LEANING AND BOOMING
The growth of the Brazilian economy is on everybody’s lips, and there is no doubt the success of many Brazilian companies is related to the adoption of lean principles. José Roberto Ferro, President of the Lean Institute Brasil, introduces LMJ’s special on lean in the South American nation.
A great number of Brazilian companies have now embarked on a lean journey. More than 50% of the 100 largest companies in the country have started some lean initiatives. Of the 100 largest industrial companies, about 80% have taken some steps introducing the lean tools or creating new operational or management systems inspired by the lean concepts and philosophy.
The cases presented in this edition highlight some examples in a wide range of businesses, from a global conglomerate to a local healthcare centre, a Brazilian food giant and a local soft ware developer.
Like in many other countries, the interest in lean has been increasing in Brazil, and moving from manufacturing to services. Originally based on manufacturing companies initiatives in the automotive sectors, it has been gradually expanded to other manufacturing sectors and also to the service sector.
The case studies presented in this issue exemplify the reach and scope of lean initiatives in Brazil.
The 3M example shows a US company which has just celebrated the achievements of 10 years of lean implementation in Brazil. It’s a highly diversified business with multiple sites and hundreds of products reaching many markets, in which lean has to tackle the challenges presented by manufacturing and logistics. But 3M is also very innovative and relies on the constant development of many products, which presents the company with another great challenge: focusing the development activity through a solid hoshin kanri process, at the same time to allow for a great deal of individual initiatives.
Brasil Foods is a very successful Brazilian company with a varied parti cipati on in diff erent market segments and a global reach through high volume of exports. It started its journey more recently and has already captured significant results. In the service sector, most of the initiatives are recent, having started in the last two to three years.
The Instituto Oncologico do Vale (IOV) is one of the pioneering cases of lean in healthcare in the country, with a unique approach and focus. There are many similarities in lean transformation in healthcare as compared to manufacturing, but there are many differences as well. We are in the early days of learning how to implement lean in healthcare. There is a great potential, as hospitals are still managed in a very traditional way that can benefit from implementing lean.
Ci&T is a very young and fast growing soft ware development company beginning a lean transformation process as their clients, mostly global companies, demand faster products, lower costs and better quality. Their challenge is to provide services to clients, many of them on their own lean journey and expecting new levels of services.
However, despite these early successes, in Brazil most companies are still focused on the implementation of lean tools, rather than on creating a lean business system and a new culture. This will be the challenge in the years ahead.
HEALTHCARE REVOLUTION IN THE MAKING?
By introducing a unique version of kaizen events and by focusing on processes and flow, the Instituto Oncologico do Vale, a cancer treatment centre near São Paulo, is achieving great results. Director Carlos Frederico Pinto explains.
Our lean journey began in 2008, with a value stream map of the arrival and registration area. This was aimed to address one of the main problems we face: overcrowding. We mostly treat very poor patients who arrive on public transport early in the morning, even when their appointment is at 1pm. Sometimes they have to wait for a bus late in the evening to go home. We have lots of people around all the time.
We recorded good improvement with the pilot project and decided to launch a second one, on chemotheraphy prescriptions, a complex process that used to require 40 steps. We now have nine, which means we eliminated 500 minutes of non-value added work and 48 of added value work. Additionally, we haven’t seen a single error in billing since 2009.
We quickly realised that week-long kaizen events didn’t work for us. Taking people off work for a week was not lean in itself. We do “mini-mini kaizens” instead, four- to six-hour events with implementation times of two to eight weeks.
Two thirds of our staff have received lean training and we have now completed over 100 projects: the biggest result we have seen is a 270% increase in the number of patients treated every month over the last four years. In the same period, staff has increased by just 6%.
We keep moving along the value stream, working on different flows like patients, safety (lean and safety are one thing for us), environment and information.
At the same time, we are spreading our lean efforts to other units of the Hospital Regional do Vale da Paraíba, with the idea to turn quality departments into lean teams and to become a true lean enterprise. We managed to get the clinical director on board: he became very enthusiastic aft er noticing his patients had stopped complaining about the long waits.
