Case study Scania:  Standardization as starting point

According to Gerard Bannink, logistics manager at Scania, the US economy has long been driven by the idea that you can never make too much. 'That’s how material requirements planning or MRP thinking was born,' says Bannink. “For instance, refrigerators were made in huge numbers, based on predicted demand.'

Bannink continues, 'In Japan however, after World War II, almost everything was in short supply. That’s why Toyota placed the emphasis on minimizing waste and building their cars on demand. Note however, that the Japanese themselves don’t talk about lean manufacturing. That is because this way of thinking has become so inherent to their manufacturing processes.'

After the recession of the nineties, people in the US and Europe started to think lean as well. 'First, emphasis was laid on the mean and clean aspects”, Bannink clarifies, 'There was to much focus on cost reduction. Later, the emphasis shifted to satisfying the customer. Since then the aim is to add value to products with as little waste as possible, and having materials stream through the factory.'

This idea is not new, Bannink points out. 'Lean manufacturing heralds a revival of many 20th century production concepts, such as Ford’s in-line production system and working in autonomous teams. And of course the Kanban system of Toyota.'

      ^ One Piece Flow painting:  A customer-specific colour is sucked
         up form a small can, and is then transported to the painting robots.

The senior management of Scania and Toyota came together in 1995 for the first time, when seven Swedish colleagues of Bannink visited the Toyota factories in America. After a few small pilot projects, Scania rolled out the structured way of thinking and working, prescribed by lean manufacturing, through the entire company. Bannink says, 'Now we call it the Scania Production System. That is because our system is a customized version of the Toyota Production System.'

Scania Production System
The Scania Production System (SPS) is literally built like a house. Bannink explains: 'Our values are the foundation: the customer comes first, we respect our workers and we strive for as little waste as possible. The floor represents how we’ve standardized our working methods. Finallly, the walls show how we’re making improvements, mainly through production-on-demand and by something which we call ‘error-free from me’. With that, we mean that we aim to produce every part correctly, first time right.'

Bannink continues, 'At first you might not see the link between standardization and minimizing waste. Let me clarify this by comparing it with standardizing the process of making a delicious apple pie. My wife is Indonesian and she peels the apples away from her, while Western people usually peel towards themselves. The direction of peeling however has no effect on the result. Only things which influence the product quality should be written down in the recipe, which then becomes the standard working method. A badly baked apple pie is waste.'

All Scania employees have attended in-house courses in lean manufacturing. Part of that course is a simulation using Lego blocks. Bannink: 'You assemble those Lego blocks to trucks, for example. First you do it the old way, and later you standardize the process. Then you will notice that the quality improves, and that it becomes easier to take over someone else’s task.'

Production capacity at Scania’s Zwolle site increased from 100 to 150 trucks a day, between 2000 and 2004. During that period, Bannink was logistics project leader. 'The SPS had little impact on the project organization, but it did influence the decisions we made. Given a choice between two alternatives, safety and quality became the deciding factors, not cost.'

The Zwolle factory was reorganized, so that production occurs in flow. In addition, contracts with some suppliers were revised so that their materials would arrive just in time. In additition, the work floor became much more conveniently arranged. 'That’s important,' concludes Bannink, 'To achieve error-free production, you need to be able to go and see, and intervene quickly if problems occur. We now have what we call an interactive factory. For IT support we use an ERP-system which was developed in-house.'

Tips to introduce Lean Manufacturing

• Read, from James P. Womack and Daniel Jones: (1) The machine that changed the world. New York, Rawson and Associates (1990). (2) Lean thinking. Touchstone Books (1996). Read, from Ballé and Ballé, (1) The Gold Mine and (2) The Lean manager

• Read all the articles and case studies on this site!

• Follow a course about Lean.

• Visit companies that are Lean. While doing that, think above all: how can I apply this in my situation?

• Standardize your work processes, this will form the basis for improvement.

• Organize your work flow according to the “value stream”.

• Eliminate all activities that do not add value to the product, also in the office. Intermediate stock and waiting times are taboo, everywhere!

• Delegate as much responsibility as possible to (autonomous teams of) people who add value to your product or service.

• Ensure that all your employees understand the Lean principles.

• Pay lots of attention to change management.

• Don’t forget research & development. Product development is Lean if the new products are precisely conform customer’s wishes, and if those products can be manufactured efficiently, in a Lean way.
  
  
• Lean is like dieting: watch out for a yo-yo effect. Check continuously if non-value adding processes are re-introduced. If so, eliminate them again.
  
  
• Contact a consultancy firm for help, here's a list of our sponsors/advertisers of the site-section Lean.
  *) see also our disclaimer