ANALYZING AND OPTIMIZING THE BUSINESS PROCESSES OF UNIVERSAL CORRUGATED B.V.

USING LEAN MANAGEMENT BACHELOR THESIS

REBECCA VAN DAPPEREN INDUSTRIAL ENGINEERING & MANAGEMENT (S1570080)

Supervisor: Dr. Ir. J.M.J. Schutten

APRIL 23, 2019

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Preface Currently, you have my bachelor thesis “Analyzing and optimizing the business processes of Universal

Corrugated B.V. using Lean Management” in front of you. In this research we have taken a look into

the business processes of Universal Corrugated B.V., located in Almelo. We first identified the

problems within the company and then, using Lean Management, we determined how we could best

solve these problems and optimize the business processes. Due to time being, we focused on one

business process in detail, namely the process between sales and engineering. However, we also

gave global recommendations how the company can optimize the other business processes.

The reason I started this research was because I wanted to get experienced with a real

company and apply the theory I learned during my study to this specific company. I had a preference

for doing research in the optimization of business processes. In order to attain a good assignment, I

sent out applications to several companies and had a few conversations at different companies.

Finally, I made a decision and chose Universal Corrugated as the company to graduate. The

company’s reason to “hire” me was because they wanted a student to analyze and improve their

business processes by means of Lean Management. Lean Management is something I really like and

also one of the reasons I wanted to graduate at this specific company.

I want to thank Universal Corrugated B.V. for giving me the chance to do my bachelor

assignment at their company. I especially want to thank my company supervisor John Boshuis for

giving me good feedback and guidance during my thesis process. I also want to thank my second

company supervisor Rob Steenbergen and the other employees of the company, who were so open

during the interviews and were always accessible when needed. At last, I want to thank Marco

Schutten, my University supervisor, for the guidance with my research, and Jennifer van den Berg,

my buddy and friend, for giving me feedback and support.

Rebecca van Dapperen, 2019

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Executive summary Universal Corrugated B.V. is a company located in Almelo and specialized in stacking equipment and

sheet material systems in the corrugated cardboard and solid boards markets. The company is part of

the Minda group and one of the market leaders in the area of technical innovation. To maintain this

position, they implement continuous development and quality improvement.

Currently, the business processes do not flow as they should, which causes several problems.

The core problem of the company is the informal structure. This eventually leads to a low ROI. Also,

the quality of the end-product is too low and the lead time too long. This report describes the

business processes of the company and how we can improve the processes using Lean Management

and, ideally, eliminate the abovementioned problems.

Due to time limitations, we focused on the process between sales and engineering, as these

are the processes with the most problems. Using interviews with staff and observation, we conclude

that the communication and collaboration between the two departments does not go very smoothly.

This results in low quality documents and time waste. Waste is the collective term of all the activities

that do not add value to the company. The most common waste types are defectives and motion,

which means quality waste and inefficient work, respectively.

By answering a few investigative research questions, we answered the following main

research question:

“How can Lean Management be best applied to the optimization of the sales-engineering process at

Universal Corrugated B.V.?”

The answer to this proposed research question is that there are three Lean tools that can be

implemented at the company. These are, ranked from most important to least, Standardized work,

5S, and Kanban. The company can best apply these tools by announcing them first to the employees.

The management team needs to make clear what the benefits are for them and what the actual plan

is. It is also useful to work in teams. By applying 5S the company gets organized and the quality can

be improved. The management team also needs to write down standards for every process within

the company. These implementations eventually lead to better collaboration between the

departments, a reduced lead time, an increased quality, and lower quality costs. When applying the

tools to the other processes, the costs can decrease further, and the ROI can increase.

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Table of contents Preface ...................................................................................................................................................... i

Executive summary ..................................................................................................................................ii

Glossary ................................................................................................................................................... iv

1. Introduction ......................................................................................................................................... 1

1.1 Universal Corrugated B.V. ............................................................................................................. 1

1.2 Motivation ..................................................................................................................................... 1

1.3 The problem context ..................................................................................................................... 1

1.4 The core problem .......................................................................................................................... 3

1.5 Objectives ...................................................................................................................................... 3

1.6 Problem-solving approach............................................................................................................. 4

1.7 Limitations ..................................................................................................................................... 5

1.8 Deliverables ................................................................................................................................... 6

2. Literature review ................................................................................................................................. 7

2.1 What is Lean Management? .......................................................................................................... 7

2.2 Different Lean tools ..................................................................................................................... 10

2.3 Lean tools for the optimization of business processes in an SME .............................................. 11

3. The current situation ......................................................................................................................... 13

3.1 The company ............................................................................................................................... 13

3.2 Flowcharts of the different business processes .......................................................................... 14

3.3 Problems within the business processes ..................................................................................... 19

4. Solution design .................................................................................................................................. 23

4.1 The best optimization method .................................................................................................... 23

4.2 The best Lean tool ....................................................................................................................... 25

4.3 Conclusion ................................................................................................................................... 26

Chapter 5: Solution implementation ..................................................................................................... 27

5.1 Standardized work ....................................................................................................................... 27

5.2 5S ................................................................................................................................................. 29

5.3 Kanban ......................................................................................................................................... 33

Chapter 6: Conclusions and recommendations .................................................................................... 37

6.1 Conclusions .................................................................................................................................. 37

6.2 Recommendations....................................................................................................................... 38

References ............................................................................................................................................. 41

Appendix ................................................................................................................................................ 44

A. Organogram .................................................................................................................................. 44

B. Flowcharts ..................................................................................................................................... 45

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Glossary Business processes A specific sequence of related, structured activities or tasks in

order to produce a product or service. All processes starting from receiving an order of the client to the delivery of the end product to the customer.

Drawing package A package containing the layout (drawing) of the machine and a component list.

Dry commissioning Testing the machine without the actual product (in this case cardboard) on it.

Engineering request A document, made by the sales department, with specifications of a standard machine. However, the machines are made on customer request, thus the specifications in the engineering request need to be adjusted according to the wishes of the customer.

FAT document Factory Acceptance Test

Offer A price proposition based on the specifications of the customer request and the price calculations of the machine.

Optimization Making a situation or resource better and more effective. In this case the situation is one or more business processes.

Order sheet A document containing the order confirmation with the specifications and the signature of the customer.

ROI Return on Investment. The ratio between the company’s net profit generated by an investment and the costs of this investment.

SAT document Site Acceptance Test SME Small- and medium-sized enterprises. Businesses whose personnel

numbers fall below certain limits.

Wet commissioning Testing the machine with the product (in this case cardboard).

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1. Introduction This chapter starts in Section 1.1 with background information of the host company for the

assignment. Section 1.2 describes the motives for the research and Sections 1.3 and 1.4 contain the

problem context and a description of the core problem. Section 1.5 discusses the objectives for the

research. Furthermore, Section 1.6 states the research questions we answered during this research.

Section 1.7 describes the deliverables of the research. The chapter ends in Section 1.8 with the

limitations that we might face during the research. We conduct this research on the occasion of the

bachelor’s programme Industrial Engineering and Management (IEM).

1.1 Universal Corrugated B.V. The host company for this bachelor assignment is Universal Corrugated B.V., located in Almelo. The

company was founded in 1957 and is part of the Minda group. Universal is specialized in stacking

equipment and sheet material systems in the corrugated cardboard and solid board markets. The

company has around 40 employees who develop, produce and install and maintain stacking systems

on a mechanical, hardware and software level. Universal Corrugated is one of the market leaders in

the area of technical innovation and wants to maintain and build upon this position by means of

continuous development and improvement in quality.

