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It seems fitting that a company that provides storage and workplace solutions for business and industry – and whose motto is “making workspace work” – should embark on an innovative lean manufacturing program to drive waste out of its own manufacturing processes, resulting in top-quality, competitively priced products, delivered in the shortest time possible. And it is even more fitting that the company would turn to its own products to make the move to lean an especially successful one.
“Our goal as an organization is to delight the customer with all aspects of our products and service,” says Peter Lariviere, president of Lista International Corporation. “We achieve this through the elimination of costly waste and the implementation of standard work throughout every aspect of the organization, from quoting an order to receipt of payment. Our goal is to provide our customers with moments of excellence throughout our value stream. We strive to be best in industry, in terms of quality, breadth and flexibility of product line, and lead time. Integrating the use of Lista products into our processes has resulted in significant progress in achieving our objectives.”
Lista International, an ISO 9001 certified company, is one of North America’s leading manufacturers of storage and workspace systems. Established in 1968 in Holliston, Mass., the corporate headquarters houses a 225,000-square-foot manufacturing facility, as well as design and engineering offices. Lista North America is part of Swiss-based Lista Group, a leader in the manufacture of modular drawer storage systems, workbenches and storage solutions for a wide range of markets and applications. Lista Group employs more than 600 people worldwide.
A Lean Philosophy
Lista’s goal is to use lean manufacturing concepts to provide customers a broader, improved offering of high-quality, custom-configured products with the shortest turnaround time in the industry. Lista’s emphasis is on driving out complexity to create a highly flexible manufacturing environment. The results are impressive.
The foundation for the lean program began with material flow and process flow improvements made about four years ago. In the last year, Lista has really turned the corner and has steadily reduced its turnaround time from more than two weeks to as little as two to four business days for many popular products. Along the way, they’ve moved work centers close together, eliminated travel in the process line, and significantly eliminated waste throughout their delivery system. The company has been able to reduce its inventory by more than 35 percent, while at the same time reducing lead times and improving customer service. Overall, Lista has realized greatly increased productivity and efficiency, and reduced its requirements for floor space.
“We made fundamental changes in the order and delivery system and the manner in which we drive customer orders through our production process with demand replenishment concepts and principles. Kanban is a major component of our manufacturing process, and Lista products are ideal for the application of the kanban systems,” said Lariviere. “We’ve always had fully customizable solutions in our standard two-week delivery program, and now we have customizable products in our Lista Xpress two- to four-day turnaround express delivery program. Lean manufacturing allows us to extend our capabilities – to expand what we can provide to customers in the shortest lead time possible.”
Lean Manufacturing Toolkit
Lean manufacturing uses a set of tools that assist in the identification and steady elimination of waste. Among the ones Lista uses are value stream mapping, the 5-S workplace organization and housekeeping system (sort, set in place, shine, standardize, sustain), and a kanban order and inventory withdrawal system.
“We are always looking internally to reduce non-value added process and movement time,” said Aaron Tessitore, director of operations, who says that lean methods enabled the Xpress delivery offering to consist of configured, built-to-order products rather than off-the-shelf stocked products. “Lista shares the same types of concerns as its customers, such as reducing inventory, consolidating facilities, minimizing floor space, and increasing cash flow. A welcome by-product has been waste elimination and cost reduction.”
Storage Company, Store Thyself
One of the interesting features about this particular lean manufacturing process is that Lista uses its own product line to help implement the results of the value stream mapping, the 5-S and the kanban setup. Lista products are now totally integrated into its manufacturing process.
“When you think about it,” says John Grover, director of lean manufacturing, “it’s like the reverse of the old saying that the cobbler’s children have no shoes. In our case, as an industrial storage company, we had access to a product line that helped us implement waste elimination through space reduction, organization improvement and inventory management. Lista storage cabinets and workbench products are designed to allow dense storage and a smaller footprint. From a material flow standpoint, the Lista flexible workbench line and modular tables made it very easy to add flexibility to the production lines that facilitated faster turnaround time.”
