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TOCICO International Conference - PROGRAM

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July 16-19, 2017
Melia Hotel in Berlin, Germany.


Kobus van der Zel - Entrepreneur - Private Equity Fund / TOC 
  Co-Presenter Nikos Kallas (Click to view Bio) - Adobe’s Search Program Manager
   
 

A) Why was there a need for Change? In 2016 the real estate boom in the city of Vancouver had created an insatiable demand for ultra-high end books, brochures and floor plans to help developers sell more condominiums. But MET Fine Printers (“MET”) could not take advantage as they were only utilizing 7.8% of their printing press capacity on average. But the constraint was not in the market as its presses were already running around the clock to meet demand.

Step 1 – What to Change? The printing industry, which had been under intense financial pressure for decades due to the Internet, is dominated by Lean manufacturing techniques, and the prime measurement for any printer today is the Lean metric of OEE (Overall Equipment Effectiveness). MET’s management team knew they had to break the vicious cycle they were in – being forced to run their printing presses on three shifts around the clock despite the low utilization of only 7.8% OEE.
In one example MET produced a simple four color presentation folder by purchasing 3,500 sheets of paper – while the customer only ordered 1,000. Where did the difference go? The industry calls it “make-ready”, but as TOC practitioners it is simply set-up. A set-up for the 40” sheetfed presses MET runs required a “pull” of about 50-100 sheets of paper, and it turns out for the average job MET required 20 pulls to get the colour perfect for their demanding customers who do press checks themselves at press.

Step 2 – What to Change To? Drum-Buffer-Rope was able to lift the OEE (“Utilization”) to 12%, but still short of the industry average of 14%, and leading competitors at 30%.

But to really break the vicious cycle MET needed more advanced tools to reduce the set-up from 20 pulls (3.5 hours) to three pulls (less than an hour).

Step 3 – How to Change? To ensure the set-up reduction will be done on a sustainable basis the knowledge of the MET people had to be addressed first. A 5-belt continuous improvement credit program was introduced as a pull system for the 100 people operating in 2 manufacturing locations. Libraries with books on TOC, lean manufacturing, general business and personal development were put in both MET locations. People earned credits for reading these books, and for participating in Kaizen events and other process improvement initiatives. The credits allow them to earn from a yellow through to a master black belt.

The next link of the people pull system was to link significant incentives to the bi-weekly payroll cycle for all shop personnel. In one early payroll cycle the entire bindery received 38% more money for setting a new benchmark in OEE performance.

Next small Kaizen events were held where a set-up will be video recorded before being analysed in a lean standard work chart and dissected for value-added and non-value added tasks. The teams soon learned that anything that is video recorded can be easily improved using this process – even visiting suppliers and helping sub-trade suppliers reduce their set-up times (which was consuming MET’s paper.

B) How do you measure, refocus, sustain and grow the Change? One of the unique features of MET’s CI system before the set-up reduction was daily CI meetings, complete with microphones, wide screen TV and amplified audio. It used to be more of a sales feel-good get together, but these 15 minute meetings soon gained momentum when video’s started to appear of pressmen doing jobs in 5 pulls – using less than half the “make-ready” paper than before.

Yellow and orange belts are now regularly earned by MET people who dedicated themselves to their own personal development. The libraries that remain at each location was comprised not only of TOC books but also include many lean manufacturing books and people were trained on how to perform a Kaizen event or do a Spaghetti diagram to identify improvement opportunities once bottlenecks were correctly identified.

The Key Performance Indicators (KPIs) were changed to TOC metrics, and the accounting personnel were trained and put in charge of administering and reviewing the weekly metrics with the operations and sales teams.

The following obstacles remain:

  • Many shifts had to be reduced due to sales being unable to keep up with OEE improvement.
  • Continuous improvement credit system is not linked to the performance reviews or incentive system for management.
  • Many key people have developed themselves far less than others have which raises the question: How much pull and how much push should a company use in developing their people?
 
MET’s 40” Man Roland 8 Color Press.
Kobus van der Zel is the founder of Global Turnarounds Inc., operating as a Certified Turnaround Professional (CTP) in companies facing liquidity or transition challenges. Kobus holds mechanical engineering and MBA degrees, and is a qualified TOC Jonah (1999).

Since 1999 he has tied his turnaround fees to monthly profitability or cash flow results, in order to create a pull system for truly understanding the obstacles for higher business and people performance. Coaching and interim CEO engagements over a span of 16 years in South Africa, Canada and the USA has enabled him to summarize the forces preventing higher performance in his book The Forces of Progress (www.lulu.com/spotlight/globalturnarounds).

“When I engage with a new underperforming company I am always surprised at how so many weak people could have gathered in one company” Kobus says. “Eli helped me to understand that people are inherently good, and that it was the company that made the people weak – which is great news, because it means the process can be reversed to make them strong again!”

Kobus’ system for people development is at the root of his turnaround strategies – which combine the best of TOC, lean manufacturing and people development processes to ensure optimal cash flow generation when it is needed most.