1.2 Motivation The company determined that there is no good structure within the business processes. As this

causes a lot of problems within the company, which we describe in Section 1.3, this structure needs

to be improved. The company supervisor is the engineering manager and wishes to apply selective

Lean Management tools to the optimization of the business processes in order to achieve a better

structure and eventually less problems within the company. Lean Management is a method that is

best for optimizing the processes in this company, as it is a very broad methodology and covers all

aspects. Other methodologies might also work, but only cover one or a few aspects within the

problem context, while we are able to fix all problems using Lean Management. We explain the

choice for Lean Management in Chapter 4.

1.3 The problem context Using interviews with the employees and observation, we found a few problems within the company.

First of all, Universal Corrugated misses a good structure. At the moment, there is a very informal

structure, which causes problems such as lack of discipline and missing patterns. Also, the company

does not get into immediate action when a problem arises. Moreover, there is a lack of teamwork,

open communication is missing and therefore, employees do not always inform each other about

their tasks. This eventually causes many obscurities.

Second, there is a weak collaboration between the three departments at the company. We

consider a department as a part of the company. The three departments are the main offices (such

as sales and purchasing), the shop floor and the engineering offices. Employees really experience a

gap between each other. There are no official meetings, so they communicate with each other via e-

mail and sometimes, information is not received the way it should be received. This causes irritations

and lots of complaining.

Third, the shop floor employees do not get the materials they need from other departments

on time. This eventually causes long lead times and employees have to work over time to get the job

done. Also materials to be received from third parties are received later than expected and/or do not

have the right quality. The long lead times are also caused by a lack of personnel.

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The most severe problems can be explained in terms of the “triple constraint” (Quality –

Time – Budget). This triple constraint means that all projects are carried out under certain constraints

(Haughey, 2011), namely:

1. The project must meet quality requirements (Quality).

2. The project must be delivered in time (Time).

3. The project must be delivered within the set budget (Budget).

Figure 1. The Triple Constraint (Haughey, 2011)

This is also the case at Universal Corrugated. The mechanics need a long time to build the

machine. It takes around 9 months to build the machine, while competitors build a similar machine in

6 months. The machine is eventually delivered at the stated deadline in the contract, but the lead

time is longer than necessary, which causes high production costs. Also, the company does not

always meet quality requirements. They want to build the machine as cheap as possible, but this is at

the expense of the quality. It also leads to high quality costs. And at last, their Return On Investment

(ROI) is too low, due to the high quality and production costs. This low ROI is also a result of high

stock costs. The buying department sometimes buys more products than actually needed, which

means this “overload” of products must be stocked in the warehouse against an amount of stock

costs.

However, we cannot improve these three issues at the same time as there will appear some

trade-offs. If the company wants the quality to be improved, it will take more labor time to build the

machine and they probably need a bigger budget because they need to purchase higher-quality

products. If they want the machine to be built faster, they need to hire more staff, which increases

costs. Lastly, if they want to reach a higher ROI, the quality of the machine will probably drop even

more due to low-quality products and the lead time will be longer, because of less personnel.

Figure 2. Problem cluster

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The problem cluster in Figure 2 starts with the low ROI, being the main problem of this research and

the result of all small problems. The low ROI is caused by high quality, stock and production costs.

The high quality costs are a result of the low quality document being transferred between colleagues

and the low quality end-product. The high stock costs are due to the purchasing employee ordering

products while they are still in stock or not even necessary. This is in turn caused by the weak

collaboration between the departments. This latter is also the reason for the long lead time. The long

lead time is also triggered by third-party deliverers not delivering on time and a lack of personnel.

The low quality is caused by the informal structure; the management did not document the

standards, so there are no standard job instructions. Therefore, every document or end-product is

different and does not meet everyone’s expectations. The informal structure is also the reason for

the materials not being delivered on time as the management team does not put enough effort in

selecting other deliverers and do not see this as a priority. At last, the weak collaboration and

communication is also caused by the informal structure; communication often goes via e-mail and

this way, the employees do not always understand each other.

1.4 The core problem Looking at the problem context, there are actually three big problems:

1. The quality of the manufactured goods at Universal Corrugated B.V. is not always as it should

be.

2. The lead time for building the machine is longer than necessary.

3. The ROI of the company is too low.

However, these are not the core problems, but the main problems which are consequences of

the core problem. The core problem, which is the problem that causes all the other problems, is the

informal structure of the company. When there is a better, more formal structure, the best-case

scenario is that communication and collaboration within the company improves, the lead time

reduces, and the quality and the ROI increases. However, as Section 1.3 describes, we cannot reach

this due to trade-offs.

“The core problem is the informal structure at Universal Corrugated B.V.”

1.5 Objectives In this research, we optimize at least one of the business processes. For this research, we choose the

low ROI as the main problem. The objective of the research is to optimize the business processes so

that the ROI increases.

Besides this objective, the company also has some short-term, medium-long-term and long-term

objectives that can be taken in mind during this research.

Short-term objectives (1 – 12 months):

1. Making the core product of Universal stable and standard.

2. Professionalizing the pro-active approach to customers worldwide.

3. Forcing order intake regarding:

a. New machines

b. Modifications of existing machines

c. Service- / Spare-parts

4. Adjusting the capacities and the organization to the new objectives.

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Medium-long-term objectives (1 – 24 months):

5. Increasing sales of machines with 60 – 80%.

6. Increasing sales of service - / spare-parts with 50%.

7. Increasing net profit to 8 – 10% of sales.

8. Continuously adjusting the capacities/organizations.

9. Professionalizing the structure and procedures inside Universal.

10. Implementing a new ERP system in support of the organization.

Long-term objectives (2 – 5 years):

11. Developing and having a prototype of at least one new product in the existing branch.

12. Stabilizing the organization.

1.6 Problem-solving approach The most important part of this research are the research questions. Without these, we cannot fully

conduct this research. This section states these research questions, how we approach the questions,

and the deliverables of the research.

In corporation with the company supervisors, we choose one particular business process to

optimize in detail, namely the process between sales and engineering. This process is called the

“sales-engineering process” in the rest of this thesis. The reason we choose this problem is because

this is the process where most of the problems exist and these two processes experience the largest

gap between each other, regarding weak communication and collaboration. The research questions

in this section are connected with this business process. Also, we take in mind that Universal

Corrugated is a small and medium-sized enterprise (SME). Chapter 2 explains this latter.

The main research question is:

“How can Lean Management be best applied to the optimization of the sales-engineering process

at Universal Corrugated B.V.?”

The most important things to know are what Lean Management is and what the Lean tools are.

Furthermore, because of Universal Corrugated being an SME, we must find out what Lean tools

would be best to optimize business processes in an SME. We gained this knowledge by answering the

following three research questions using literature:

1. What is Lean Management?

2. What are the different Lean tools?

3. What are possible Lean tools to optimize business processes in an SME?

We answer these three research questions in Chapter 2: the literature review. Without this

information, we cannot fully conduct the research.

The first research question gives a detailed description of what Lean Management is and

what the difference is between a traditional workflow approach and the Lean approach. Also, we

explain the term “waste”. The answer to the second research question gives a list of the different

Lean tools that can be found in different types of literature. We also give a short explanation of the

different Lean tools. The third research question explains what Lean tools would be best to optimize

the business processes in a small- and medium-sized enterprises (SME).

