- European Regions for Innovative Productivity

Applying Lean Practices in SMEs:A ”Bitesize” Methodology

Daryl PowellNewcastle University Business School24th November 2011

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The transnational network

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• Participants from 6 countries in the North-Sea region: UK, Norway, Sweden, Germany, Netherlands, Belgium

• Dissemination to Baltic-Sea region

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ERIP Transnational Network

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC UK

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Norway

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Sweden

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Germany

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Holland

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Belgium

Why SMEs?

Although SMEs are the backbone of the EU economy, few are fulfilling their potential in terms of productivity and innovation:

• No widespread successful adoption of lean manufacturing • Limited understanding of lean practices at every level within

the organisation, resulting in a failure to embed the concept.

S1Pre-Diagnostic

S2Diagnostic

Diagnose: - Focus areas & problems - PNA - VSM- Organise improvement team- Management & team expectations - Assessment of necessary Lean knowledge &

current status

M1Measurement

1) Not Right First Time2) Stock Turns3) Value added per Person4) Lead time5) Schedule achievement6) Overall Equipment Effectiveness- Lean Production

Workshop- Lean Management

training

S3Workshop

S4Yearly action

plan

- Goals from S2: diagnose in a timetable for 1-1,5 year

- 2-3 improvement cycles- 1-3 months per event

Cc1 t/m Cc6Improvement

cycles

Cc1: Problem identificationCc2: Lean basicsCc3: DiagnosticCc4: WorkshopCc5: Follow upCc6: ReviewM2 : Measurement

S6Final

presentation

M2HalfwayMeasure

M3Final

Measure

Cc1 t/m Cc6Improvement

cycles

Cc1 t/m Cc6Improvement

cycles

Cc1 t/m Cc6Improvement

cycles

The ERIP Methodology

The ERIP “Showcase” Methodology

The “Showcase” Methodology essentially consists of 3 stages:

Diagnostic

Pre-Diagnostic

Workshop

The ”Showcase” Methodology

The Original ERIP ”Showcase” Methodology identified 3 stages:• 1-day Pre-diagnostic• 3-day Diagnostic Event• 5-day Workshop

In Norway, this was problematic during recruitment of SMEs, as it was ”impossible” for the SME to free up resources for the 3-day and 5-day blocks.

A ”Bitesize” approach was required…

Pre-diagnostic• A semi structured “Productivity Needs Analysis” interview of

the management team yields an assessment of the operational excellence of the SME

• Management expectations are considered (if there are any immediately important areas for focus)

0,5 days

Diagnostic• Aims to achieve buy-in and involvement from the SME core

team who will be working on the improvement cycles• Teaching points focus on indentifying 7 wastes and Value added

and non-value added activities• Considers 6 core ERIP measures• Creation of Current-state VSM• Poorest results will become the focus for the workshop

0,5 days 1 day 1 day

Workshop• Uses Plan-Do-Check-Act (PDCA) cycle to focus on improving the

poorest of the measures / problem area from VSM• Creation of future-state VSM• Teach points focus on lean tools to identify the areas for

improvement and to countermeasure the problems

0,5 day

1 day 1 day 1 day 1 day 1 day ++

NorwegianIPC structure

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IPC Norway

SINTEF

SMEs

Exemplar companies

IPCs in other countries

Norwegian Networks

NTNU

NorwegianIPC structure

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Teeness

Benteler

Hagen

Norplasta

SMART-LOG

NCEI

CTM Lyng

Noca

IPC Norway

SINTEF

SMEs

Exemplar companies

IPCs in other countries

Norwegian Networks

NTNU

Our distinctive character• The SINTEF Group is Scandinavia's largest independent research institution, with

international top level expertise in several areas of research. SINTEF has over 2000 employees from 68 countries

• SINTEF cooperate closely with industry, universities and authorities, and have a combined research and business culture.

Our vision• “Technology for a better society”

Our role• Create value through research and innovation, and offer concrete solutions for

sustainable development

• SINTEF creates value through knowledge, research and innovation, and develop concrete solutions for sustainable development

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Based in Trondheim, Norway

Related project activities in SINTEF:NCEI Lean

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”To increase the competitiveness of the partners by more efficient production through employing tailored techniques from lean manufacturing and positive change in company culture towards continuous improvement”

Goal:

• Collaboration project between 4 companies (Kongsberg Maritime, Noca, Roxar and Fugro Oceanor and 2 competence partners (SINTEF, HiST)

Department of Production and Quality Engineering (IPK)

- Works on the point of intersection between technology and management, with issues tied to operations, industrialization and production, along with quality and safety.

- Three primary research groups covering Production Systems; Production Management; and Reliability, Availability, Maintainability and Safety (RAMS).

