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This article: The durable Lean transformation of Océ
Source: Business-improvement.eu
Lean: The value adding organization
Part of the layout of the factory floor before the Lean transformation Shoveling waste out of the factory works better than using a bulldozer
By Dr Jaap van Ede, editor-in-chief business-improvement.eu, 08-01-20141

Lean can be implemented in a technical way, for example by positioning the machines in processing sequence. Guus Cox, operations manager at Océ, compares this with using a bulldozer to push the waste out of the factory. This gives fast but temporary results, because the behavior of the people has not changed. It is far better to encourage the employees, to remove the waste bit by bit themselves. This takes much longer and it requires a lot of management attention, but the end result is much better. You will get a real Lean organization in which the people jointly solve problems, and help to improve every day. You will never need that bulldozer anymore.

However, Cox faced a problem: Océ is a listed company. He had to deliver results fast, otherwise his ambitious Lean transformation would be called off prematurely. To this end, he chose for a Lean implementation in waves, starting with the actions which would give the most visible results.

So, yet again the bulldozer like approach? No, from the beginning there was an essential difference. Everyone was encouraged to think along and come up with objections. Soon, the results became visible. Océ now produces 20% more on 60% less floor space. The freed space was used to insource extra work.

A story about sunrise meetings, soccer teams and a storm that does not die down.

Our company has had a hard time in the past years, says Guus Cox, operations manager assembly at Océ in Venlo.

Guus Cox‘The market for printers en copiers is dominated by Canon, Xerox and Ricoh. We followed at a large distance. It was clear that we could not survive on our own. Therefore, our executive board started to look for a big player for which we would be a nice supplement. This turned out to be Canon.’

‘They primarily make printers in large series for the consumer market, and they distribute by way of dealers. By contrast, we produce custom-made printers in small series, high-mix low-volume production. And we sell directly to companies.’  

Right to exist
In 2010, Canon took over Océ. However, that did not mean that the employment in the Netherlands was ensured for the future.

‘We had to prove that we have the right to exist within the Canon group. Otherwise, our production would be moved to China or Japan. So, after we became part of Canon, our mission became: becoming best-in-class in high-mix low-volume production, at least in comparison with the internal competition within Canon.’

The products of Océ are developed in the city of Venlo in the Netherlands. ‘We also produce some strategical components here, like toners and printed circuit boards. The majority of the parts for the printers are however bought and assembled. Components with a high “value density” we procure in the Far East. Voluminous parts we obtain from companies in the EU. For those parts, transport by truck is cheaper and more flexible than by boat.’

Lean manufacturing
Guus Cox convinced the top management of Océ that Lean manufacturing was the best way to become best-in-class in high-mix low-volume assembly. ‘Promises like becoming more efficient, better and cheaper won them over. I was given permission to start with a small group. What also helped was the fact that Canon has a lot of experience with Lean, so we could learn from them’

Cox visited several production sites in Asia. ‘When I went to those factories, I thought that the gap between them and us would be unbridgeable. However, it was not so bad. Now I think that we can come close to the efficiency of the Asians, regarding production logistics and organization, given our specific situation with high-mix low-volume production. That would make us in some ways unique within the Canon group.’

The factory floor at Océ before and after the Lean transformation
^ The factory floor at Océ before (left) and after (right) the Lean transformation

Just do, then think
Cox noticed how structured the production lines of Canon are arranged, and how improvement is done in many small steps. “Just do, then think”, they said. ‘That was an eye-opener for me. In the Anglo-Saxon culture we are inclined to figure out exactly how to arrive at point B, coming from A. Only then an improvement initiative is started, in the form of a big project.  When you apply Lean, solutions are not worked out in that much detail. Instead, ideas are tried out immediately whenever possible. That way you acquire more knowledge about your production process, then when you remain sitting and thinking behind your desk.’  

Copying Canon’s production lines was not an option for Océ. ‘First, that way Lean will not become embedded in your organization. You will not get the ownership you need for further improvement. Second, our assembly process is totally different. Canon makes large amounts of printers. We produce small amounts, with different models that alternate frequently.’

Fresh pair of eyes
Cox remembered Marc de Jongh, consultant lean manufacturing at Q-Consult. ‘I asked him for assistance, but the real work we wished to do by ourselves. From the beginning I had a durable Lean transformation in mind. So not only introducing the Lean tools, but also creating the matching organization and culture'.

In doing that, Q-Consult had primarily a supporting role. 'They observed every step we took, and told us what we did well, and what we could do better. That helped and still helps us a lot. Two years after we started with Lean, Q-consults still visits us one day each month to monitor one particular Lean aspect. An example is attending our daily sunrise meetings.'

A fresh pair of eyes sees more. 'Recently, I experienced that myself in the role of observer, during a Gemba Walk. As a Lean manager you visit the working floor or Gemba frequently, to stay in close contact with the things that are happening there. During such a Gemba visit I noticed a couple of empty boxes and asked why these were there. That may appear niggling but as part of the 5S-principles we wish to keep everything clean and ordered. The warehouse worker responded to my question as follows: “Those boxes have been there for such a long time, that I became blind for them.”’

The complex layout of the factory before the Lean transformation
^ The complex layout of the factory before the Lean transformation

Listed company
Ideally, the top management decides that Lean will be adopted one way or another. ‘However, that is not realistic in a listed company. In that case you have to deliver results within a short term. So, my challenge was to demonstrate quickly that the Lean approach works. Otherwise, the introduction of Lean would be stopped.’

One route to quick wins is the project-like approach mentioned earlier. ‘In that case the focus is on the "hard" side of Lean, for example by applying tools like Kanban. Especially in technically oriented companies like ours the temptation to do this is big. However, I did not want that, because I am convinced that Lean will not sink in without matching changes in the people and the organization.’

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