After the literature review, we analyze the business processes at the company. We especially

focus on the sales process, the engineering process and the process of sales to engineering. We

explain these processes in detail, while we globally explain the other processes. Without knowing

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how the processes currently flow we cannot optimize the processes, as it is not clear what the

problems are within the processes. The research questions we answer in this phase are:

4. What are the current steps of the business processes at Universal Corrugated B.V.?

5. What problems exist within the business processes at Universal Corrugated B.V.?

Chapter 3 answers research questions 4 and 5. First, by interviewing the employees of Universal we

examine the different processes. Using these interviews, we give a visual representation of how the

business processes look like. Second, we use the interviews to determine what problems are known

and to which type(s) of waste we can connect them.

After we finish answering research questions 4 and 5, we choose a number of Lean tools that

are best to optimize the sales-engineering process at Universal Corrugated B.V. The research

question central in Chapter 4 is:

6. What Lean tools are best to optimize the sales-engineering process at Universal Corrugated

B.V.?

In order to answer this question, we need the answers to research question 1 to 5. We connect the

information about the different Lean tools to the company so that we can choose a number of

possible Lean tools to be used. We eliminate the Lean tools that are not useful because they have a

different purpose than needed. We compare the different possible Lean tools by means of criteria,

giving weights to these criteria, and giving scores to the different tools. This comparison results in a

table with scores and we eventually choose the tools with the best score.

The last research question we answer in this research is:

7. What steps should be followed when applying the chosen Lean tools to the sales-engineering

process at Universal Corrugated B.V.?

We answer this question in Chapter 5. To find out what steps we should follow in order to improve

the sales-engineering process at Universal Corrugated with the different chosen Lean tools, we do

some literature research about these specific tools. This results in steps to follow in order to optimize

the sales-engineering process at Universal.

Finally, Chapter 6 addresses the conclusions we are able to draw from the research. This

means we give a short summarizing answer to all research question in order to eventually answer the

main research question. The chapter also includes our recommendations for Universal Corrugated

regarding the optimization of the sales-engineering process, but also regarding the optimization of all

other processes in general. We also tackle the core problem and how the optimization of the

business processes can lead to a higher ROI for the company.

1.7 Limitations There are a few limitations and constraints connected to the research. At first, the goods needed for

the shop floor employees do not always get on time. However, we cannot control this, as this is a

third party deliverer that we cannot influence. It is still possible that this has a negative influence on

the outcome of the process and the ROI.

We should also keep the time restrictions in mind. We conduct this research in twenty

weeks, of which ten weeks is the preparation phase. This means that we need to do the actual

optimization in ten weeks. We are not able to test many solutions, but we have to choose the ones

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most valuable for the company. Also, we are not able to fully implement the solution. Therefore, we

give the company recommendations on how to best improve their business processes.

1.8 Deliverables At the end of this research, there will be a few deliverables:

1. Visual representations of the current status of the different processes.

2. Recommendations about how to best implement Lean tools to the optimization of the sales-

engineering process.

3. Some global recommendations about how the other business processes within the company

can be optimized using Lean.

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2. Literature review This chapter describes background information about Lean Management and the alternatives for

Lean Management (Section 2.1) and the different Lean tools (Section 2.2). Also, Section 2.3 gives

information about what an SME is and describes what Lean tools we can best apply to the

optimization of business processes in an SME. This information is needed in order to fully understand

the rest of the thesis. This chapter answers the following research questions:

1. What is Lean Management?

2. What are the different Lean tools?

3. What are possible Lean tools to optimize business processes in an SME?

2.1 What is Lean Management? Lean Management was originally called “just-in-time” when it was adopted in Japan. Besides being

an improvement approach, it is a philosophy of how to run, plan and control operations. It aims to

meet customer demand with perfect quality and minimum to no waste. In order to achieve this,

products and services supply must be in a fit-for-use synchronization with demand for these products

or services. Therefore, it is also called Lean Synchronization (Slack, Brandon-Jones & Johnston, 2013).

The flow of items which includes services and products must always deliver exactly what

customers want, in exact quantities, exactly when needed, and exactly where required. Using Lean,

this must be achieved at the lowest possible cost. This eventually results in items flowing smoothly

through process, operations and supply networks.

According to Slack et al. (2013) the key elements of Lean Management when used as an

improvement tool are:

• Customer-centricity;

• Internal customer-supplier relationships;

• Perfection is the goal;

• Synchronized flow;

• Variation reduction;

• Include all people;

• Waste elimination, which we further explain in Section 2.1.2.

2.1.1 The difference between the traditional Lean approach and the current Lean approach Lean Management differs from its traditional approach when managing flow. In the traditional

approach of Lean Management, thus when the method was first introduced, Lean was “relatively

radical” and production was aimed at high volume (Slack et al., 2013). Figure 3 visually shows the

description below.

The traditional Lean approach places the output of each stage in a “buffer” inventory, so that

the next stage can take these outputs and pass them through to the next buffer inventory after

processing them. This results in each stage being independent and able to continue for a while in

case a certain stage stops operating. Unfortunately, this approach results in inventory costs and slow

throughput times, as items will spend time waiting in the buffers. Also, when a stage stops operating

due to a problem, the problem will not immediately be apparent to the other stages. This means that

solving the problem will be centered mainly on the people working in that stage.

In the current Lean approach items are directly passed to the next stage after being

processed. Outputs are not stored in buffer inventories which results in an increased chance of

improved efficiency. When a problem occurs in a certain stage, this problem is exposed to the whole

process. The problem is shared by everyone which improves the chance of the problem being solved

as it is too important to be ignored. The problem must be solved for the process to move on. The

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starting point of this philosophy is the customer who “pulls” items through the process and

encourages to let the items flow through the process in a synchronized matter. This means that

products are not made to stock them (push-principle) but are only produced when the customer asks

for the product (pull-principle). The stages are not separated, which increases employee motivation.

This improved motivation leads to less waste. Unfortunately, these benefits do come at the cost of

capacity utilization. A stage stoppage will affect the whole process, which leads to lower-capacity

utilization in the short term.

Figure 3. (a) Traditional and (b) Lean synchronized flow between stages (Slack et al., 2013)

2.1.2 The elimination of waste Lean Management focuses on the elimination of all forms of waste. Waste is “any activity that does

not add value” (Slack et al., 2013). Using the Japanese terms of the Lean philosophy, we describe

waste elimination. Muda, mura and muri are three causes of waste that should be eliminated.

• Muda are wasteful activities that do not add value to the operation or to the customer. The

main causes of these activities are poorly communicated objectives of inefficient use of

resources.

• Mura means “lack of consistency”. It is unevenness that results in a periodic overload of staff

or equipment.

• Muri means unnecessary or unreasonable requirements in a process that will result in poor

outcomes. Appropriate skills, effective planning and accurate time estimation will avoid this

muri.

Besides the three causes of waste, there are also seven types of waste (Slack et al, 2013).

1. Over-production: producing more than needed by the next process.

2. Waiting time of equipment and labor due to the production of Work in Progress (WIP) not

needed.

3. Transport: moving items around the operation and double or triple handling of WIP.

4. Process: a process may only exist because of poor component design or poor maintenance.

5. Inventory.

6. Motion: when no value is added by the work, even though the operator looks busy.

7. Defectives: quality waste.

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In order to make problems visible, you should go to where it actually takes place. This is the gemba

walk. Managers should regularly visit where jobs are done to find out what types of waste exist.

