Labs Go Lean
Posted Apr 28, 2011 in Management
What do some large laboratories have in common with Toyota, the world's top auto seller? They are implementing the same production principles—Lean Manufacturing—that Toyota developed 60 years ago to eliminate production waste, achieve quality, streamline workflow, reduce turnaround times, and ultimately become more competitive. Here, laboratory owners share their experiences with Lean Manufacturing and reveal how going Lean can make your laboratory work like a well-oiled machine.
Lean Manufacturing is a management philosophy based on the successful production system developed nearly 60 years ago by the Toyota Motor Corp. The concept gained popularity in the early '80s, when struggling U.S. businesses practicing traditional manufacturing methods began looking for ways to improve their operations to compete in a rapidly changing global marketplace.
Likewise, in the past several years, innovative laboratory owners who recognize the value of streamlining operations have begun turning to Lean Manufacturing principles to standardize procedures and enhance the value of their product. "We're manufacturers; 70 to 80% of the crown and bridge casework we do in the laboratory goes through the same process steps. Lean can help labs achieve quality, streamline workflow and, ultimately, become more profitable and competitive," says Nan Boyd, CDT, process manager at 40-person Derby Dental Laboratory in Louisville, Kentucky.
Although Lean Manufacturing is a wide-ranging philosophy built around five interrelated principles, what it boils down to is taking a comprehensive look at your processes with an eye toward eliminating waste and maximizing value. "Processes include everything that is done to a case from pick up to delivery; waste could include wasted time, materials, labor, space, etc. Anything that doesn't add value to the final product is waste," says Jim Bauer, CDT, general manager of 120-employee Edmonds Dental Prosthetics, Inc., in Springfield, Missouri.
Get everyone involved
As with any major management shift, the first step to implementing Lean principles is to get everyone on board; it can't just be a top-down management strategy. "For Lean to work, everyone in the lab has to start talking to each other. This approach makes sense because employees often know better than management which processes are unnecessary and which could be done differently or better," says Bob Long, lab trade relations manager at Whip Mix Corp. The company developed Lean Advantage™, a program created specifically to teach labs Lean theory and help them implement it (see below).
One way of involving staff members is to have them participate in flow charting, which entails defining all the steps in each process of the laboratory. An integral part of Lean Manufacturing, flow charting is an excellent way to begin defining and eliminating waste. For example, through the charting process, Derby's Boyd discovered that incoming prescriptions were being entered into the computer software verbatim and then the department managers would compare the original prescription to the computer-generated work order. If the original prescription was incomplete, they had to update the work order, which was wasting valuable time. Boyd and the case entry staff familiarized themselves with the software's capabilities and she educated the staff about tooth number identification so that prescriptions could be entered completely. "Eliminating these non-value-added steps has allowed our higher-compensated department managers to focus more on production instead of paperwork. By ensuring accurate data entry up front, we've gained two hours of fabrication time a day," says Boyd.
Flow charting also helps distinguish value-added from non-value added activities, which are defined as waste in the Lean philosophy. "A value-added activity is anything customers are willing to pay for because it provides a value to them," explains Don Warden, president of Lord's Dental Studios in Green Bay and DePere, Wisconsin, which employs 160 people. For example, the lab wanted to streamline its dentist-client seminar programs so a team of staff members surveyed dentist-attendees and asked them to rank a variety of factors according to the value they represented. As a result, pre-printed name tags have been replaced with blank name tags that the doctors write their own names on, a less extravagent continental breakfast is now offered, and the invoicing process has been simplified. "When all the changes were made, our seminar costs were reduced by 27%, and over 14 staff hours per seminar were freed up," says Warden.
Establishing good work flow is another key component of Lean. "An enormous amount of waste in our lab could be tied directly to how work flowed--or more correctly, did not flow--through and between our departments," says Bauer. To address this concern, Edmonds installed gravity flow conveyors that use rollers instead of powered belts to transport completed cases between technicians and among departments. Once the technician is done with his fabrication step, he simply puts the case on the conveyor, eliminating the need for moving carts and stocking and organizing shelves. The lab has also installed pass-through windows where walls once separated work areas, making it easier to move large volumes of work into the receiving and scheduling areas.
In some instances, batching cases can improve a lab's work flow. For example, Derby Dental Laboratory used to process each case as soon as it came in. Now, the 80 to 90 units it receives daily are batched according to the type of case. "For example, we send 10 to 12 pans of triple trays for Artimax articulation to the model department at a time since they are all treated the same way," explains Boyd. "Where's the sense in mixing up a bowl of stone for one case?" Using this batching method and Whip Mix's Lean Die Stone, which has an accelerated set time of about 10 minutes, the model department can have 10 to 15 case pans ready for die trimming in about 30 minutes.
