Schneider Electric, Peru Operations, Peru, Ind.
Employees: 529, union
Total Square Footage: 392,000
Primary product: Electrical panelboards
Start-up: 1920
Achievements: Implementation of 5S principles contributed to a 47% reduction in medical incident rate. Lean and Six Sigma improvements resulted in 28% increase in productivity over the past three years.
Kyle Hamm chuckles when he stops by a bin labeled "Aluminum Cans" on the bottom rack of a computer terminal where customer orders are generated to produce a line of Square D electrical panelboards. Hamm, senior manufacturing manager for the Peru, Ind., plant, is laughing because he knows that to an outsider, labeling such nonessential items may seem a little excessive.
But for Schneider Electric's Peru operations, part of $14.5 billion Paris-based electrical equipment manufacturer Schneider Electric SA, consistent labeling throughout the 392,000-square-foot plant is part of the plant's lean 5S philosophy of visualization, standardization and order. "You have to go to extremes to get your point across about labeling," Hamm says as he walks through the facility.
Anything to reduce waste is critical since 85% of the 2,200 lighting and power panelboards Schneider assembles and ships each day to commercial and industrial markets are customized orders.
Perhaps the plant's success can be attributed to its 97% on-time delivery rate in 2005. One of the ways the plant has been able to accomplish this is by minimizing production workers' non-value-added movements by implementing visual controls, such as labels, reconfiguring workstations and deploying a water-spider route.
On the kitting line, for instance, where workers select parts for a specific order, parts bins are labeled with the required number of pieces on the front and back sides so the water-spider -- a plant-floor worker who replenishes materials on a regular frequency -- can fill the bins from either side. The goal: "Kitters never run out of parts," says Kristen Workman, the plant's manufacturing engineering manager.
In addition, labels for the bins that carry the breaker switches are color-coded to prevent mix-ups; previously, the breakers were only identified by an inventory code that started with either the letter J or G. "Before, things were more disorganized and confusing," relates kitter Vincent Sampson as he prepares parts for the plant's NF product line. "Now everything is in order."
Move to where the plant makes its I-Line panelboards and the work area is a little more compact. That's because the assembly area was consolidated in 2005 with material racks now located within arm's reach of the production line. Previously assembly workers had to travel hundreds of feet to collect bus bars, the electrical current-carrying part of the panelboards. The plant also cut back from two three-person bus-bar installation lines to one five-person line. This, combined with other improvements, increased productivity by 30%, according to Workman.
The plant's improvements also are a testament to a solid union/management relationship, even after stressful contract negotiations last September.
"We are where we're at because we all work together and we know we have to," says chief union steward Rodney Butler. "We want to get to retirement and they [management] want to advance, so we work together and we both get to the same place."
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Five Critical Pieces
Managers at Schneider Electric SA's Peru, Ind., panelboard assembly plant believe they have taken 5s to a new level. 5s -- which stands for sort, shine, set in order, standardize and sustain -- is used by many facilities to create a clean and orderly workplace, but at the Peru plant, 5s is the cornerstone of its lean philosophy.
Over the past several years, the plant had implemented several failed 5s initiatives, according to Kristen Workman, the plant's engineering manager. That changed in 2004 after Workman attended a Lean Enterprise Institute session. "They said, 'If you can't do 5s, you can't do lean,'" she explains.
So instead of focusing primarily on the sorting and cleaning aspects of 5s, the Peru plant began using 5s as a visual-management tool. Now the plant is more focused on ensuring that employees have solid work instructions and that they understand process flow. This includes the use of value-stream maps, production-rate scoreboards and a pull-driven material-replenishment system.
"I like to tell all the zone leaders that are driving our 5s improvement that when I walk into their group, it needs to be visually apparent to me what the flow is, or what steps are being followed in any given part of the assembly process, or what the trigger is that calls for replenishment," says Kyle Hamm, senior manufacturing manager.
With this visual approach in place, the plant has reduced leadtime for its highest-volume product from 17 days to five days within the past two years. Indeed, the plant's execution of 5s has become one of its strongest attributes. It's one of the first things plant manager Robin Singleton noticed when she transferred to the Peru plant from another Schneider Electric plant in May.
"If you can take a building that is this old and 5s it and make it a showplace, as our facility is on the shop floor, I think it can be done any place. When you walk out there . . . you can tell that it's practiced and enforced every day and that employees have ownership in it because their work areas look good," Singleton says.
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