To identify sources of waste, you should look at what happens to items within a process.

Value stream mapping can be used to understand the flow of material and information of products

and services as it flows through a process, operation or supply chain. It maps the production path

from start to finish and focuses on value-adding activities.

Waste could be eliminated by means of a streamlined flow. Long process routes result in

delay and inventory buffers, it adds no value and slows down the throughput times. Making a

streamlined flow with workstations close together brings more systematization and control to the

process flow. Waste could also be eliminated in three other ways:

1. Through matching supply and demand exactly: delivering only what is needed and when. It

uses the pull-principle where production is triggered only by real customer demand.

2. Through flexible processes: reducing changeover times from one activity to the next.

3. Through minimizing variability: minimizing variation in the quality of items. This can be done

using the 5S method of Lean (further explained in Section 2.2).

2.1.3 Alternatives to Lean Management Lean Management is one of the many optimization methods for business processes and problem

solving methods. This section sums up other different optimization and problem solving methods and

explains what the purpose of these methods is. Also, the methods we mention are methods that are

comparable to Lean, as they cover many different aspects of a company and not only focus on one

particular part. Of course, besides these methods, there are many more optimization and

improvement techniques, but for the sake of this research, the list will contain a small part of these.

Chapter 4 explains why we choose Lean Management instead of one of the other methods.

• Agile: aims to satisfy customers continuously, improve communication and increase quality.

It breaks large product developments into short periods of 2 to 4 weeks (LeanSixSigma, n.d.).

Another aspect of agile is that throughout the entire project, developers and business people

must work together. To motivate these people, they should be given a proper environment,

support and trust. Also, on a regular basis, the team must reflect on how to become more

effective, based on customer needs and their own needs (Linchpin SEO, n.d.).

• Deming Cycle / PDCA: the Plan-Do-Check-Act cycle is a four-step cycle aiming at quality

improvement. The steps could be interpreted as follows (Pietrzak & Paliszkiewicz, 2015):

➢ Plan: a plan is made of what someone wants to accomplish and how to know when it

is accomplished. A project must not proceed without a plan. Also measurable

objectives and methods how to reach these objectives must be established.

➢ Do: the “plan” stage is executed and the methods are implemented.

➢ Check: the expectations and objectives are checked on how well these are

accomplished. Also the effects and the results achieved are examined. Furthermore,

it is checked whether there were any deviations from the plan.

➢ Act: this last stage reviews the cycle on what lessons could be learned, which

methods were useful in reaching the objectives, whether it is reasonable to continue

with this plan or not, and if any changes are needed for a next cycle.

Figure 4 gives some detailed tasks a company can do during the implementation of the PDCA

cycle.

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Figure 4. The PDCA cycle (Pietrzak & Paliszkiewicz, 2015)

• Theory of Constraints (TOC): an operations management philosophy that focuses the

attention on capacity constraints or the bottlenecks of the company (Slack et al., 2013). The

method focuses on system improvement and concentrates on the process that slows the

production process (Nave, 2002).

• Total Quality Management (TQM): a strategy aimed at establishing and delivering high

quality products and/or services that fully cover customer demand and have a high level of

customer satisfaction. The goal is to generate more efficient services by achieving a high level

of cooperation between organizational members (Al-Qahtani, Alshehri & Aziz, 2015).

2.2 Different Lean tools For this research, we compare different Lean tools and eventually give recommendations about what

tools is most appropriate for the optimization of the business processes for Universal Corrugated B.V.

In this research, “tools” are methods, approaches, strategies or procedures with which certain

objectives can be achieved. The tools we mention in this section are all tools of Lean Management.

This section describes some of these different tools which can be used further in this research.

• 5s: a method that aims on the quality of the organization (Kogawa & Salgado, 2017).

• Sort/Seiri: eliminate what is not needed, keep what is needed.

• Straighten/Seiton: position things so that they can be easily reached when needed.

• Shine/Seiso: keep things clean and tidy.

• Standardize/Seiketsu: maintain cleanliness and order.

• Sustain/Shitsuke: develop commitment and pride in keeping the standards.

• Heijunka (Level Scheduling): a method of production scheduling with the purpose of

manufacturing in smaller batches by sequencing product variants within a process (25

essential Lean tools, n.d.).

• Jidoka (Automation): a design equipment so that the manufacturing process is partially

automated and will automatically stop when defects are detected (Maralcan & Ilhan, 2017).

• Just-In-Time (JIT): parts are pulled through the production based on customer demand

instead of parts being pushed through production based on projected demand (25 essential

Lean tools, n.d.).

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• Kaizen: a strategy in which all employees must work together to achieve continuous

improvement (25 essential Lean tools, n.d.).

• Kanban (Pull System): a method in which the flow of goods within an organization and with

suppliers and customers will be regulated. It is based on replenishing goods on an automated

basis. This eliminates inventory and overproduction waste (25 essential Lean tools, n.d.).

• Poka-Yoke: a system to prevent errors. It is a method to prevent the defect, detect, discover

and act in cause (Kogawa et al., 2017).

• RASCI: a tool to allocate roles to people involved in a certain initiative (Harrin, 2018 and

Sugiyama & Schmidt, 2013).

➢ Responsible: the individual actually working on the activity, the “doer”.

➢ Accountable: the individual with the yes or no decision-right over the activity.

➢ Supportive: the individual supporting the doer in getting the activity done. This

individual also has authority to provide resources and information needed for the

activity.

➢ Consulted: the individual to be consulted before the process can proceed.

➢ Informed: the individual who needs to be informed about what is occurring but is not

actually a part of the activity.

• SMED (Single Minute Exchange of Die): a method to reduce setup change over time (25

essential Lean tools, n.d.). The changeover time is the time between the production of the

last good and the production of the first good.

• Standardized work: procedures for manufacturing are documented so they capture best

practices. The documentation must be easy to change (25 essential Lean tools, n.d.).

• TPM (Total Productive Maintenance): an approach to maintenance where the focus lies on

proactive and preventative maintenance so that the operational time of equipment can be

maximized (25 essential Lean tools, n.d.).

2.3 Lean tools for the optimization of business processes in an SME A small- and medium-sized enterprise (SME) can be recognized by its low number of employees.

Furthermore, the annual turnover or the annual balance sheet can be taken into account when

determining whether a company is an SME or not (Berisha & Pula, 2015).

Table 1 is an indication to determine whether a company is small-, medium-, or micro-sized.

Table 1. Definition SMEs with European Union standards (European Commission, 2016).

Enterprise category Number of employees Annual turnover Annual balance sheet total

Medium-sized < 250 ≤ €50 million ≤ €50 million Small-sized < 50 ≤ €10 million ≤ €10 million Micro-sized < 10 ≤ €2 million ≤ €2 million

12

When looking at the number of employees, we can identify Universal Corrugated as a small-sized

enterprise, as they have about 42 staff members. The turnover or balance sheet is not known, so we

cannot determine whether Universal is small- or medium-sized in that respect. In the rest of this

research, we call Universal Corrugated an SME.

Some more indicators to recognize an SME are listed below (Yon & Evans, 2011). We can also

apply these characteristics to Universal Corrugated.

• The organization has highly personalized contacts;

• The sales are very uncertain;

• The relationship with customers is somewhat unstable;

• The production is labor intensive;

When looking at appropriate Lean tools for the optimization of business processes in an SME in

general, Lee (2004) determined that the 5S tool is most suitable. 5S focuses on quality, preventive

maintenance and employee involvement. It also requires low financial investment. Using 5S leads to

less human effort, less space and capital, shorter processing times and fewer mistakes (Bamber,

Sharp & Hides, 2000). In order to implement 5S in an SME, we must clearly define the processes and

the organizational culture (Veža, 2011).