- Relevant further education programme in Lean Manufacturing

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- Number of employees: 2,600- Number of students enrolled: approximately 20,000

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Teeness

Benteler

Hagen

Norplasta

SMART-LOG

NCEI

CTM Lyng

Noca

IPC Norway

SINTEF

SMEs

Exemplar companies

IPCs in other countries

Norwegian Networks

NTNU

Exemplar companies

Exemplar company: Teeness

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Produce Machining Tools Not ”The Factory” – but ”The School” Own Philosophy: 5M 1. Man

2. Machine

3. Methods

4. Material

5. Milieu (environment)

Exemplar company: Benteler Automotive

- Turnover (2010), - MNOK- 460 employees - producer of aluminium bumper beams and crash protection systems

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Continiuous flowFlexibility

Process stabilityIncreased capacityContiniuous improvementsCompany wide quality

Team organisationWaste reductionSafe healthy workplaceVisual factory

- Just in Time production

- Production Scheduling

- Supplier development

Just in Time ProductionReduced costsIncreased Profit

- Team organisation- Coaching and leadership- HES- 5S and workplace organisation- Value Stream Mapping- Standardised work

- H2C- HAPS Roadmap- Self Assessment- Benchmarking

Current stateNeed for changeMotivationAlignmentVision

- TPM- SMED- Mistake proofing- Continiuous improvement

Goals

Tools /Techniques

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Teeness

Benteler

Hagen

Norplasta

SMART-LOG

NCEI

CTM Lyng

Noca

IPC Norway

SINTEF

SMEs

Exemplar companies

IPCs in other countries

Norwegian Networks

NTNU

Methodology and SME test companies

SME test company: Noca

What we did:• Value Stream mapping• 5S activity• SMED Workshop

Results• Lean steering group created with an identified lean champion and 5 change agents

on the shopfloor• Improvement in visual management due to 5S activity – toolboards etc.• Visual management will continue with creation of performance dashboards.• SMED activity planned for 2nd quarter 2011.

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- Turnover (2010), Approx 90 MNOK- 50 employees - Producer of printed circuit boards and electronic products

SME test company: Hagen

What we did:• Automating the production by use of modern technology: CNC-

machine, Robot, Internal transport, RFID, Shop floor system• Started the process of planning for 5S implementation projects in

2011

Results• Building the technological foundation for Lean production• Fully implementing the invested production line in Q1 2011• Further testing of Lean techniques

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- Turnover approx 100 MNOK (2010), 98 employees - Producer of staircases- 90% to professional house builders, 5% export (mainly to Sweden)

SME test company: ASTI

What we did:• Diagnostic activity• 6 ERIP Measures• Value Stream mapping

Results• ASTI are currently designing future-state VSM and collecting data Re. 6 measures

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- Turnover (2009), Approx 56 MNOK- 50 employees - Producer of printed circuit boards

and electronic products

SME test company: Norplasta

Experience with Lean• 5S started as a project mid-August 2010, will be implemented by May 2011

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- Turnover (2010), 88 MNOK, 68 employees (average age = 49 years old)- Producer of moulded plastic boxes, trays, and food packaging (50% to food industry)- Injection moulding, and branding with hot stamp or inmould labelling (IML)

ERIP• Selected a focus area: Factory 2, Machine 132• Analysis of data shows that machine downtime is an

area for improvement• Downtime due to Repair of tooling was the focus area• Tool 3003 became the priority tool• Detailed description of tooling issues will be recorded

throughout the next two months

SME test company: CTM Lyng

What we did:• Pre-diagnostic• Walking the process• Lean philosophy

Further work• Analyse value streams• Implementing 5 S in selected sections

of the production lines

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- Turnover approx 58 Mill NOK (2009), - 45 employees - Producer of electronic circut boards for Smart House Control Systems

Alvin Berg CEO, Ståle Sund, production manager and Daryl Powell, NTNU & SINTEF

Some results…

Experiences and concluding remarks• Collaborate with others – other people have similar issues.

– Sharing experiences, challenges and solutions with other companies have proved useful – different industries, but similar challenges

• Use sufficient time for the staring up the process– As the groups have gotten to know each other: trust among participants have

increased, better discussions• Have some form of external pressure for

internal improvement programmes– If not, it is harder to maintain steam and

momentum in the process• Learn it, don’t buy it

– Build the competence of you staff. If not, it is harder to sustain a Lean organisation with continuous improvements

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ERIP Transnational Network

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC UK

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Norway

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Sweden

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Germany

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Holland

Exemplar Company

Delivery Partners

SME

SME

SME

SME

Academic Partners

Regional Development

AgencyIPC Belgium

PhD Research Project: ERP Support for lean production

• Exploratory Case studies

• Action Research (Norway)– Simultaneous implementation of ERP

and lean principles

• Multiple Case Study (Netherlands)– ERP support for pull production in SMEs

Questions or comments?

Daryl Powell (Research Associate & PhD Candidate),ERIP Project Coordinator, Norway

E-mail: daryl.j.powell@ntnu.noPhone: +47 73 59 39 83

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