Lean companies see huge gains

‘Workforces become more engaged’

‘Workforces become more engaged’

Less than a year after Gisborne businesses started implementing a series of management principles made famous by the Toyota Motor Company, designed to give the “shop floor” more stake in businesses, some are now doubling their workforce and moving to bigger premises to cope with the rise in productivity.

Activate Tairawhiti regional business partner Jo Emerre said last year 37 management-level people from 13 Gisborne businesses attended the region’s first Better By Lean workshop, aimed at teaching businesses about Lean management principles inspired by Toyota’s Toyota Production System.

A second workshop, funded by Callaghan Innovation, will take place on June 21 and people were already registering to take part.

“Hopefully there is now a bit more of a groundswell for Lean in the region. We have six undertaking the Lean journey at the moment, four of them were from the last workshop and four more from the workshop are in the pipeline. So that’s eight of the 12 that are either doing it, or poised to do so — with an additional two companies who hadn’t had anything to do with Lean to-date and just came along organically.”

The Lean Hub improvement specialist Trevor Hall said those businesses that had decided to implement Lean principles following last year’s workshop had seen huge improvements.

“What I’ve seen change over the past nine months is that workforces have become more engaged in their work process. They’ve actually started to understand what the business is striving to achieve. I’ve seen a lot less stress out of managers and owners because engaged staff are making right decisions and I’ve seen numbers shift.

“There has been a 24.3 percent improvement in productivity across the companies, as well as eight extra staff employed. One company is about to employ an extra 10 staff, so they are about to literally double their workforce.”

Substantial investments

Mr Hall said some of the companies involved had also invested upwards of $300,000 just so their production facilities could cope with the improvements.

“The improved productivity also improves cashflow which makes owners happy, and they have also seen the supply chain that feeds into that lift their game.”

Some companies, like White Pointer Boats, one of those involved in the Lean course, were now starting to ask if their supply chains could keep up.

“That’s massive, because in my experience about 40 percent of problems faced by a business are outside of that business. It’s either a customer issue or a supply issue.

“What I find happens over the first part of the programme is a real reality check for everybody in the business. They then realise they were not as good as they thought they were, then their game lifts and that trickles down to what they can do to help their supply chain so they support us better.

“It’s almost like businesses that go down this road are investing, without their supplier knowing, in their supply chain.”

Implementing the programme had also resulted in some of the businesses improving their finances as well, by implementing simple but effective systems.

“This is good for the region. It just amazes me the calibre of people working in Gisborne businesses that are almost unrecognised outside of their businesses. If you look at White Pointer Boats for example, there are 15 extremely highly-skilled guys. There is a lot of talent out there.”

The principles of Lean could be put in place step-by-step to ensure continuous growth, he said.

“There is a disconnect between leadership and the shop floor. What I like to do is engage the shop floor. When you have 20 people fired up because they know they can start making decisions to improve their little piece of real estate within their factory, it almost becomes a case of ‘can the management hang on to that’. Rather than trying to drive change from the top down, it will work for a while but it won’t be continuous. When you get staff involved it’s continuous.”

It was important to note that being lean did not have anything to do with employing fewer people. Mrs Emerre said that anyone thinking of taking the Lean journey should attend the workshop to get their head around just what Lean principles were.

The workshop was a University of Auckland-led event. Businesses taking the Lean journey would be able to receive up to $20,000 of funding to implement the principles, from Callaghan Innovation, on a dollar-for-dollar basis.

Less than a year after Gisborne businesses started implementing a series of management principles made famous by the Toyota Motor Company, designed to give the “shop floor” more stake in businesses, some are now doubling their workforce and moving to bigger premises to cope with the rise in productivity.

Activate Tairawhiti regional business partner Jo Emerre said last year 37 management-level people from 13 Gisborne businesses attended the region’s first Better By Lean workshop, aimed at teaching businesses about Lean management principles inspired by Toyota’s Toyota Production System.

A second workshop, funded by Callaghan Innovation, will take place on June 21 and people were already registering to take part.

“Hopefully there is now a bit more of a groundswell for Lean in the region. We have six undertaking the Lean journey at the moment, four of them were from the last workshop and four more from the workshop are in the pipeline. So that’s eight of the 12 that are either doing it, or poised to do so — with an additional two companies who hadn’t had anything to do with Lean to-date and just came along organically.”

The Lean Hub improvement specialist Trevor Hall said those businesses that had decided to implement Lean principles following last year’s workshop had seen huge improvements.

“What I’ve seen change over the past nine months is that workforces have become more engaged in their work process. They’ve actually started to understand what the business is striving to achieve. I’ve seen a lot less stress out of managers and owners because engaged staff are making right decisions and I’ve seen numbers shift.

“There has been a 24.3 percent improvement in productivity across the companies, as well as eight extra staff employed. One company is about to employ an extra 10 staff, so they are about to literally double their workforce.”

Substantial investments

Mr Hall said some of the companies involved had also invested upwards of $300,000 just so their production facilities could cope with the improvements.

“The improved productivity also improves cashflow which makes owners happy, and they have also seen the supply chain that feeds into that lift their game.”

Some companies, like White Pointer Boats, one of those involved in the Lean course, were now starting to ask if their supply chains could keep up.

“That’s massive, because in my experience about 40 percent of problems faced by a business are outside of that business. It’s either a customer issue or a supply issue.

“What I find happens over the first part of the programme is a real reality check for everybody in the business. They then realise they were not as good as they thought they were, then their game lifts and that trickles down to what they can do to help their supply chain so they support us better.

“It’s almost like businesses that go down this road are investing, without their supplier knowing, in their supply chain.”

Implementing the programme had also resulted in some of the businesses improving their finances as well, by implementing simple but effective systems.

“This is good for the region. It just amazes me the calibre of people working in Gisborne businesses that are almost unrecognised outside of their businesses. If you look at White Pointer Boats for example, there are 15 extremely highly-skilled guys. There is a lot of talent out there.”

The principles of Lean could be put in place step-by-step to ensure continuous growth, he said.

“There is a disconnect between leadership and the shop floor. What I like to do is engage the shop floor. When you have 20 people fired up because they know they can start making decisions to improve their little piece of real estate within their factory, it almost becomes a case of ‘can the management hang on to that’. Rather than trying to drive change from the top down, it will work for a while but it won’t be continuous. When you get staff involved it’s continuous.”

It was important to note that being lean did not have anything to do with employing fewer people. Mrs Emerre said that anyone thinking of taking the Lean journey should attend the workshop to get their head around just what Lean principles were.

The workshop was a University of Auckland-led event. Businesses taking the Lean journey would be able to receive up to $20,000 of funding to implement the principles, from Callaghan Innovation, on a dollar-for-dollar basis.

■ To register for the June workshop contact jo@activatetairawhiti.co.nz or go through www.callaghaninnovation.govt.nz/innovation-skills/better-lean

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