A new ICU project, to give you an example of what we do, will see the project leader, who is the head of the ICU unit, liaise with the other units involved in the process, inpatient and surgery, so that the entire surgical patient flow is addressed.
Some of the projects we have implemented have been very successful, like those related to supplies and bed management (patient discharge now takes four hours, 20% less than before, which means 30 to 40 extra patients are discharged daily), others haven’t. The surgical unit project, for example, aimed to better meet the occupancy rate by changing the layout of operating rooms and creating a mobile emergency room, but not everyone was engaged enough, and some surgeons did not accept the idea of following a rota system: these factors caused the project to fail.
We are currently looking at including the Toyota kata into our daily huddles, in order to be able to really improve on a daily basis.
LEAN INSTALLATION: [ALMOST] COMPLETE
Headquartered in Campinas, Brazil, and with operations across the world, Ci&T provides web and mobile application services and software product engineering. Global Delivery Director Aminabad Nunes discusses how beneficial the use of Agile and lean methodologies is for the company.
When we started with lean in 2007, we had a very successful and “classic” soft ware production process in place. And yet, we felt like we were missing something in our value proposition. Until 2007 we followed an old-school approach to IT management, driven by the obsession of merely delivering the original plan on time and on budget without a clear focus on generating value. We surrounded ourselves with processes and patterns that helped us to deliver that plan, but typically at the expense of speed, agility and cost efficiency.
With the use of Agile methodologies and lean principles and tools we were trying to commit ourselves to new ways to deliver value and eliminate waste to help clients reduce costs and improve quality, speed and business agility.
But moving beyond a few successful experiments is a challenge. You can always count on a group of enthusiasts that will help to promote lean tools, but for a real transformation you can’t count just on them. People take time to change their mental models, and that demands not only training, but also coaching. Another challenge we faced was making improvements stick and resist the test of time, and implementing a solid process of improvement (kata of kaizen) has been key for us in that regard.
Finally, we are an outsourcing company, and using lean changes not only how we operate internally, but also how we collaborate with our clients. And we are talking about a higher level of collaboration, which requires a shared purpose with our customers.
Today, 100% of our production is based on lean, which has eventually also influenced HR, our view on leadership and our organisational chart. In production itself (application services and soft ware product engineering) lean led to a complete review of our production system, which is now based on four pillars: high performance teams; engineering and value governance; adaptive planning and visual management; continuous improvement.
Over the last six years, we have seen significant progress in all the indicators traditionally used to measure performance in the IT industry. Productivity (cost efficiency in production) improved on average by 40%, and our quality indicator improved by almost ten times. The speed of the process is measured in terms of the average cycle of activation value. This cycle fell in this period of four months to 4-6 weeks on average.
Another indicator is the percentage of “smart” cost reduction we achieved through value engineering, which now stands at around 25%.
Although we still see gaps (and therefore opportunities) in the use of lean in production, we believe that incorporating lean in our management processes and further develop our improvement and coaching processes are the next stages on this journey. On the management front, for the last two years we have been using hoshin kanri and A3 thinking as the basis of our strategic PDCA cycle.
LEAN TO THE BONE
With 58 plants in Brazil and approximately seven million birds processed every day, BRF – Brasil Foods has learned what lean can do for its production lines. Eldo Curtarelli, Manager of Innovation and Process Excellence, discusses the food giant’s journey.
Our raw material is alive, and our slaughtering plant never stops. Keeping live stock unprocessed for too long is a huge cost for us, but at the beginning we weren’t even sure lean would apply to our processes. We had some initiatives in place, but they never proved sustainable in the long term. Clearly there was waste we didn’t see, so in August 2009 we decided to try to apply lean principles to one of our lines in one plant.
By simply treating waste, and with the same people, process and production mix, we recorded a 20% increase in capacity. We now have eight plants adopting lean in some of their lines, next year it will be 12. Additionally, in 2013 we’ll have our first “door to door” lean plant.
