Lean thinking is like a magic wand for companies looking to optimize their processes systemically. But, as with any magic, it’s essential to make sure everyone knows the spell – i.e., the main flow of operations must be visible and understandable to all employees. It’s like having X-ray vision, allowing us to spot all the waste in our daily processes.
Hangers, Inc, located in Austin, Texas, is a central dry-cleaning facility that receives dirty clothes from several stores. This business utilizes a state-of-the-art liquid carbon dioxide cleaning process as an alternative to the commonly used toxic solvent, perchloroethylene.
As the market expanded, the franchise owner wanted to know if the plant could keep up with the influx of dirty clothes from adding two new drop stores. So, he brought in the efficiency expert, Dick Barry, to apply lean management techniques to the processes. For two years, The Company learned the art of “Lean Thinking” and implemented it at the central plant with fantastic results. Then, they moved beyond just trimming the “low-hanging fruit” of waste and dove into the exciting world of process simulation modeling. The goal was to increase production output by 45 percent, all while keeping the workweek at a cozy 40 hours and no overtime. Plus, if the return on investment was good enough, some new fancy capital equipment could be purchased.
They built three models like building blocks, one for the “Current” plant, another for the “Extended” plant, and the last one for the “Lean Extended” plant. The “Current” state model acted as a control group to ensure the simulation model accurately represented the process. Validating the assumptions was like a game of “mystery science theater” for the process, and it was essential for everyone to understand each process in detail.
The three models were like detectives, each with their own set of “Process” measurement requirements to help solve the mystery of “If there’s a change, how will we know it’s for the better?”. The PCE (Process Cycle Efficiency) for most manufacturing plants is usually less than 5 percent. However, to be considered “Lean,” the PCE should be over 10 percent. Initially, the internal PCE for the Austin plant was approximately 4.1 percent, and the external PCE was 1.4 percent, including the time it took to transport the clothes from the retail centers to the plant.
The second metric was like a detective story, dealing with Bottleneck analysis and Prioritizing the most critical problems. The team compared 12 key activities using the Pareto principle, like a magnifying glass, to the “Average Minutes per Entry” metrics created by ProcessModel.
Ten “Hot Spots” in Process Stream indicate a
high source of congestion and delays
The third metric was like a spy mission; it kept an eye on the utilization of personnel, which was crucial in decreasing the “Direct Labor Cost Percentage” outcome. Many dry-cleaning facilities have labor expenses between 25-40%. Thus, controlling labor costs is essential for a profitable dry-cleaning operation. It’s like keeping tabs on how much cash you’re spending on your secret agents; you want to ensure you’re getting the most out of them without overspending.
The finishing department processes garments into ten sub-categories known as “Garment Types.” Certain Garment Types at The Company’s HDC plant required specialized equipment to achieve the desired output for that particular Garment Type group. As the current dry-cleaning equipment had a “one-size-fits-all” approach, we employed the model to evaluate the impact of new equipment on the business. Other modifications made to the model included:
- Ditch the old-fashioned “batch & queue” concept and go with a continuous flow system.
- Hire two new employees, get two new work cells and add them to the production process.
- Make sure employees can step in and out of different roles with cross-training.
- Cut down on rework within the four-rework loops.
- Give two work cells a capacity boost by doubling it and give the other two a 65 percent increase.
Based on the results, The Company’s HDC changed its plant layout this year to absorb the anticipated inflow of additional garments.
Production peaked at 6,600 garments per week, using a 14-hour day at the project start. The simulation showed the management how to achieve 10,000 garments per week using an 8-hour day, using lean concepts. That’s a win for Hangers.