In fact, Lista has long been a solutions provider for lean manufacturers, whether the company needs high-density storage or a highly flexible line of workbench products. The 5-S principles are a capsule description of the leading features of the company’s products: highly organized (sort), ideal for tracking inventory (set in place), aesthetically pleasing and easily kept clean (shine), modular in design (standardize) and scalable (sustain).
The system is set up so everything has a place that is available when needed, from the finished goods area where products are being packaged, through the equipment maintenance area. Everything is labeled and identified using Lista’s built-in labeling and identification features, making a 5-S system that is very flexible for whatever the organizational needs may be. Local storage minimizes travel time, and adjustable storage and workbenches make it easier to adapt to the differing needs of individual employees.
Lean Manufacturing Benefits Customers
Although lean is sometimes thought of as the ultimate cost-cutting program, Lista’s program focused more on customer benefits. “All the work we did in our program took aim at compressing the cycle time, which gives our customers added flexibility and minimizes the lead time for our product line, which gives us a competitive advantage in the market,” said Tessitore.
The company is also able to roll out an improved Xpress delivery program offering, with a much more flexible and configurable product, all with a two- to four-day shipping time. Before, because Xpress program products were pre-built and stocked in a warehouse, it was not possible to change anything about an Xpress product to respond to a specific need. The new lean process gives Lista more flexibility in delivering virtually the same turnaround with a much more customizable product that is exactly what the customer wants, not just “pretty much” what the customer wants.
Higher quality is also a result of this effort. Fewer components are being made on a job-by-job basis and there are fewer components to deal with during final assembly. This significantly reduces the potential for short shipments and/or mistakes.
Value Stream Mapping – Driving Waste out of Delivery
Lista used value stream mapping to analyze the material, process and information flow used to drive customer requirements and satisfaction goals across the organization. The information was used to develop a current state map, which sets out how things were done. The firm then used a cross-functional team to analyze the current state map to identify opportunities for waste elimination. Finally, the team envisioned a future state based on the exercise. Lista employees at all levels were deeply involved in the value stream mapping and remain involved in the implementation, which gives the organization access to the best thinking and input.
Lista then began work on implementing the future state. The process is iterative; the future state becomes the current state, and Lista uses a continuous improvement process to go back and identify new ways to reduce waste. Waste is defined very broadly, and includes things like waste in the movement of material, carrying too much inventory, defects or rework, or producing scrap.
One concrete outcome was the elimination of the need for the company’s 17,000-square-foot finished goods inventory warehouse. Since moving toward a build-to-order Xpress system, Lista no longer needs to stock finished goods and has been able to eliminate the warehouse requirement.
Kanban – Stocking/Replenishing System Cuts Overstock
Another key step that drove turnaround times down to the two- to four-day shipping window for Xpress products was the institution of a kanban system, an inventory replenishment system for just-in-time production.
The system calls for a careful analysis of the manufacturing process, which determined that fabrication of the steel parts prior to being powder coated took the greatest amount of time. Rather than basing manufacturing on customer orders, the new kanban system is directed by usage models, which ensures that just enough stock is ready to paint and assemble to fulfill customer orders. This means Lista no longer has to keep finished goods inventory in stock, but always has material ready to paint and assemble to order.
Lista’s kanban system uses a visual board set up with all the parts listed for a particular work center. Signals are loaded based on consumption, and the operator can see the rate at which parts are being consumed. The entire manufacturing activities are the result of a visual-based demand replenishment system. Operators can see how fast the parts they manufacture are being consumed and can react quickly and decisively to ensure customer requirements are met. The system empowers employees, and allows them to fulfill needs in real time, rather than making products in a sequence which is based on paper-intensive material requirements planning (MRP) documents.
The kanban system is used to streamline production for Lista’s high-volume, repetitive-demand products, primarily the company’s most popular workbenches and cabinets. This is about 80 to 85 percent of the company’s output.
“It’s a shift in a way of looking at the process,” says Grover. “This is what is meant by lean – not just eliminating waste in the process, but doing things that are required to add value to the customers, at the lowest cost point in the process and earliest phases. Lean manufacturing pulls all these pieces together, giving you the toolkit, mind-set and the methodology to keep working at a continuous improvement process in an extremely effective manner.”