The first step we always take is identifying waste – workers oft en don’t see it. Then we provide our people with some tools and challenge them to use their knowledge and creativity and become problem solvers. Western culture sees the manager as a superhero, the only one that can solve all problems, but the truth is we don’t need superheroes if we get our workforce (the real specialists) involved, engaged and with this “problem solving mindset” activated. It’s not easy: it still takes us nine to twelve months to instil the process in people’s minds.
The way we’re doing lean is not top down, so we oft en struggle to convince and get managers on board. We’re oft en going directly to employees and supervisors. However, we are now organising special events to show managers what benefits lean can bring – preparing them to sustain lean as a long term commitment.
The essential concept behind continuous improvement is involving and taking care of our people. Here’s an example: newly hired staff used to wear caps of a different colour, but this meant that they oft en ended up feeling self-conscious when they realised they weren’t as efficient as more senior employees – they thought they weren’t as good, and many of them left the company. We changed that right away.
The benefits of an empowered workforce are great. Besides considerable improvements in capacity (20 to 25% in the first two plants that went lean), we have seen the gradual elimination of overtime and a 50% average reduction in downtime. We also recorded good results in yield on the deboning line: only by using and spreading the knowledge and skills already in the plant we were able to reduce the amount of meat that needs to be separated from the bones by over 55%.
We identified the best performer, and asked him to stop working in the deboning line to be a teacher. Like when you learn how to write, you start with small exercises (letters, not entire sentences) and practice endlessly – aft er two weeks of training, our workers have learned the best way to perform the task at hand. Our role as leaders is to facilitate learning, aft er all.
Gece Reno, Supply Chain Services and Lean Manager, Customer Order Fulfilment, at 3M Brazil gives LMJ a brief overview of the multinational corporation’s lean operations in the South American country.
Roberto Priolo: What’s the size and structure of 3M in Brazil? Within this, where is lean applied?
Gece Reno: 3M has seven plants in Brazil, with 4,200 employees. Total sales in 2011 were US$1.1 billion. The company has 14,200 SKUs in six “big businesses”. Lean is being implemented in five of the seven plants, as well as in office processes such as customer care, finance, logistics, PPC, and import and export.
RP: When did 3M’s lean journey start? What were the problems you wanted to overcome?
GR: It started in 2002 when 3M was facing the challenge of doubling its inventory turns. We started with pilots, and in 2004 we had a complete VSM. Two years later we started with office processes and now lean is deployed throughout the company. The main tools we applied were VSM, pull, 5S, quick change over, standardised work, internal logistics and visual management.
RP: What difficulties have you encountered in trying to implement lean?
GR: Change management is a major problem. People must be involved since the very beginning, so that they understand it is to make their work better, with less waste, more value for customers and increasing company profits that we are implementing lean thinking. Middle management and more senior employees are the ones that criticise the company’s lean efforts most, because in the past they saw TPM and total quality management come and go, and they believe that with lean it is going to be same.
RP: What results have you seen so far?
GR: With kaizen activities in six sites and 3,000 employees in training, our productivity has increased from 15 to 55%; setup time saw reductions of 10 to 80%; lead ti me was reduced by 20 to 45%; quality problems were reduced by 20 to 70%.
RP: Do you think there is a different culture approach to lean in Brazil compared to other countries? Does local culture impact on the way lean is implemented?
GR: For sure. Brazilian people are always open to new ideas, but discipline is not our strongest feature. We should focus more on follow up activities, coaching and training (the kata process). For that we have a deployment model:
RP: What makes your lean journey particularly interesting?
GR: We are a really complex company, with over 14,000 SKUs and 34 business areas. The mainstream culture is to send pre-formatted models that branches need to follow, but for 3M it´s different: all countries with 3M operations have to work on targets on productivity, safety and quality, but the way those targets are going to be met can diff er from country to country. This “freedom” allows us to concentrate our efforts on what we think is really required.