$240,000 Saved Through Kaizen Events

Overview

This Kenco Logistic Services customer is a major manufacturer in medical technology and medical advancement industry.  Their products help medical professionals improve the lives of their patients. Product is shipped locally, domestically and internationally.

Challenge

The goal was to perfect processes and reduce variation within the warehouse.  In order to accomplish this, Kenco implemented Lean Six Sigma philosophies.  Currently, unit per man hour (UPMH) was at 4.8 and cost per unit (CPU) was at $13.01.  The goal was for UPMH to increase by 17% and CPU to decrease by 32%.

Solution

Lean Six Sigma is a powerful, proven continuous improvement methodology that combines the power and benefits of both Lean and Six Sigma. Lean’s primary focus is the identification and elimination of waste in the value stream while Six Sigma’s primary focus is the identification and reduction in process variability. Inherently, we are simplifying the process with Lean, perfecting the process with Six Sigma and providing innovation with Design for Six Sigma (DFSS).

One of Lean’s most dynamic continuous improvement methodologies is Kaizen, which means change for the good. Kaizen actively involves the people who perform the work each and every day and pushes them to become integral parts of the continuous improvement team. Typical Kaizen events at Kenco last three to five business days and are focused in a particular area of a value stream that has been targeted for waste reduction activities. Kaizen events are scoped in such a way that most improvement ideas can be implemented during the week-long event.

Kaizen events are identified through many different avenues. They include: takt time analysis, schedule attainment analysis, Six Sigma projects, A3 projects, employee suggestion programs and customer interactions. As mentioned above, Kaizen events are an excellent way to involve employees in the continuous improvement process and increase the sites bench-strength. Philosophies and tools used during the kaizen event can vary. However, they include takt time analysis, standard work, 5S+1, walk pattern sheets, Ohno circle exercises’, spaghetti diagrams and line balancing activities.

Results

Over $240,000 has been saved through the completion of seven Kaizen events. This is an average of $34,000 per completed event. A total of 25 hourly associates participated while two led Kaizen events.

Warehouse KPI’s were also positively impacted. UPMH increased by 26% and CPU decreased by 39.4%.

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