Visual management is another aspect of the Lean philosophy, and involves organizing your laboratory so that anything out of order is immediately visible. For example, Chris Cormack, vice president of Midwest operations at Keller Laboratories, Inc., along with the staff of 200 employees, identified and labeled everything in the lab. Work standards are now posted at each production stage and work distribution rules are posted at each point where cases are handed off from one department to another. For example, the cart that moves cases from the metal to opaque department is labeled with the maximum number of units a technician may work on at one time; this helps keep work flowing through the laboratory. They also created a color-coding system so it's easy to detect a case that has fallen behind schedule.
To simplify inventory and purchasing, the lab standardized every department's workstations so that all technicians use the same materials, tools and instruments for each process. It also installed a centrally located, two-bin Kanban system for supply-replenishment in each department; a Kanban system is designed to provide a continuous supply of inventory so that employees have what they need, where and when they need it. Each bin holds two weeks of identical inventory and when the first bin is empty, it is turned upside down, giving the visual signal to the inventory clerk that it needs to be refilled.
When the system was first implemented, inventory that had been stockpiled in the technicians' drawers was used, allowing the lab to forego ordering supplies for several weeks. Now, supplies are more readily accessible, which reduces the need for technicians to store extra materials at their workstations.
"We've streamlined inventory and purchasing, built consistency into the final product--and attained our goal of reducing turnaround time. For example, turnaround time in our fixed department has gone from eight days to four, which in turn is passed on to our clients," says Cormack.
Laboratories that have made a commitment to Lean are taking a comprehensive approach and incorporating the principles into their organizational culture. Lord's Dental Studios hired a local consulting firm, and spent approximately $80,000 over three years to provide formal training in Lean concepts and tools to the entire leadership team. One consultant stayed on for the first year to work directly with Lean project leaders; now a lab manager is responsible for coordinating Lean project ideas and team leadership.
"Our goal culturally is to develop as many Lean leaders as possible by getting everyone in the company to participate in at least one project that focuses on implanting Lean concepts," says Warden. And even though consultants may be needed to get the ball rolling, they cannot be relied upon to run the whole show. "It requires energy and focus on your part. It is not something a consultant can come in and 'do' for you," he says.
Keller Laboratories, Inc. also hired a consulting firm, spending over $100,000 on consulting fees, training and additional equipment which serve as backup units so there's no downtime in production while waiting for machine repairs. "The efficiency gains we saw in production and the reduction in our turnaround time created overall savings that more than paid back our investment," says Cormack. The lab also qualified for R&E Tax Credits* for the consulting services, a federal tax credit covering up to 20% of the cost of research and experimentation activities. "We are now at the point where we rely on outside support much less," he says. We've learned so much from our first attempts that much of the process-improvement work is ingrained as part of what we do."
Whip Mix Corp.: Offering the Lean Advantage™
Whip Mix Corp. was recently honored with the 2006 Lean Manufacturing Award by the Greater Louisville Manufacturing Network. This award acknowledges the company's improved manufacturing procedures, thanks to the successful implementation of Lean Manufacturing principles, a management philosophy that focuses on eliminating waste from all processes within an organization.
Owned and operated by members of the Steinbock family since 1919, the company's Lean journey began about six years ago when the management team was looking for ways to streamline operations in order to become more competitive. Tapping into the expertise of the newly hired Vice President of Manufacturing Jim Myers, who came from the automotive industry, the team decided that Lean Manufacturing would become Whip Mix's modus operandi.
Since Lean principles emphasize a teamwork approach, the management team began a company-wide Lean training program on techniques to identify waste and methods for continuous improvement. "Improvement lies within the minds and efforts of each team member. Over the last six years, our team members have identified savings in excess of $500,000 through waste reduction or productivity improvements," says Myers.
As the company began reaping the rewards of Lean Manufacturing, team members realized they were in the unique position to offer Lean training to their laboratory customers, who were just as likely to benefit from streamlining their manufacturing processes. So they created the Lean Advantage™, a program that includes products and consulting services to help laboratories use the five key Lean principles: value from the customer's view, value stream mapping, flow, pull and perfection; all are concepts that help reduce waste, improve work flow and enhance product value.
Lean Advantage consists of a variety of consulting programs--including Lean Analysis, 5S, Financial Benchmarking, Value Stream Flowcharting, Continuous Improvement Team Training and Workflow Design--tailored to meet the needs of a laboratory. Designed for greater efficiency, the Lean product line includes the AquaSpense dispensers that measure the precise amount of powder and dispense the exact amount of liquid, providing accuracy and predictability of fit; the new Pro 100 porcelain furnace, which has a built-in cooling feature to reduce wait time between firing cycles; and the new Lean Rock die stone that offers better batch control, quicker triple tray processing and allows models to be removed from the impression and processed in as little as 15 minutes.
"While the elimination of waste is paramount to Lean, providing value-added quality to the products is also essential. Now, we've revamped our thinking to be sure our products offer our laboratory customers an improvement or greater efficiency. Lean is really part of the Whip Mix DNA; we practice it and we preach it. We want labs to practice it also and take the principles to their customers as well," says Bob Long, laboratory trade relations manager and Lean consultant.
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