Besides 5S, also SMED, continuous improvement (Kaizen), standardization, Kanban, and TPM

can be used in SMEs (Majava & Ojanperä, 2017). Majava et al. (2017) recommends SMEs to first use

5S and standardization and then implement tools as Kanban, as the first two require less financial

investment than the last one.

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3. The current situation In this chapter, we explain what the current situation of the business processes at Universal

Corrugated B.V. is. Section 3.1 shows what the company looks like and explains the different business

processes within the company. Section 3.2 shows the flowcharts of the business processes. Section

3.3 describes the problems found within the processes, which we linked to the different types of

waste of Lean Management. For this chapter, we describe the sales-engineering process in detail,

while we globally describe the other processes.

The two research questions central in this chapter are:

• What are the current steps of the business processes at Universal Corrugated B.V.?

• What problems exist within the business processes at Universal Corrugated B.V.?

3.1 The company Universal Corrugated B.V. is a company consisting of around 40 employees working in different

departments within the company. It is a very informal company, without sufficient standards, and

concluding from an employee satisfaction survey, people do not seem to be very proud to work at

the company. The employees all have a different vision, which causes many discussions. There is a

large gap between the sales department and the engineering department, figuratively and literally.

The engineering department is upstairs, while the sales department is downstairs. Even though the

two departments are in the same building, the employees feel like “they are in two different worlds”.

The company consists of three parts:

• The offices on ground floor;

• The shop floor on ground floor;

• The offices on top floor; this is the engineering department.

The offices on ground floor consist of several departments, namely sales, service/spare-parts,

production, purchasing, accountancy and reception. Also the plant manager’s office is located on

ground floor.

Also the shop floor consists of different areas. The shop floor is divided into a mechanical

part and an electrical part, both having its own manager. At the shop floor, the different parts of the

machine are made or modified and the machine is assembled.

Appendix A shows the organogram of the company and Figure 5 the floor plan with legend.

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Ground floor Top floor

1 Ground floor offices 1 Engineering department

2 Electrical area

3 Mechanical area

4 Warehouse area

Figure 5. Floor plan with legend as provided by Universal Corrugated B.V.

3.2 Flowcharts of the different business processes This section gives a visual representation of the different business processes at Universal Corrugated

B.V. First, a flowchart shows the overall process from order to delivery. Then, different flowcharts

represent the sales and engineering processes more in detail. Appendix B shows the flowcharts of

the other processes. In these flowcharts we use different symbols.

s

15

3.2.1 The overall process The following flowchart is a global flowchart of the overall process from customer order to machine

delivery (Figure 6). Note that the accountancy process is not included in this global flowchart, as it is

a process on which other processes do not depend. However, the accountancy process does depend

on the other processes.

Figure 6. The overall process

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The overall process starts with a customer requesting a Universal machine. The sales employee

makes an offer and the customer accepts this offer or not. When the customer does accept the offer,

the process moves on by making a project sheet. Based on this project sheet, the engineering and

production departments make lay-outs of the machine, price calculations and pre-calculations

(regarding working hours and risks), a component list of everything they need to make the machine,

and the software that goes into the machine. Using the Bill of Materials (BOM) and an overview of

the stock the purchasing employee can order the materials that are not in stock. After receiving

these materials, the shop floor mechanics can make the sub-assembly to eventually build the whole

machine. Then, the software engineers perform an internal test to check whether everything works

as expected. When they approve the machine, the machine can be brought to the customer. At the

customer’s factory, the software engineers perform an external test, to double check whether

everything is correct.

3.2.2 The sales process The sales office consist of only one employee, who is responsible for orders, customer contact,

agents and marketing. The employee visits potential customers, proposes an offer, writes the order,

leads the projects and takes care of the after-sales.

The sales process in Figure 7 starts with the sales employee getting a customer request. He

gets this request from the customer himself or he first visits the customer to introduce a product.

When the latter happens, the customer can agree to the proposal or he can choose to not order a

machine at Universal. After the customer request, the sales employee adjusts the standardized

engineering request in order to create a specified engineering request. With this engineering request

and the lay-outs, specifications and cost price calculations made by engineering and production, the

sales employee can create an offer. He discusses this offer with the customer and based on this offer,

the customer accepts the offer or not. When he accepts the offer and signs the contract, the main

job of the sales employee is done and he hands the project over to the engineering department.

Figure 7. The sales process

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3.2.3 The service / spare-parts process The service/spare parts office has one manager and two supporting employees. These three

employees are responsible for selling service, spare parts and modifications. Just like the sales

employee, they try to attain potential customers and acquire orders.

The service/spare-parts process actually looks a lot like the sales process, as it starts with a

customer request and end with the delivery of products to the customer. However, the

service/spare-parts process focuses on small products that belong to the machine, whereas the sales

process focuses on a big product, namely the machine. Appendix B.1 contains the flowchart of this

process.

3.2.4 The engineering process At the engineering floor, there are three disciplines: mechanical engineering, electrical engineering

and software engineering. The five mechanical engineers take care of the layout of the machine,

which they visualize by a 2D or 3D drawing. Also, they are responsible for the price calculations of the

machine and solving problems when the mechanics are having any trouble. The electrical

engineering part, consisting of two employees, is responsible for the electrical part of the machine.

Furthermore, one of them is also responsible for software and the other one is also responsible for

the documentation part.

The engineering process (see Figure 8) is the next process after the customer signs the

contract. The sales employee hands the project over to the engineering department and the

engineering manager starts with making a risk estimation and an estimation of how many hours the

engineers need to spend on the project. Then, he makes a project sheet which contains the

specifications of the machine and a planning. The engineers can now make lay-outs of the machine,

price calculations and a component list of the materials needed. After they did this, they need to

check whether there are any deviations from a standard machine. If so, the software engineers need

to apply these deviations to the standard software. If not, they can apply the standard software into

the machine. When the software is ready, they do an internal test to check whether everything

works well. Then, this test is done again, but with the customer and once without the product (dry

commissioning) and once with the product (wet commissioning). The product is in this case the

cardboard. They do this test again at the external test, which is at the customer’s factory.

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Figure 8. The engineering process

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3.2.5 The production process At the production office there are two employees: the production manager and the supporting

employee. These two employees are responsible for the preparation, planning and managing of the

production, so that the company can deliver the machine complete and on time. furthermore, they

need to do possible analyses, for example how tasks need to be divided, and need to take in mind

the service needs of the customers. The production manager also does the pre- and post-calculations

and the yearly stock count of the warehouse.

The flowchart of the production process (Appendix B.2) is the largest flowchart of all, but also

the most important one for the whole process of building a machine. The flowchart actually contains

two processes: the process of building the machine and the process of sending spare-parts to

customers, which are not linked to each other. The spare-parts are sent to customers who already

have a Universal machine installed in their factory.

3.2.6 The purchasing process The purchasing office consist of two employees, one manager and one supporting employee, both

responsible for purchasing materials for the production of the machine. The supporting employee

takes care of the materials in the standard catalogue, while the manager takes care of the materials

for the production of sub-parts of the machine. They are also responsible for requesting offers of

different suppliers.

