“The optimist says the glass is half full,” Plant Director Sami Soiramo relates a story at a spring gathering of Ensto’s Lean practitioners. “The pessimist says it’s half empty. But the Lean thinker wonders why the glass is twice too big.”
The Pull Review is Ensto’s regular gathering of the company’s Lean manufacturing missionaries, those who are responsible for the company-wide implementation of programs that reduce lead time, improve delivery accuracy, and create the flexibility that gives Ensto its competitive edge.
The idea behind Pull was possibly best described by Taiichi Ohno, Toyota engineer and Father of Lean, who said “Let the flow manage the processes and not let management manage the flow.”
In the Pull world, flow is not activated by a central plan to stock a warehouse or by a manager’s sales forecast. Rather, an actual customer order sets the system in motion by pulling goods through it. The customer order, in effect, reaches through the complete supply chain, triggering flow all the way from suppliers to Ensto’s finished goods stock.
Ensto’s Pull practitioners are responsible for not only setting up and managing the Pull process – setting up the “supermarket,” making sure components are in correct places, instituting the Kanban box system – but also for convincing fellow workers that Pull is a good idea.
“The single most difficult thing about instituting Pull is resistance to change,” says Lasse Lehtinen, Project Manager and chief Pull evangelist. “If people aren’t familiar with the concept, it isn’t easy to see the benefits that will come. However, great thing is that when time passes, people understand that we are not just changing the way of steering material flows but developing all the processes and challenging ourselves towards more efficient, flexible and visual way of operating."
How Ensto pulls
Since Ensto launched its operational excellence Pull program in 2013, it has fully implemented 44 pull projects and has 7 ongoing production projects.
The Ensto company-wide level target is for 50 percent of all manufacturing hours to be in Pull in Keila, Porvoo and Tallinn factories by the end of 2016, though some individual factories have targets as high as 70 percent of hours. (As of Oct 2016, 48.7 percent of all Ensto manufacturing hours are Pull.)
Also Ensto St.Petersburg factory has recently joined in to Pull frontier and we can expect to see one totally Pull steered factory in Russia during 2017.
Delivery accuracy (or DA) is a key benefit of Pull. “DA means a customer getting the right product at the exact right time,” says Lehtinen, who notes Ensto products delivered from non-Pull manufacturing processes have 90.6 percent DA. But use Pull processes and DA climbs to an impressive 94.2 percent (the most recent 1.5 years’ average DA taken in March 2016).
Pull also decreases inventory, which frees cash for other purposes. Thanks to Pull- and Kanban-steered inventory, Ensto decreased its inventory value of Kanban items by 16.5 percent from March 2015 to March 2016. Lead time reduction is another touted benefit of Pull.
Pull also saves money through improved traceability. The ability to precisely identify defective batches literally saves tens of thousands of euros every year.
But KPIs do not tell the whole story, and the greatest benefits of Pull are actually hard to quantify. “It’s difficult to measure the value of improving the skills of people, and improving operations to meet competition in future markets,” says Lehtinen.
The future: Lengthen the chain
“So far we’ve emphasized the production part, what happens in the factory,” says Lehtinen. “But we are now starting to work more with suppliers and, in the future, with customers. The longer the chain, the bigger the benefit.” Already there are 21 suppliers in active pull steering.
Lehtinen has been impressed by how quickly Ensto suppliers have embraced Pull. “Kanban is very visual and easy to use, and this is one reason they’re taking it. They can also see an up-to-date stock situation at all times. Suppliers very clearly understand the benefits of being Lean: an improved turnover rate, better DA, and quickened cash flow.”
In the future Ensto will convince also customers of the system’s benefits. Lehtinen sees it as important to inform customers, to talk about the EOX program (Ensto Operational Excellence), and Lean. “We’ll start to see customer implementations latest in 2018,” he says.
The ultimate compliment
Ensto is making clear progress in its journey to world-class manufacturing, “world class” often defined as working as efficiently as Toyota.
Although lead time reductions and improved DA are the core benefits, another clear sign of becoming world class is outside recognition.
“People come to Ensto’s Keila factory in Estonia for Lean benchmarking,” says Ensto Plant Director Kaarel Suuk. “Almost every day a company or student visits us. I’m proud to work here.”