This article: The long Lean journey of Auping
|Lean: The value adding organization|
Craftsmanship and efficiency can coexist
The long Lean journey of Auping: ‘Everybody feels the customer’
By Dr Jaap van Ede, editor-in-chief Business-improvement.eu, 10-02-2016. This article is available in Dutch on Procesverbeteren.nl
At the Dutch bed specialist Auping, mesh bases, bed houses and mattresses smoothly move through the factory. Everywhere the customer is visible: at each production step, the employees can see for whom a product is made. A warehouse for finished products Auping doesn't need anymore. The entire output of each production day is loaded into trucks immediately. The company shows that it is possible to preserve the craftsmanship of a family business, after a transformation to a truly Lean business.
How did they do that? The first success factor is perseverance: In a Lean journey of ten years and in four stages, this preliminary end result was achieved. During the first stage, Auping experimented at one place with Lean. Next, a period of freely improving by everyone, everywhere followed. After this, the emphasis shifted to structuring and aligning. In the fourth stage, Auping switched company-wide to demand-driven production.
The second success factor was the centralization of all production activities at one location. This not only meant less transport. In addition, everybody now sees immediately which problem the next production step faces, when for example a takt time is not met. Besides this, a critical mass for a Lean culture was created, in which everyone learns from each other.
Auping during their early years: they started as a smithy, more than a century ago
Earlier, a bit upstream in the production chain, those steel frames were welded together, starting from cut to size steel profiles. Legs and other accessories are laterally inserted in the production stream much later.
Operations director Harry Gruben (on the left) and logistics manager Arno van Ingen
Robotics and ICT are used wherever this is convenient. Smart industry - digitizing the process from order to delivery - is however not a guiding theme. 'We think that smart people, who help to make the materials flow, are far more important. Without those people, nothing becomes smart.´
The work in the sewing shop has remained traditional, but the organization around it changed significantly. Mattress-covers now flow from production step to production step, with hardly any intermediate stock.
The third flow in the factory, besides that of steel and textile, is that of wooden materials. In this part of the factory, housings for the beds are made from wooden panels. I descry big sanding robots, but also here the craftsmanship did not disappear completely. For example, I see am employee crossing the t's and dotting the i's with a small hand sander.
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Some customers order only a bed base, others a mattress, and there are also customers that order a bed base with a housing and a mattress. 'Until the expedition the flows of metal, textile and wooden products are independent from each other. However, all things for one specific customer must be ready on the same day. This is the most important reason why we need this buffer of finished goods.'
I'm impressed. The similarity with an assembly line of for example a large truck manufacturer like Scania is striking. At Scania, all components flow seamlessly together to form complete trucks, without any waste or loss of time, and every production step obeys to the rhythm of the 'takt'. This 'car factory for beds' of Auping surely is one of the 'leanest' mid-sized family businesses in the Netherlands I have ever seen.
How did they make it that far? I think there are two reasons. The first one is perseverance: the Lean journey of Auping lasts already ten years. The second is that Auping centralized all production activities in one big factory. That worked out extremely well.
The modern factory hall of Auping today
Besides this, the customer wasn't visible anywhere in the factory. 'All finished goods where stored in a big warehouse. Nevertheless, our delivery times were long. We did have a stock of fast moving products, but even then most beds were already produced to customer order. The warehouse functioned mainly as a buffer. It absorbed the difference in production time of the three factories. That made it possible to send orders in its entirety to customers. For example, in the steel factory the throughput time was no less than four weeks.'
In Lean terms, you could say that there was a lot of waste, in the form of non-value adding activities like transport and storage. 'The situation became even worse when Auping acquired a box-spring factory in the city of Eindhoven, at a distance of about 80 kilometers from Deventer. Parts for the box springs now had to be transported to Eindhoven, were built-in there, and after that the box springs were transported to Deventer to be shipped to the customers, along with other components for their desired sleeping systems.'
The entrance of Auping
Despite this remarkable result, it took until 2009 before Auping decided that Lean would become the preferred improvement method at all production locations. The advent of a new COO, Frank Auer, who was succeeded by Harry Gruben later, induced this.
