How to Mold a Lean Culture within the Plastic Industry

Lean Six Sigma/continuous improvement methodologies have a long-standing history within the plastic industry. During our consulting practice throughout the years we have observed substantial financial benefits in terms of labour maximization, efficiency, scrap reductions, and quality improvements with an associated increase in customer satisfaction rates. The implementation of Lean manufacturing techniques within the plastic industry has increased exponentially, to the point of becoming a ‘must requirement’ for those plastics companies that wish to remain competitive.

What is Lean?

The lean methodology was developed with the ultimate goal of reducing costs and increasing efficiency by identifying and eliminating activities in a given process (service or manufacturing) that fail to add value and yet consume resources. In the lean terminology, value is defined as ‘what the customer is willing to pay’. As a result, lean is heavily oriented not only to efficiency and cost reduction but also to creating value to ensure customer satisfaction.

On the other hand, Six Sigma is a system developed with the goal of controlling variation and making processes more consistent and reliable to ensure the quality of deliverables. The combination of Lean with Six Sigma results in a faster creation of value at the lowest possible cost.

Lean/Continuous Improvement within the Plastic Industry

During the last fifteen years, our consultants have been working with several companies in the plastic industry and have obtained hands-on experience with the most common operational challenges in this sector. These challenges would normally vary for each sub-sector, which we have categorized into three main groups:

1. Plastic Molders: including injection, blow molding, rotational molding, extrusion, compression, thermoforming, etc.
2. Tooling & Accessories: mold makers, hot runners, temperature control units, etc.
3. Plastic Processors: resin manufacturers, recyclers, compounders, and pelletizers.

Nevertheless, we have noticed that there are some operational challenges that appear across the three categories. Some of these challenges are related to poor labour utilization rates, poor operational efficiencies, excessive redundancies within the process, and the existence of ‘hidden factories’ to fix defects or quality issues that are typically unknown to supervisors and managers but not to front line workers.

Some of the most frequently used KPIs (key performance indicators) to monitor these operational challenges include labour costs (regular vs overtime), OEE (overall equipment effectiveness) or downtime, RTY (Rolled-Throughput-Yield), inventory costs, WIP (Work in process), scrap rates, and customer complaints.

Our clients have successfully addressed their operational challenges with the implementation of lean tools, of which there are many examples

• Process mapping: in its multiple forms, this involves value stream maps, swim lanes, process flow maps, spaghetti diagrams, etc. These tools are extremely powerful to visualize transportation, motion, process redundancies, bottle neck, WIP, delays, and defects.
• 5S (or 6S for Safety): this fundamental and inexpensive lean tool has helped our clients with workplace organization, which resulted in substantial gains in labour utilization as well as the minimization of motion and transportation.
• SMED or rapid change over: this tool has repeatedly proven to be crucial to reduce downtime and to significantly increase OEE.
• Poka Yoke (or Error Proofing) with Kanbans and visual management techniques have delivered very meaningful value while increasing RTY rates, reducing the recurrence of defects, and improving internal communications, among other benefits.

One case study that we have recently come across during a Lean Six Sigma Green Belt training for a manufacturer of extruded corrugated HDPE pipes was related to the increment of their production capabilities. One of the extrusion lines was operating at 85% capacity, and any attempt to increase this ratio would have resulted in a significant increase of pipe defects (e.g., holes or significant wall thickness variations). After conducting a root cause analysis with a fishbone diagram, followed by a pareto analysis, we were able to narrow down the root causes. These analyses showed that the main cause of increased defect rates above the 85% line capacity was related to deficient thermal transfer from the extrusion mold to the molten HDPE. The addition of a temperature control unit to this line overcame this issue, leading the line to operate at 100% capacity while increasing annual sales by over $1M.

In addition to this, setting up a statistical process control system (SPC) is of paramount importance to determine process capability, and indicators such as Cp and Cpk or Pp and Ppk. This powerful tool will be extremely instrumental for determining further process improvements, the Sigma Score of your process, the defects to be expected and, as a consequence of this, the financial benefits that you can expect to achieve when improving that process. Undoubtedly, this type of improvement in your process will also deliver higher rates of customer satisfaction. During our consulting practice we have observed a wide range of examples of critical to quality (CTQ) variables within the plastic industry that need to be monitored in a process capability analysis. Some of the most common examples include critical dimensions with specified tolerances (wall thickness, diameters, lengths, depth, etc.), cycle times, and pigmentation and concentration of chemicals within a resin, to name a few examples. However, there are further statistical tools that have successfully delivered significant benefits to operations within the plastic industry, such as correlation analysis, regression, statistical predictions, hypothesis testing, and many more.

Lean Six Sigma Training & Implementation

At AMSaxum we provide onsite corporate training on lean six sigma/continuous improvement methodologies and help our clients with the implementation of process improvement projects. There are Government grants available in Canada and the USA to cover the cost of corporate training.

In addition to the tangible benefits possible through lean, the research and development efforts (labour, materials and subcontracts) required in the plastic industry could be eligible to be recovered through government funding, such as through the Scientific Research & Experimental Development (SR&ED) program in Canada.

For companies in North America, specifically, there could be applicable grants to aid in upfront costs such as capital investment and employee training. AMSaxum experts in government funding help with the application of these grants and with the preparation of SR&ED claims.

There are additional tools that can aid in improving overall efficiency, such as an RCCA labor tracking solution we offer, which is an application for collecting data or for tracking labor or KPI efficiency.

For more information on continuous improvement and Government funding within plastic industry call AMSaxum at 905-315-6847 or contact us here.