Lantech Incorporated manufactures stretch wrapping machines and bundling systems at its plant in Louisville, Kentucky. Lantech's equipment is used in a variety of markets, including food and beverage, chemical, and health and beauty aids. The company invented the stretch wrap machine in the early 1970s. From 1972 to 1984, it experienced fast growth and high profitability, but by 1992, sales were flat and profitability started to erode. Morale in the factory was low, as manufacturing personnel were constantly bombarded with impossible delivery requests, then blamed when orders shipped late. Inventory was everywhere, yet manufacturing did not have the right parts to complete orders on time. Faced with a threat to continued operations, Lantech began its lean production effort.
Lantech began its reincarnation by training everyone on continuous improvement practices and how to identify and eliminate waste. A four-day program was established for each work area as follows:
- Conceptual training on continuous improvement tools,
- Introduction to lean production concepts, and
- Creation of cross-functional teams.
- Implementation of one-piece flow techniques, and
- Team development of process improvements.
- Hands-on shopfloor improvement,
- Full production under shopfloor improvement, and
- Re-timing of cycle times.
- Refine improvements,
- Quantify results, and
- Presentation to entire company.
Lantech combined this training with a commitment to rapid change. According to Ron Hicks, vice president of operations, "The rapid change philosophy allows you to implement changes before anyone has time to figure out why they won't work."
Lantech implemented its first paced line in 1993. This consisted of a pacing conveyor built for a main assembly and U-shaped feeder cells to feed the main line. A true "pull" production line was established in which parts were not supplied to a successive operation until they were called for. This exposed numerous problems that were addressed immediately, such as part shortages, vendor defects, and bill-of-material inaccuracies. "Our cellular operations produce just what is needed when it is needed, in the amount needed, with minimum materials equipment, labor, time and space," says Mr. Hicks.
Lantech implemented its one-piece cellular flow system by:
- Defining standard operations,
- Placing equipment in process order,
- Buying small, inexpensive, and flexible equipment,
- Developing multi-process-handling workers,
- Shaping cells for minimal motion,
- Emphasizing pull production,
- Fool-proofing tools (easy visual checks) to improve quality, and
- Holding team meetings to discuss issues and daily plans.
This one-piece flow system resulted in a true customer focus, with products built to customer needs, shorter leadtimes, orders shipped on time, improved quality, and faster introduction of new and innovative products.
Mr. Hicks says the key ingredients to successful implementation of lean manufacturing are as follows:
- Company visionary_someone who knows where you "could" go,
- Top level support and participation,
- Involvement of a large percentage of the workforce, not just the "stars,"
- No pilot programs_just jump right in,
- No threats of layoffs, and
- Follow-up, follow-up and follow-up.
Results of Lantech's reincarnation have been outstanding. By converting from a batch and queue system to a continuous flow manufacturing process:
- New product development cycle was reduced from 3-4 years to 1 year.
- Labor hours to produce a machine were reduced from 160 hours to 80 hours.
- Delivered defects per machine have been reduced from 8 to 0.8.
Productivity per employee rose from $125,000 shipped per associate in 1992 to over $225,000 in 1997. Lantech is a true testimonial to the benefits of lean production.