Wausau Equipment Company (WECO) is a recognized multinational brand in engineering and manufacturing of machinery for agribusiness industry.

In late 2000, the operating profit of the company declined by over 10%, due to high cost of labor and materials and due to increased work in process and finished goods inventory which was at a five year high of 30 million. This situation led the executive board of the company to direct John Stegier, president of MSD to develop and implement a comprehensive action plan to meet the goal of $2.925 million in improvements in operations. John Stegier had a prior experience of lean concepts; therefore, he was aware of the significant start-up problems faced when applying lean concepts. Hence, he involved Lean Dynamics, a management-consulting group for the implementation of lean. The company planned to undertake the lean transformation project over a time span of 39 weeks with three-improvement process cycles, each consisting of 13 weeks. After the assessment phase, performed by two consultants from lean dynamics, five lean pilot areas were formed. Eight teams, each consisting of two to four operators, one engineer, one maintenance technician, and the department foreman/supervisor were formed to analyze the improvement opportunities. Each team explored improvement opportunities by using various problem-solving techniques such as the fishbone diagram, 5 Whys, cause and effect analysis, etc. and by applying specific methodologies like Single Minute Exchange of Die to reduce setup cycle time. The results achieved were part rework reduced by 70%, throughput time increased by 35% and OEE increased by 65% by the end of first process improvement cycle. (a) From the data presented in Appendix 1, we conclude that idle Time, planned downtime and setup time are responsible for about 50% of the losses. Therefore, the Management at WECO needs to resolve these three key issues to reduce the lead-time from 16-22 weeks to 10-12 weeks, which in turn would improve their overall performance. The following lean concepts should be incorporated at WECO. LEAN CONCEPTS | ADVANTAGES | 5S | Efficient manufacturing process | Poke Yoke and Jidoka (quality at source) | Improves throughput performance and boost employees morale | JIT | Reduces Inventory | Kanban Cards (pull production) | Reduces cycle time | One piece flow | Reduces batch size | Heijunka | Levelling of production | SMED (Single minute exchange of die) | Reduces setup time | Value stream mapping | Easy identification of value added steps. | TPM (Total productive maintenance) | Zero breakdown, Zero defects, Zero accidents | Kaizen | Helps to sustain improvements | (b) In order to successfully implement lean strategies in the organization, the company should work closely with Lean Dynamics. The first step would be to perform value stream mapping, generating the process map of all the activities according to the actual path of the manufacturing process. Subsequently, eliminate all the non-value added activities. This would result in the direct reduction of the cycle time. The second step should be aimed at eliminating any unnecessary motion of the product within the plant. This may require redesigning of the plant layout to product or cellular layout to ensure that movement of the product is minimized within the plant. Also, all the processes requiring common resources have to be relocated close to one another to have efficient uses of resources. And simultaneously, the management should perform

5S at WECO. The next step should be to reduce the setup time of the equipment by implementing Single Minute Exchange of Die, the reduction in the setup times will help reduce the batch size of system and would automatically assist in the implementation of Pull system where the demand drives the production. All these lean concepts would result in reduction of the total work-in-process inventory. Upon reduction of the setup times and the cycle times, optimization of production is the next key step for WECO. Heijunka principles should be applied to use the idle time of different processes effectively, while also ensuring that the flow of each product variant is constantly maintained. The next step at WECO should be to improve OEE by implementation of Total productive maintenance (TPM). WECO has to identify the possible causes for the equipment downtime and minimize their occurrence by performing scheduled and corrective maintenance. Most importantly, to maximize the benefits derived from lean strategy, the management at WECO should implement these lean concepts across the whole value stream. Support of employees is the most important factor in successful implementation of lean. Therefore, employees should be trained on the importance and benefits of lean manufacturing. They should also be given an active role to play in its implementation and should be appreciated from time to time for their efforts. While the direct benefits of lean implementation are reduced cycle time, reduced inventory and reduced costs, indirect benefits of lean implementation would include increased employee participation and increased employee productivity. Hence, WECO should focus on eliminating the top 20% of the causes, which would in turn eliminate 80% of their problems. WECO should also incorporate lean principles into its work culture to sustain its benefits.

