Lean and Green at DOREL Juvenile Group
by Dianna Brodine
Profile Fall 2010
Dorel Juvenile Group Inc. manufactures some of the most recognizable products in the world if you are a parent. Producing car seats, potties, step stools, bath tubs, strollers and more for Cosco and Safety 1st, Dorel Juvenile Group Inc. represents the largest single segment of its $2.0 billion parent company, Dorel Industries. Its customer base includes Walmart, Babies R Us, Target and Kmart.
The Columbus, Indiana facility produces five million car seats each year, operating from a 1.2 million square foot facility located on 43 acres. There are 89 loading docks for material delivery and product shipment; and the distribution center, added in 2004, can hold 22,000 pallets. Those pallets dont remain in Columbus for very long, however, since inventory typically turns every 12 to 14 days. Dorel Juvenile uses an average of 40 million pounds of plastic each year, almost all of it polypropylene, and the management team boasts that it can move product from pellet to warehouse in 15 minutes. Infant and toddler car seats are serious business.
Dorel has positioned itself well in a highly competitive market, but its retail customers add challenges to the manufacturing process. Low profit margins, tight shipping windows and retailer-dictated pricing demand efficiency in order to maximize revenue. In 2003, the Columbus headquarters found itself reevaluating its practices in order to justify its presence to parent company Dorel Industries. Looking to continue serving the customer with flexibility while also reducing costs, the parent company was considering a move to China, Mexico or a Green Field site. The team in Columbus took a deep breath and fought to reinvent itself by enlisting the help of its employees, implementing lean manufacturing practices and critically evaluating everything from quality control to scrap.
Taking Ownership of the Process
Seven years ago, Dorel Juvenile was facing a multitude of manufacturing challenges. Plant efficiency was below standard, customer requirements were not consistently met, there was a lack of employee involvement within the traditional union environment and work stations lacked visual cues or standard work instructions. We realized that the people on the floor had to have ownership, said Scott Wagner, Dorel Juveniles Columbus plant manager. We did not have very good control of our inventory, our material flow through the plant was in need of improvement and our production lines were inefficient all of these were problems that our employees could help us solve. By giving the employees ownership, they were excited about becoming a bigger part of what we were doing.
Wagner hired a director of lean manufacturing to help establish the tools needed to effectively implement lean and to conduct training for the employees. Four hundred employees completed two-day sessions with the director, while supervisors went through four weeks of lean training. Dorel began studying the jobs coming through the plant, evaluating time spent, line layouts and process efficiencies. Managers and engineers tried the processes, working alongside union employees to facilitate learning for both groups. Material flow through the plant was reinvented to cut down on the number of fork trucks moving product from one location to another. Conveyors were added, allowing teams to shorten or lengthen production lines based on production quantity. First piece samples are kept near each work cell, along with instructions and quality alerts, and now each work cell contains all pieces from production through to boxing to eliminate excess movement of material through the plant. The facility saw a 30 percent increase in productivity.
We turned the plant completely around, explained Senior Pack/Plastics Operations Manager Kenny DeBord. In the beginning we looked at a spaghetti chart and it was amazing what we were doing with materials to get them into the manufacturing process. Now it takes about 15 minutes from raw material to final product.
Teams from procurement, engineering and plant management implemented a daily walk through, making the management team more answerable to floor production workers. Visual management provided instant feedback, with hourly pace boards that light up red or green so employees know if they are meeting production goals with a glance without waiting for end-of-shift reports. White boards contain regrind percentages and a corrective action list for defects, and there is an entire hallway of white board data on audit, tracking and shift data. 5S was implemented from the top down, meaning that the office personnel including Wagner, the plant manager are held to the same standards as those on the floor.
Excess inventory was another concern. Dorel moved to a one-piece flow, providing just enough material to keep one piece flowing through the production line, reducing outside warehousing. Dorel went from what the company jokingly referred to as the IHS (In Here Somewhere) inventory location system to a dual system that uses white boards and a database system. Physical inventory used to take 400 people three days. Now it can be accomplished by 100 people in under eight hours. Dorel Juvenile has saved more than $1 million by reducing outside warehouse needs, cutting offsite material storage to less than half of its previous square footage, eliminating three buildings and reducing trucking costs.
The focus on process efficiency has paid off. At the end of 2009, plant efficiency was at 105 percent, reducing the time needed to fight fires and allowing more time for improvement projects like robotics and automatic labeling systems. Dorel Juvenile has successfully increased flexibility, creating multiple lines and shifting the crew as needed from one pre-set line to another. The cleaner, more organized work environment has improved safety. The employees are ready to jump in to help, explained DeBord. Process ownership is its own incentive.
