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Keys to a Successful Lean Transformation

Thursday, May 19th, 2011 : 0 Comments

I was fortunate to hear Shaw Gilmer, Director of Global Planning, Energy & Sustainability at CP Kelco, at the ARC World Industry Forum in Orlando.

Gilmer spoke of the lean transformation his organization has experienced over the past few years – and he shared a few keys to success.

CP Kelco asks the same question as every other manufacturer: How do we maximize earnings by profitably growing a differentiated product portfolio while managing investments in an already asset intensive business? Essentially, how do we improve our Return on Capital Employed (ROCE)?

Shaw confirmed what I’ve thought for a long time, whole-system thinking is the foundation for success. Don’t think about just your plant, think about the entire system.

As part of their lean transformation, CP Kelco moved to a demand driven process – implementing pull. They started with one plant in Denmark, then expanded to plants in the Unites States, and now are expanding across their global manufacturing network.

They found that the typical lean tools from the automotive industry, like Kanban cards, were not the right fit. Instead, they used data from their Enterprise Resource Planning (ERP) system to implement electronic pull signals more suitable to their high-mix manufacturing environment. They published these signals in easy-to-understand web pages on their Intranet, providing clear visibility on customer needs and inventory positions.

Another important point made by Shaw, was that it is not critical to hit the perfect inventory levels at first. The better approach is to set inventory caps, establish new levels, and make adjustments as needed. As other continuous improvement projects produce results, the inventory levels can be dialed down.

Posted by Tom Knight

Disclosure: CP Kelco is an Invistics customer.

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