The purchasing process is a small process, where the employee checks which materials are

missing in order to order these materials. Appendix B.3 shows the flowchart of this process.

3.2.7 The accountancy process The accountancy and reception is dealt with by one employee. This employee is responsible for

processing the invoices in the system, checking if everything is right and checking whether the

customer already paid the invoice or not. If they already paid the invoice, the employee processes

this payment in the system. If they did not yet pay, the employee makes sure the customers gets a

notification of this.

As mentioned in Section 3.2.1 the accountancy process (see Appendix B.4) is a process that is

conducted on itself. The employee can fulfill this task without other processes depending on it.

3.3 Problems within the business processes Within the different business processes at Universal Corrugated B.V. we found several problems

linked to one (or more) of the seven types of waste (Chapter 2). Table 2 shows these problems and to

which waste type we connect the problem. The department mentioned in the first column is the

department that experiences the problem, so this is not always the department that causes the

problem. We mention the department that causes the problem in the second column. We also found

problems not linked to waste. The list after the table describes these problems.

Table 2. Issues and types of waste per department

Department Issue (“department that causes the issue”)

Type(s) of waste Description

Sales Low level documents (engineering and service/spare-parts)

Defectives Colleagues do not deliver professional documents. The quality of the documents is very low and the information is vague.

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3D drawings instead of 2D (engineering)

Motion and over-production

The customer delivers 2D drawings of their factory lay out, while the sales employee gets 3D drawings of the engineering department. This is unnecessary and inefficient. The sales employee cannot match the Universal drawing with the customer’s drawing. However, it is not always the case, because the customer sometimes requests a 3D drawing.

Unclear or incomplete drawings (engineering)

Motion and defectives

The employee receives incomplete drawings (e.g. with missing measurements) of the engineering employees. This should be corrected, thus the sales employee needs to ask for these corrections.

Service / Spare-parts

Unnecessary or too many materials are ordered (purchasing)

Over-production The stock of some materials in the system is not correct, which causes that the purchasing employee orders materials that are still in stock. Also, sometimes more materials than necessary are ordered due to communication mistakes.

Wrong materials ordered (purchasing)

Inventory Sometimes wrong materials are ordered. This causes the inventory costs to increase.

Low quality materials and information (plant manager and engineering)

Defectives The materials ordered have low quality and also the information received by the department lacks quality.

Engineering Unclear or missing information (sales, service/spare-parts and engineering)

Motion and defectives

Information received by other departments or colleagues at engineering is not always as clear as it should be, so that the employee needs to retrieve this information. Also, employees sometimes cannot required information.

The unclear or incomplete scope of the project (sales)

Motion and defectives

The scope of the project is often not clear or incomplete, which causes the employees to approach their colleagues to complete this scope and find out more about it.

Lots of after care (plant manager)

Process Due to low quality materials and a low quality end-product, the company has lots of after-care after the end product has been launched. This is a waste of time and money.

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Production Unclear or incomplete drawings and information (engineering)

Motion and defectives

The employee receives incomplete drawings (e.g. with missing measurements). This should be corrected, thus the production employee needs to ask for these corrections. This is also the case for other information.

Too few or wrong materials ordered (third-party deliverers, purchasing)

Waiting time Sometimes the deliverers do not completely deliver the materials or the company ordered the wrong materials. Other processes must wait for these materials to continue.

Sent products do not meet quality requirements (third-party deliverers, plant manager)

Defectives and process

The third-party deliverers do not always send materials that are 100% accurate. The employees must then, when possible, adjust these materials so that they can be used. If it is not possible, the materials are thrown away and ordered again.

Unnecessary sub-assemblies produced (engineering)

Motion and over-production

During the assembly of the machine, changes are made sometimes. This also means some sub-assemblies are not needed anymore or do not meet the requirements.

Materials and information/drawings are delivered too late (third-party deliverers, plant manager)

Waiting time Some materials are not always delivered on time. The employees must wait for these materials before continuing with their jobs. This is also the case for information and drawings that should be received by colleagues.

Not the right resources to test quality (plant manager)

Defectives The resources for testing the quality of incoming products can be of better quality.

Unnecessary materials ordered (purchasing)

Inventory Some ordered materials are not needed and were still in stock. This causes the buffer to grow.

Purchasing Missing drawings (engineering)

Motion The employee must look for the drawings himself.

Accountancy Double documenting in the system (plant manager)

Transport The information that needs to be documented, is documented in the system of the employee and in the ERP system.

Lost orders (unknown) Motion The employee needs to find the order herself and it is not clear where the order is. This is also caused by a messy work space.

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Table 2 clearly shows that Universal Corrugated experiences different types of waste. The two types

of waste mentioned the most are motion and defectives. Employees must trace their information by

themselves, because things are incomplete or unclear (motion). Also, the quality of materials, both

from third-party delivered as from colleagues, is beneath the requirements (defectives). This means

that most focus must lie on eliminating these two types of waste.

More problems not linked to waste:

• The end-product (the machine) is not standardized and new functions or features are always

added. This increases costs. Because of this, competitors might be less expensive.

• After the contract is signed, many changes are applied to the machine due to, for example,

engineering changes. These changes can no longer be charged to the customer, because they

are not customer driven, and should be tackled before the contract is signed.

• Too many discussions about small things.

• The department do not give each other (sufficient) feedback. Also the management does not

give the departments the feedback they might need.

• The employees do not always start with the highest priority tasks, but start with a lower

priority task. They also tend to postpone important tasks.

• The software that is integrated in the machine is not well developed and not up-to-date. It is

getting better, but the progress goes too slow.

• The steps for fulfilling a specific job are not documented. The functional and process

descriptions are missing. Because of this, the employees just do their jobs the way they want

to do it themselves.

• The project sheet does not include all information necessary for some employees. For

example, a technical document is missing that comes in handy for the software employees.

• The electrical drawing program is outdated and not pleasant to work with.

• Some employees do not have sufficient knowledge about certain products. Also, new

employees (especially in the shop floor) need a lot of training and guidance. This also comes

at the cost of other employees’ jobs and tasks.

• It is not clear what the quality requirements are.

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4. Solution design When comparing Lean Management to other alternatives for the optimization of processes, Lean

Management is a method that stands out. The method is very broad and covers almost all aspects

that need to be optimized at Universal Corrugated. However, the method cannot eliminate problems

such as the low-developed software or the outdated electrical drawing program. We choose

different Lean tools to optimize the processes and eliminate the waste at the company. The research

question answered in this chapter is:

• What Lean tools are best to optimize the sales-engineering process at Universal Corrugated

B.V.?

First, in Section 4.1, we list the criteria this research should meet. Also, we attach weights to these

criteria to show how important the different criteria are. Then, the section gives scores to the

alternatives to Lean Management and Lean Management itself. This eventually results in a table

filled with scores.

Section 4.2 does the same as Section 4.1, but with the different Lean tools. The criteria we

mention in this section are the criteria the Lean tools should meet. By this, we look closely at the

sales-engineering process. This section results in a number of Lean tools that we can use further in

this research. This section also answers the research question.

4.1 The best optimization method In order to find out which optimization method is best to optimize the business processes at

Universal Corrugated B.V., and specifically the sales-engineering process, we list some criteria. We

take the following criteria in mind when evaluating the different methods:

• Criterion 1: The method can be applied to an SME in general.

• Criterion 2: The method must be applicable to at least the sales-engineering process.

• Criterion 3: The method must help to eliminate (a large part of) the waste and problems of

the company.