Good for the Environment and the Bottom Line
Perhaps one of the most impressive examples of the new Dorel Juvenile way of thinking can be found in its transformation from landfill junkie to environmentally friendly corporate entity. We do a lean process here in the plant called MBWA (managing by walking around), said DeBord. We started noticing the amount of corrugate in the dumpsters, so Mark King (Dorels maintenance and facilities manager) sent one of the drivers to the local landfill with a camera. When we got the pictures back, we were shocked.
In 2006, the Columbus facility sent 204 truckloads of trash to the landfill (2,524,000 pounds). By the end of 2006, all cardboard within the plant was collected, baled and sent to the recycling facility. King sent the camera to the landfill again. This time the management team saw mounds of plastic, so in 2007 it expanded its efforts to include plastic bags and stretch wrap. That year, Dorel reduced its landfill usage to 77 truckloads totaling 1,160,000 pounds a 54 percent reduction from 2006.
Dorel set another aggressive goal for 2008, hoping to reduce the trash taken to the landfill by another 50 percent. By 2009, the facility had achieved zero landfill status. In three years, Dorel went from 204 compacted truck loads of trash to one load per month. That load is non-recyclable, so it goes to an incinerator that generates steam for downtown Indianapolis. It achieved this while adding no additional labor. Recycling stations were created throughout the facility. Compacting was done within each work cell, rather than in one remote area at the back of the plant. We went back to all the process owners and said Hey, youve already got this cardboard in your hand. Can you just throw it in the baler or recycling center if we locate them closer to you?said Wagner. We thought we were going to be doing the right thing environmentally, and we never dreamed of other benefits.
Those other benefits are more tangible than an environmentally friendly label. By starting the zero landfill project, Dorel Juvenile has reduced its labor costs by $90,000, saved $80,000 in trash hauling expenses and recouped $210,000 in its first year by selling recyclable material.
Building Quality into Packaging
Since Dorel Juveniles product line is sold in retail environments, consumer complaints are an acknowledged part of the business. At one point, our most frequently heard complaint was that cup holders were missing from the car seat boxes, said Gabe Revell, manufacturing quality assurance manager. Our focus had to change from inspecting quality in to building quality in. Dorel implemented error proofing in the form of technology scanners and light curtains that ensured the right materials were included in all packaging. Light curtains ensure that the employee reaches through the curtain to grab a cup holder every time. If the operator does not grab a cup holder, the tape machine shuts down, signaling a light and an audible alarm. Consumer complaints about missing cup holders have been virtually eliminated.
Another concern is the labels included on each car seat. Those labels are regulated warning and instruction labels, said Revell. Theyre a legal requirement, so its critical that theyre on the product and in the correct orientation. Handheld scanners verify that each car seat contains the required label, which also contains data that helps Dorel track each seat down to date and time of production in case of consumer concerns or recalls.
Training Assists with Culture Shift
The management team at Dorel Juvenile Group subscribes to the old maxim that says you must effect change one person at a time. At Dorel, that required a significant investment in training for everyone within the facility. Led by Human Resources Manager Tammy Poole, the company has increased skill competencies with the Global Standards for Plastics Certification, conflict resolution classes, and a management supervisory institute. We also have individuals go through classroom training with online education or DVDs to help with skills ability and knowledge in plastics resins and processing, explained Poole. The training has helped us look at our processes and orientation program for new hires.
During the management supervisory institute, 71 employees both union and non-union underwent 10 weeks of training, 8 hours a day, focusing on team building and communication. We had people in our purchasing department who had never met operators who had been on the floor for 25 years, Poole said. We had to get rid of the Us v. Them culture. Conflict resolution classes increased the frequency of problem-solving on the floor and decreased union grievance instances. The emphasis on communication created a willingness to speak up, increasing the sense of responsibility each employee felt for the success of the company.
Ive always said it was like an epiphany to me the day that I realized were not properly utilizing the people here at Dorel, either hourly or management, said Wagner. We had to let the people on the floor understand what our goals and objections are, while letting them take the ownership for the process itself. They are the ones who deserve all of the credit and accolades for what we have accomplished.
Continued innovation in product development is the key to our business. Its such a competitive marketplace, said Wagner, we cant stop for a minute. We must keep creating new ideas, and those new products drive the marketplace. We are collaborating with design and development teams simultaneously to increase efficiencies, bringing our products to the marketplace faster. We are constantly striving for evolution in innovation and safety.