Operational Turnaround Success at PaperPak
PaperPak's two production plants were struggling with efficiencies between 50% and 60%, high waste, and inconsistent quality. Lisa Anderson, leading a team from PaperPak, focused on two key areas to improve operations: people and process.
People
Problem: Before our intervention, PaperPak employees worked together, but lacked true teamwork because they were held accountable to conflicting goals. For example, the plant manager was solely accountable for efficiencies, and the purchasing manager was solely accountable for the purchase cost of materials. If the purchasing manager wanted to improve his purchase cost quickly, his goal would tempt him to order cheaper materials, which would negatively impact production efficiencies (the plant manager's goal). Another example: the freight manager's goal of low freight costs tempted her to ship only full truckloads (instead of partial truckloads), which negatively impacted customer service (the loads did not arrive on time because the load had to wait for other customers' orders which were not due yet).
Solution: Lisa Anderson's team worked with PaperPak leadership and employees to create a truly cooperative and mutually-supportive team. Through meetings, team training, coaching, and performance management, we actively and directly involved the employees-from managers to front-line machine operators-in generating ideas and asking questions about every aspect of the plant's operational processes. The employees:
- Explored the company vision.
- Established clear thirty, sixty, and ninety day goals for the company.
- Implemented the philosophy, "Mistakes are good; trends of mistakes are not," to encourage risk taking and learning.
- Measured progress toward the goals.
- Followed through with accountability, feedback, recognition of successes, and regular communication on plant and company progress.
As a result of our efforts, plant-wide assessment shifted from a focus on individual goals to a focus on company goals; employees now work towards both.
Process
Problem: PaperPak's plants produced high levels of scrap and waste materials.
Solution: Lisa Anderson's team collaborated with PaperPak leadership and employees to establish a consistent, reliable operational process to reduce waste and increase productivity.
First, together with leadership and employees, we began by examining PaperPak's existing production processes:
- What are the processes today?
- What are the results of today's processes?
- In which areas can we improve the processes?
- Which processes, if improved, would make the greatest positive impact on PaperPak's productivity?
We used tools such as root cause analysis and implemented metric tracking. We discussed operations with the employees running the machines, maintenance workers, and management. We included all people involved in the production process.
Through our discussions with PaperPak personnel and our data collection, we identified the top five "down time" reasons (time in which the production machines were not fully operational). The first down time problem: machine jams. The machines jammed when lower quality materials were used or during changeovers from one item to another.
After identifying the top five down time problems, we tackled them one at a time. To solve each problem, we created a new process to implement and standardize the changes. Creating a new process was an inclusive effort: sometimes involving formal training, but always getting the right people together to solve the problem.
After PaperPak implemented and standardized the process changes, we analyzed production output after the new processes were used consistently.
Results
The new processes implemented by Lisa Anderson's team increased PaperPak's overall productivity: The plants improved to 80% efficiency within six months, waste decreased by $4 million per annum, and the inconsistent quality problems disappeared.
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