To show the importance of the different criteria, Table 3 shows what weights (summing up to 100%)

we attached to them. We explain the motivation for these weights in the column “explanation”.

Table 3. Criterion – Weight table optimization methods

Criterion Weight (%) Explanation 1 20 Universal Corrugated is an SME. The optimization method must

be applicable to an SME regarding aspects such as budget and difficulty (not all methods are appropriate for SMEs). This criterion is the least important, therefore the weight of 20%.

2 30 The method should be applicable to at least the sales-engineering process in this research, as this is the process we focus on. However, we also want to recommend the other processes, so it is ideal that the method is also applicable to these. This latter is not a must, as we can also apply different methods to the other processes; therefore, we give the criterion a weight of 30%.

3 50 The problems and waste should be eliminated in order to improve the processes within the company. Without eliminating this, we cannot optimize the processes and the situation does

24

not change. Applying one or more methods to eliminate the problems is the most important thing in this research, therefore we give this criterion a weight of 50%.

The next step in determining which method is best for this research, is to give scores (from 1 to 5) to

Lean Management and its alternatives regarding the criteria. Then, we calculate the total scores of

the different method by summing up the multiplications of the score by the weight

(∑ 𝑤𝑖 ∗ 𝑠𝑖 | 𝑤 = 𝑤𝑒𝑖𝑔ℎ𝑡, 𝑠 = 𝑠𝑐𝑜𝑟𝑒, 𝑖 = 𝑐𝑟𝑖𝑡𝑒𝑟𝑖𝑜𝑛3𝑖=1 ). The result of this is Table 4. Chapter 2

explains the alternatives mentioned.

Table 4. Total score table optimization methods

Criterion Method

1 (20%) 2 (30%) 3 (50%) Total score

(∑ 𝒘𝒊 ∗𝟑𝒊=𝟏

𝒔𝒊) Agile 5 5 4 4,1 Deming cycle / PDCA 5 5 2 3,3 Lean Management 5 5 5 4,5 Theory of Constraints (TOC)

3 3 3 2,7

Total Quality Management (TQM)

3 5 3 3,3

Looking at criterion 1 the scores are very high. Almost all methods are appropriate for an SME,

regarding time, budget and difficulty. TOC and TQM are somewhat more difficult to implement than

the other methods, so we give these methods a score of 3.

Criterion 2 has some high scores. Almost all methods are very appropriate for the

optimization of the sales-engineering process, but also for the other processes, so we give four

methods a score of 5. TOC focuses on system improvement and the production process, therefore

we give this method a score of 3.

In criterion 3 Agile and Lean Management stand out, as they aim to improve quality and

communication and focus on continuous improvement and the customer’s needs. This is exactly

what Universal needs. Lean Management, however, provides tools for the elimination of some more

problems compared to Agile. Therefore, we give Lean the score of 5 and Agile the score of 4. PDCA

mostly focuses on quality management, so we give this method a score of 2. TOC and TQM also focus

on quality improvement, but are also appropriate to eliminate at least one other problem, such as

aiming at an efficient collaboration between colleagues. Therefore, the score of 3.

Looking at the table, the total scores result in the following top five:

1. Lean Management

2. Agile

3. PDCA

4. TQM

5. TOC

Lean Management covers many different aspects and we can apply different tools for solving

different problems. We can also apply the method to all departments within the company as it does

not focus on only one particular department. Furthermore, Lean Management is very suitable for

optimizing processes within an SME. Thus, we choose Lean Management as best method for the

optimization of the business processes in this research.

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4.2 The best Lean tool As Section 4.1 concluded that Lean Management is the best optimization method for this research,

we take several Lean tools in mind. Chapter 2 describes these tools and their explanations. The tools

all have different purposes and can be used for different problems in this research. To find out which

tool is best to solve which problem, we establish a table with criteria, weights and scores.

When establishing the criteria, we take the triple constraint (Quality – Time – Budget) in

mind. This results in the following criteria:

• Criterion 1: The tool improves the quality of the delivered documents/information

transferred between the sales-engineering process at Universal Corrugated B.V.

• Criterion 2: The tool decreases the overall lead time of the work done by the sales-

engineering process.

• Criterion 3: The tool decreases the quality costs caused by the sales-engineering process.

Table 5 gives the weights that we attach to these criteria and the column “explanation” explains why

we choose these certain weights.

Table 5. Criterion – Weight table Lean tools

Criterion Weight (%) Explanation 1 50 The quality of the documents transferred between the sales and

engineering process is too low. This is also one of the most common waste types. It is important that this quality improves, so that the overall process of building a machine can also improve. We consider this to be the most important criterion, therefore we give this criterion a weight of 50%.

2 20 The least important aspect is the long lead time. The customer agrees to this lead time and the company always reaches the stated deadline. However, when the lead time is shorter, the customer may be more satisfied. Decreasing the lead time is the lowest priority improvement, therefore we give it a weight of 20%.

3 30 The Lean tool must help to decrease the quality costs caused by the sales-engineering process. These costs are a result of for example adjusting incorrect drawings (labor costs) and applying changes to the machine after the customer already paid (production costs). This criterion is medium important, so we give it a weight of 30%.

Table 6 shows what scores we gave to which Lean tool regarding the different criteria. We already

eliminated the Lean tools which we thought that would not be appropriate for this research, such as

Heijunka and SMED, as these mostly focus on the production process or another process. These tools

are not appropriate for the optimization of the sales-engineering process, which is our focus. It

eventually results in a column filled with total scores, calculated by summing up the multiplications

of the score by the weight ((∑ 𝑤𝑖 ∗ 𝑠𝑖 | 𝑤 = 𝑤𝑒𝑖𝑔ℎ𝑡, 𝑠 = 𝑠𝑐𝑜𝑟𝑒, 𝑖 = 𝑐𝑟𝑖𝑡𝑒𝑟𝑖𝑜𝑛3𝑖=1 ).

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Table 6. Total score table best Lean tool

Criterion Tool

1 (50%) 2 (20%) 3 (30%) Total score

(∑ 𝒘𝒊 ∗ 𝒔𝒊𝟑𝒊=𝟏 )

5S 5 2 4 4,1 Kanban (Pull System) 2 4 4 3,0 Standardized work 5 4 3 4,2

5S scores very high at criterion 1, because it aims at improving quality. Also standardized work

focuses on quality, which explains the scores of 5. Kanban does not focus on improving quality, so we

gave this tool a score of 2.

Regarding criterion 2, 5S scores somewhat low, because a more efficient workspace and

improved quality does not necessarily result in a shorter lead time. Kanban and Standardized work

have a score of 4, because they can all lead to a reduction of the lead time.

The scores at criterion 3 range from 3 to 5. Standardized work indirectly results in lower

production and quality costs. Therefore, we give this tool a score of 3. 5S has a higher influence on

reducing the quality costs, so we give this tool a score of 4. Kanban is focused on eliminating

overproduction, which reduces quality costs. This explains the score of 4.

The conclusion of this table is the following ranking:

1. Standardized work

2. 5S

3. Kanban (Pull System)

4.3 Conclusion We choose Lean Management as the best optimization method for the business processes at

Universal Corrugated, because this is the method that best covers the aspects we want to tackle in

this research. Other methods we take in mind are Agile, the PDCA cycle, Total Quality Management

(TQM) and the Theory of Constraints (TOC). In order to make this decision, we establish three criteria

and attach weights to these criteria. Then, we give scores to the different methods regarding the

three criteria. This results in a top-5 with Lean Management as best optimization tool.