Wausau Equipment Company has improved their operating profit a lot by introducing lean strategy. The managements next step should be in making further Lean improvements. As we know, SIMPA is widely used in Lean process. SIMPA stands for Specify Value, Identify Value Stream, Make it Flow, Pull and Always Improving. These phases draw a big and long-term picture to lead a team logically from detecting the problems to solving the problems and make sure that the team can sustain the achievement and keep improving. In this case, the lean project was planned to last 39 weeks, which was divided into three complete equipment-improvement-process cycles. The first cycle focused on getting tangible improvement results while the last two cycles focused on sustainability and improvement. We can see from this plan that keeps improving bulks large in Lean Process. Someone may ask why the team still needs to make further lean improvement since theyve already finished the cycles and achieved the goal. The answer is that there is always room for improvement. In my opinion, Wausau Equipment has at least three aspects need to be improved. Firstly, Wausau Equipment needs to make more changes to its culture. As it is known to all, enterprises culture is the basic impetus of development of enterprise. In some aspects, culture and management are more important than the actual tools and methodologies of production itself. Only if the culture absorbs the philosophy of lean, the achievement of Lean Project can sustain. Stephen Shortell (Professor of Health Services Management and Organization Behavior- Berkeley University, California) states For improvement to flourish it must be carefully cultivated in a rich soil bed (a receptive

organization), given constant attention (sustained leadership), assured the right amounts of light (training and support) and water (measurement and data) and protected from damaging." However, in this case, although the executive board had asked Steiger to develop a new action plan, there were still top-to-bottom skeptics. The Vice President of Operations Jim Patterson was an example. He was reluctant to play an initial active leading role and give the team praise. On the other side, there was widespread low employee morale in Wausau. For such situation, my recommendation is listed below. 1, Wausau Equipment should customize Lean theory to their culture. Lean theory will challenge most of the traditional values. The natural reaction will be the resistance to change, not to mention that Wausau had a culture, which was generally suspicious of change. Just as Kaizen theory mentions, Wausau Equipment should not expect a onestep change. The improvement should be gradual but continuing. Wausau Equipment need to identify the value of both sides carefully and take the essence and discard the dregs. 2, Training and mentoring is indispensible for not only employees but also the executive board. All people in the company should accept the lean concept. Employees should at least know what they are doing. The executives need to learn to make decision with lean philosophy. And they should be open to others new ideas. Secondly, Wausau Equipment needs to improve along with the demand of customer continuously. Lean aims at eliminating all the non-value added things. And the value added things are things customers are willing to buy. Demand of customer is always changing. Improving the flow of material through new ideal system layouts at the customer's required rate would reduce waste in material movement and inventory. In this case, increasing plant flexibility to meet variability in volume and mix demand has been one of the objectives of Wausau Equipment. They need to continue improving. What is more, Wausau Equipment should evaluate its product to balance the customers demand and the productivity of plants, because lean is about more than just cutting costs in the factory. It is said that one crucial insight is that most costs are assigned when a product is designed. Thirdly, the information system should be improved. Wausau should make not only material and people but also the information flow. It is mentioned in the case that the MSD organization did not have firsthand knowledge of the progress made. Most of the MSD organization remained unaware of what was going on in the production shops. The information gap will lead to misjudgment, improper plan and even the imbalance between demand and supply. Thus information system strengthening should be in progress as soon as possible. There must be still many aspects that I did not realize need to be improved. A good lean manager will spare no effort to look for possibilities for improvement. Wausau Equipment should be in the lean process cycle and improve again and again. Work cited 1. Lean form Wikipedia, web, 5th Mar, 2011, http://en.wikipedia.org/wiki/Lean_manufacturing#Continuously_improve 2. Thinking of Lean Manufacturing Systems, By Akin O. Akinlawon, web, 5th Mar, 2011, < http://www.sae.org/manufacturing/lean/column/leandec01.htm> 3. Practical Lean Accounting, By Maskell & Baggaley, Producivity Press, New York, 19th Dec, 2003, web, 5th Mar, 2011. < http://en.wikipedia.org/wiki/Lean_manufacturing >

