merged to to achieve line balancing.Improvements design in maintenance focused on 2 main elements – enhancing autonomous maintenance and improving measurement and control infrastructure. A list of malfunctions that may potentially be solved by the operator was prepared and a cross training plan was designed accordingly. Line stoppages and malfunctions were documented and OEE was analyzed per each machine.Furthermore, management routines and KPIs for the maintenance department were defined.Specification of an overall KPI systemEach measured system necessitates a trade-off between the cost, quality, service level and the organization’s continuous improvement. A balanced system will achieve a spatial perspective of the organization’s needs, rather than those of each function separately. For this purpose, a set of KPIs was defined (for each of the four areas on the balance scorecard in the diagram).

 the balance scorecard

An initial specification of the indices was performed for each area, including the measurement method for each index. The following example illustrates some of these indices:

  • Quality indices – Compliance: % failure, % repeated work
  • Cost indices: Conversion Cost, OEE
  • Continuous improvement indices: suggestions for improvement, building capabilities
  • Customer indices: production lead time, customer complaints

Specification of management routines
One of the most promising opportunities identified during the diagnostics stage was the lack of management routines. To solve this problem, management routines were defined, including shift change dialog, production losses dialog, bi-weekly quality dialog etc.

Visual management
Various visual boards and screens were installed in the different departments. These boards showed mainly comparisons between the performance of the different shifts and records breaking.

Implementation:

During the implementation stage, the work teams and the change agents worked parallel to one another in the different channels, continuing the advertising and communication of successful activities.

Many of the changes and improvements were introduced during the planning stage. The following changes and improvements were added to these:

Line balancing and flow improvement
This was the main improvement to be assimilated in the production line. Primarily developed as a result of improvements to the methods on the line, it has helped to dramatically reduce the inventories at the various stations along the line and implement tools for controlling the in-process inventory levels. In addition, well-defined workstations were created (replacing the “everybody does everything”) and standardized work assimilated. These changes, in addition to reduction of the handling (transfers, routing and unnecessary and/or redundant manual actions), lead to a considerable reduction of Non Value Added work resulting in a reduction in lead time.

TPM
As a continuation of the previous stage, a weekly, monthly and yearly maintenance plan was devised for all of the machines, with monitoring on check-list forms. Additionally, through training and knowledge transfer to staff, autonomous maintenance was assimilated to empower the machine operators and to reduce dependence on the maintenance department.

Management routines and KPIs
After specifying the management routines and KPIs, data collection began and the KPIs were communicated on a weekly and monthly basis in the respective routines.

The monitoring and control of the OEE also picked up momentum, especially where the OEE performance charts were posted every week on the production line notice boards.

The weekly production losses dialog supported the continuous improvement process by identifying Pareto malfunctions which were responsible for the most significant losses.

The implementation of the KPIs also deepened in the production line: performance was communicated on the whiteboard in each department on the production floor, on an hourly level, and supporting management routines at shift changeovers were implemented.

Some additional issues which were addressed included:

  • Reduction in lead time variance through production planning work on a FIFO basis and reduction of rejected waste
  • Layout improvement
  • Reduction of waste and improvement of in-process quality
  • Measurement and analysis of manpower efficiency

Results

Lead Time

To the end of additional benefits included Creation of a real infrastructure for continual improvement through Lean leaders within the organization Assimilation of a management and operational approach of continuous improvement Enriching staff understanding of Lean-6 Sigma tools

Summary

LEAN 360 platform is designed for implementing management infrastructure and continuous improvement culture for obtaining business objectives, while achieving significant improvement in customer and employees satisfaction.

Tefen’s Lean 360 platform optimally combines processes of culture change, capabilities building and implementation of proven and effective tools and methodologies of Lean-Six-Sigma to create a real continuous improvement environment.

The Key Success Factors for a well-established Lean 360 transformation are:

  • Management commitment and involvement
  • Buy in from organization employees
  • Tight support in the initial stages of the implementation
  • Well-designed change management process and tools
  • Robust management routines and KPIs and ensuring sustainability of those routines

By: Rotem Greener, Director, Tefen IL
Lior Ben Ari, Consultant, Tefen IL

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