Goodwill Has Turned To Lean Manufacturing

May 20, 2002
| By Katy Rent |
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GRAND RAPIDS — In reviewing its warehousing development and execution last year, Goodwill Industries realized something wasn’t working.

“We knew we had a lot of waste and that we were taking up more time than we needed to,” said Gary Graham, vice president of operations.

“So the only thing to do was to make a change, and that is when we became involved in the Kaizen event. In its simplest terms, lean manufacturing is a war on waste — all kinds of waste. It’s eliminating waste, making everything as close to one-piece production; it’s cellulization, it’s visual management — different things.”

After determining what had to be done, the only question left was where to start. The two areas of importance to Graham and his team were the workforce and the production in the warehouse.

Back in August of last year, Tina Hartley, president of Goodwill, and Graham got together and knew they had to make a more efficient processing plant.

“Number one, because the more efficient our plant becomes, the more efficient our stores become, the more money we make, the more people we can serve — because all the money from our retail stores goes into the job placement and the other things that we do,” Graham said.

When lean manufacturing was decided upon, Graham brought in a specialist, Rick Fleming, of Continuous Improvement Associates.

Fleming customized his presentation to what was done in the warehouse and also demonstrated that lean “manufacturing” doesn’t just apply to people on the actual manufacturing floor.

From there, Graham and Hartley decided to proceed with the program and train Goodwill’s employees to utilize lean practice in everyday work.

“Usually what they do in one of these events is put a team together and say ‘Here are the tools of lean. Now go do it.’ Well, that is like giving you some bricks, mortar and shingles and saying ‘Go build a house,’” Graham said.

“It’s not going to happen, and if it does happen it isn’t going to be something you want to talk about.”

For this reason a common “lean” vocabulary had to be created. Then the six tools of “lean” were incorporated until everyone involved knew what was going to happen. Next was the process of choosing teams to create a new warehouse flow, and how to choose those teams was Graham’s next challenge.

“We decided that we were going to train two people throughout the company. We had two more workshops, and we chose key people throughout the company, mostly management and supervisors, except my people on the floor that had already been trained in the first session — we trained 54 people in total,” Graham explained.

The 54 people were then arranged in four groups so as to entertain more ideas from everyone. Each team was comprised of people from all levels of management.

“Teaming was critical because one of the biggest problems I had noticed was that you would get bogged down and someone would say, ‘You have to move this 20-ton press from here to there, can we do that?’ ‘I don’t know. We have to go ask. We have to go up the ladder of command,’ and that is part of the key part of having your executive management involved, so when you go up that ladder to ask, they are aware and they are involved… Otherwise you could go back and forth for hours or even days,” said Graham.

When employees came back to work on Tuesday after having been gone since Thursday, they had no idea what they would find. Every employee possessed the tools to be able to complete his or her job but didn’t know exactly what the job would be.

In the warehouse, Goodwill went from 30 job descriptions down to 10 or so.

After each 15-minute break throughout the day, teams met and discussed what was wrong, what worked and what concerns they faced. Every concern was written down and dealt with, and this went on for three weeks. Now teams hold weekly meetings and when asked about concerns, no hands are raised.

When it came to creating workstations, teams were made up of a 50-50 mix of people from the warehouse and people from elsewhere in the agency.

Each team was given the tools of lean, and the general process and needs of the warehouse, then told to create a workstation. Over the four days teams were mixed and matched, and in the end one team came out completely made of people from throughout the agency — not a single one was from the warehouse.

Still, each team created almost identical workstations. From there, all that was needed was some refinement to reach what is in practice today.

“And it works,” said Graham. “Our numbers match that and we are so happy with what our staff has developed.”

After taking 50,000 square feet of space and making it “lean,” he says Goodwill now shows improvements. It is, for instance, producing 172 percent of last December’s production with 18.5 percent less payroll cost and in 10,000 square feet less space.

Too, he said, the defect rate has dropped from over 12 percent to less than 2 percent.

“This event is never done to reduce workforce, because in order for it to work you need total employee involvement,” Graham said. “It is done to improve QCRODSM — quality, cost reduction, on-time delivery, safety and morale.”

Seeing good results in its warehouse, Goodwill has decided to take lean manufacturing practices into its stores and into its employment and training facility. Each store’s backroom was re-vamped and customized to fit each special operation, to work in a lean process.

Goodwill also noticed an abundance of waste in its employment and training division in regard to paperwork.

“We looked at all of our paperwork and saw that we had 487 … different fields we had to fill out. We looked at common fields and we are down to about 200 fields now,” said Graham. “We went from where on every piece of paperwork I would have to write your name, social security number, address, my name, etc, to where now you only write it once.”

This trimming down has sped up business, allowed the warehouse to turn out a larger volume of quality products and to keep employees happy, Graham said.

“It is working well. People are happy. You will see them working, they are definitely working hard, but they are enjoying themselves,” he said. “You see a smile on their face and you know the stress level is way down. We made a promise to keep everything the same, but make it better, and when you make a promise, you better keep it. I feel we have done just that.”

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