-------------------------------------------[ 1 ]. Lean form Wikipedia, web, 5th Mar, 2011, [ 2 ]. Thinking of Lean Manufacturing Systems, By Akin O. Akinlawon, web, 5th Mar, 2011, < http://www.sae.org/manufacturing/lean/column/leandec01.htm> [ 3 ]. Practical Lean Accounting, By Maskell & Baggaley, Producivity Press, New York, 19th Dec, 2003, web, 5th Mar, 2011. < http://en.wikipedia.org/wiki/Lean_manufacturing >

Lean has had some success at Wausau. What should the managements next steps be in: a) Making further Lean improvements Wausau is facing a shortage both in experienced labor and reliable equipment. They rarely hire new employees, and older employees are close to retirement. Furthermore, Wausau generally has a culture suspicious of change, and employees and managers are resistant to Lean progress. Employees are not motivated to accept lean or previous management methodologies because of the feeling of insecurity, and employee morale is low. Wausau is facing other challenges as well. Along with the labor issues, equipment downtime is increasing, and OEE is decreasing. Also, inventory is high, and the company even lost some customers because of slow response time and poor delivery service. The high volume of inventory takes resources in cash flow, maintenance labor, space and operations management. To reduce WIP materials, the Kanban system could be introduced for inventory management. The Kanban system is easy to install and understand. It responds to MSDs demand without taking much extra resource or labor. Wausau is also experiencing issues with the manufacturing process. Figure 1 shows major areas of total loss. Figure 1 Figure 1 According to Figure 1, setup time, idle time engineering or qualification losses and rework or scrap contribute 73.53% to total losses. According to Appendix 1, SU loss has been reduced by 0.5 out of 1.8 hours per shift, Idle time has been reduced by 0.2 out of 0.56 hours per shift, respectively. OEE at present is 60%. There is space for further improvement. The consulting company, Lean Dynamics, deployed lean process in short terms so that employees can be convinced of its power. However, further improvement requires the lean improvement cycle to be implemented over time. Because Lean has been proved to be effective in MSD, Wausaus next step should be expanding lean thinking to other divisions. Part rework is reduced by 70%. According to the running chart, at one point, rework is only 1, compared to 365 before Lean was introduced, but the tendency is unstable. To sustain its achievements, Wausau has to continue LPs 20-week project and meld it with its own culture. No operator/staffing, schedule imbalance, return compacts and oversize holes are the starred items in figure Idle time possible causes. No operator/staffing and schedule imbalance can be eliminated by re-planning process layout. Return compacts and oversize holes are concerned with quality. MSD should deploy quality at the source in its manufacturing process. Quality at the source can keep production activities at acceptable value added level.

What should the managements next steps be b) In the implementation of Lean? The current lean implementation is assisted by Lean Dynamics. However, to make continuous improvements, Wausau Equipment Company has to train its staff to think and work in lean methodology, starting with Vice President Patterson. Patterson and his MSD had an unsuccessful experience with another consulting company, which lead to his reluctance and biased view of lean thinking. The Lean Journey has achieved significant success in reducing part rework, which is an important index of quality (rework/scrap contributes 11.76% to total OEE loss). Wausau should track the result of lean process and recognize its success to show what it has accomplished so that managers and employees can be inspired to continue working on lean process. It is noticed that most MSD did not have firsthand knowledge of the process. Defining each employees work responsibilities should be the first step to further improvements. To keep its employees motivated, Wausau should statistically interpret Leans accomplishments into recognition of each divisions effort.

Wausau had distinct success with Lean strategy and methodologies. Having said that, there is always room for improvement and the key to maintain high productivity and loss reduction is by continuous improvement. In Wausau Equipment company, the timeline for lean project was laid out to last 39 weeks and divided into three cycles of equipment-improvement-process. The 39 week implementation, however, was majorly carried out by the consultants from Lean Dynamics. Furthermore, the top management was skeptic with Lean Process. In other words, there is lack of Lean knowledge and other various culture limitations, which could be impetus of further improvement of the enterprise. So the first action of making further lean improvements would be culture change in the organization, which not only absorbs lean philosophy but train its staff and assign every employee's work responsibilities.