After a brief reorientation Auping decided that outsourcing their production was not a good idea, and that the production would remain in the Netherlands. 'At the same time we concluded that this would be possible only if we could distinguish ourselves in the eyes of the customers with short delivery times and high quality. Lean manufacturing is the way to achieve that.'
Stage 2: Improve freely everywhere
First, all departments were trained in the basics of Lean. FME was involved as consultancy partner. At the end of each training, Lean improvement boards were introduced, and the employees were asked to make improvements themselves. 'We felt it was important that they started immediately, and put into practice what they had just learned. This resulted in a high level of involvement, and little resistance to changes.'
One year later, on some places only a little had happened. On other places huge improvements were visible, like for example a production line with takt times.
To prepare for the next stage, a number of leaders in the field of Lean, like Scania and Nefit, were visited as a benchmark.
The two main pillars of the new Lean house became 'demand-driven work' and 'first time right'. In the middle there are four things that should improve every step you take: safety and sustainability, quality, reliability of delivery, and cost. Interestingly, sustainability is specifically mentioned, see also the box cradle-to-cradle. Building blocks with principles like 'go and see for yourself' and 'experience what is happening' emphasize the practical line of approach.
The base of Auping's Lean house contains conditions. These conditions have to be met to make it possible to improve at all. Examples of those conditions: customer first, respect the employees and their skills, and last but not least: standardized methods. After all, if you can not see deviations, you cannot improve. 'We started with that aspect: standardization'
In the office of Auping this circuit was built, to stress the importance of demand driven production! The white cloud (top left) illustrates the large number of bed versions the customers can order.
From that moment on, takt times at production lines gradually became common. However, the why was still missing: the customer! To this end, the production had to become demand-driven everywhere in each factory. Everyone should become aware for which customer they are producing right now, and they should feel what happens when they do not achieve a certain takt time!
Stage 4: Demand-driven production
Having all production activities at one central location strongly reduces the need to move materials. Nevertheless the question arises if this is required to make the production demand-driven. Scania for example, the former employer of Gruben, operates smoothly with a network of factories. These factories are logistically so closely connected, that it seems if rivers of truck components come together at the assembly lines. 'Scania also combines factories whenever possible', responds Gruben. 'That way, Södertalje in Sweden has grown into what you could call a Scania village. Besides this, the market for the trucks of Scania is more international than ours. Therefore they simply are not able to merge all their factories at one place. We thought this would be necessary in our case, to achieve three goals: less waste, demand-driven production without a stock of finished goods, and finally: a critical mass of Lean thinking people.'
No warehouse anymore
Many building blocks
Despite the advent of modern production methods at Auping, there is still room left for craft work
Now, it turned out why having all production activities at one location was such a good idea. The people that make the mesh bases understood immediately what happened when they didn't keep to the production plan and the corresponding takt times. 'It was nice to see that they proposed solutions themselves, to prevent delays in future. For example the use of pallets, to make picking of materials easier, and placing tools at fixed locations, conform 5S. The people now experienced themselves why the five principles for standardization are needed and appreciated these more.'
When you are all work in the same factory, you learn from each other anyway. "We not only have daily kick-offs meetings for each production line, on a higher level there are also operations-wide gatherings, to discuss best practices and problems. If you want to show something to others, it is now very easy to walk to a particular part of our plant.'
Stage 5: Lean Enterprise
Securing the results of improvement actions, to prevent reversion, will also get more attention. 'And we also want to add strategic aspects, like selecting what improvements have priority. These priorities can then be translated into local key performance indicators. Then, everybody will know how he or she can help to reach our most important goals.'
The bed mesh bases are also used as fences in the factory.
Cradle to cradle
The application of storage of heat and cold in the soil contributed a lot to the reduction of the energy consumption. Examples of other things that contributed are the use of sawdust briquettes to heat a furnace, the smart capturing of daylight and the use of residual heat to warm the offices.
When the layout of the new plant was developed, attention was given to many details. For example, the drying kilns were designed as small as possible, and heat is recovered.The sustainability program runs separate from Lean, but the programs overlap. For example, when deciding if a certain Lean improvement action can be implemented, the effect on the environment is taken into account.
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