We do the same with choosing the best Lean tool for the optimization of the business

processes. The tools we take in mind are 5S, Kanban and Standardized work. We also establish three

criteria with different weights. The criteria are based on the triple constraint (Quality – Time –

Budget). We also give scores to the tools regarding the criteria. The outcome is the following ranking:

Standardized work, 5S, Kanban.

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Chapter 5: Solution implementation Chapter 4 resulted in a top three of best Lean tools to implement at Universal Corrugated B.V. This

chapter describes how to implement these tools. First, in Section 5.1, we describe the general steps

of implementing Standardized work and then apply this to the sales-engineering process at Universal

Corrugated B.V. We do the same for 5S and Kanban in Sections 5.2 and 5.3, respectively.

• What steps should be followed when applying the chosen Lean tools to the sales-engineering

process at Universal Corrugated B.V.?

5.1 Standardized work Standardized work is a methodology in which procedures for manufacturing are documented so they

capture best practices. The documentation must be easy to change (25 essential Lean tools, n.d.).

According to Aernoudts (2015) standardization can lead to the following things:

• It provides a predictable outcome regarding improved safety, quality, delivery and costs.

• It creates a rhythm for work which results in the prevention of overburdening.

• It helps people to structure their work.

Aernoudts also suggests six steps for the implementation of standardized work:

1. Define the work capacity and bottlenecks.

2. Identify the elements of work and the variability in time required to complete the work. For

this step, we should use a Process Study Chart (Figure 9). This chart is used to record the time

needed to finish a work element in a process (Narusawa & Shook, 2009).

3. Determine what element needs improvement.

4. Determine for this to be improved element what its purpose is, why it is necessary, where,

when and how it should be done, and who should do it. Decide whether it is possible to

eliminate, combine, rearrange or simplify the element. This step results in an optimized

sequence of elements.

5. Test the optimized sequence. Measure the results to see if it has been improved.

6. Make the new method a standard and teach people how to apply this standard. Also, make

job instructions for the standard. Try to continuously improve the standard.

Figure 9. Process Study Chart (Narusawa & Shook, 2009)

In this method the procedures for manufacturing are documented. As the employees of Universal

Corrugated have experienced that many things are not standardized or documented, the

implementation of standardized work could be very useful. Standardization could also lead to higher

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quality, faster delivery and reduced costs. Table 7 describes how to apply the different steps of the

implementation of standardized work into the sales-engineering process.

Table 7. Application standardized work into Universal Corrugated B.V.

Steps How to apply? 1. Define the work capacity and bottlenecks The employees of both the sales and

engineering process must calculate the work capacity of each employee: how many tasks is an employee able to do during a day? By counting the amount of tasks for 5 days straight, they can calculate the average of tasks per day. Of course, one task is bigger than the other, so we need to make a difference between different sorts of tasks. A task that takes at most 1,5 hour is a small task. A task that takes between 1,5 and 3 hours is a medium task and a task that takes at least 3 hours is a big task. To calculate the total amount of tasks per day, the small tasks need to be multiplied by 0,5, the medium tasks by 1 and the big tasks by 2. The amount of tasks per day can then be calculated by the following formula: 0,5 * [amount of small tasks] + 1 * [amount of medium tasks] + 2 * [amount of big tasks]. The employees also need to identify whether there are any bottlenecks during the tasks, which causes the tasks to take longer than necessary. These bottlenecks can be for example a non-optimized software system or colleagues that take too long to hand over required information.

2. Identify the elements of work and the variability in time required to complete the work

Using a Process Study Chart the employees can record the time needed to finish a task. In the column “process steps” they have to write down aspects such as “creating an offer” or “making a lay-out”. These are the tasks. The work elements are things such as “writing down customer specifications” and “determining measurements”. They have to do at least 5 time measurements of the work elements, so that they have a good insight into what the variability in time is. They also need to write down this variability per work element. They can calculate the variability per work element by means of the following formula: Variability = ∑ (𝑋𝑖−𝑚)2

𝑖

𝑁

(Xi = the separate time i of the work element, m

= the average of all Xi’s = ∑ 𝑋𝑖𝑖

𝑁, N = the number

of times measured).

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3. Determine what elements needs improvement

By checking the variabilities of the work elements, the employees can determine what elements need improvement. These are the elements with the highest variability.

4. Determine for these to be improved elements what its purpose is, why it is necessary, where, when and how it should be done and who should do it

When the employees determined what elements need improvement, the next step is to write down in detail all aspects of the element. These are things such as the purpose of the element and how it is done. Then, they need to find out whether it is possible to eliminate, combine, rearrange or simplify the element. Also, the managers of the different departments must determine a working standard for each element and document this. By means of a working standard, the employees can perform the task quicker than before. When it is possible to eliminate, combine or rearrange the work elements, the employees can make a new sequence of work elements to do during their tasks.

5. Test the optimized sequence After the employees established a renewed sequence, they must make a new Process Study Chart to see whether the time to finish the task has been reduced. When it is not improved, the employees need to start over from step 2.

6. Make the new method a standard and teach people how to apply standard

When the sequence is a working sequence with visible reduced times, they can make the new sequence the standard. However, to implement this, all employees must know about the standard and how to apply the standard. The managers must write down job instructions for the tasks so that all is clear for all employees.

5.2 5S As mentioned in Chapter 2, 5S is a method that aims on the quality of the organization (Kogawa &

Salgado, 2017). The five S’s of this method represent the following things:

• Sort/Seiri: eliminate what is not needed, keep what is needed.

• Straighten/Seiton: position things so that they can be easily reached when needed.

• Shine/Seiso: keep things clean and tidy.

• Standardize/Seiketsu: maintain cleanliness and order.

• Sustain/Shitsuke: develop commitment and pride in keeping the standards.

Also, according to Randhawa and Ahuja (2017) the 5S method can result in achieving better

productivity, a safe environment and less time wastage.

There are different authors who propose strategies for the implementation of 5S into an

organization. These strategies all look alike, so for the sake of this research we describe only one

strategy. The one Robertson (2003) provided is the most detailed one. This strategy contains of a 16-

step plan:

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1. Determine whether 5S implementation is necessary in an organization based on for example

an excess in inventory, absence of equipment when needed, and a reduction of neatness and

cleanliness.

2. Build up a positive learning environment for the 5S implementation by means of visual

representations and discussions.

3. Identify the organizational goals and objectives.

4. Make sure the top to bottom management is committed and each employee is supported.

5. Build up a checklist to evaluate the results of the 5S project which should be exercised

monthly.

6. Make a time policy management in which the time period for the 5S project is decided.

7. Identify problems such as loss of interest by the management and tackle these as early as

possible in the project.

8. Communicate what benefits other companies derived from a 5S project. This leads to more

support from the upper management and employees.

9. Take pictures/videos of the work areas of the organization before the project starts.

10. Give responsibility to the 5S teams for training, evaluation and enforcement.

11. Start with the sort phase: identify what materials and items lying in the organization are

unwanted and eliminate these.

12. Start with the straighten phase: place the needed and useful items at their respective spots

so they are easily stored. Labelling and color coding the items might also be useful.

13. Start with the shine phase: identify the areas that need frequently cleaning and rank these

areas according to the frequency of use. Assemble the cleaning tools and eliminate dirt and

dust at each corner and edge of the workspace.

14. Start with the standardize phase: make sure the first 3 S’s are integrated into the daily duties

of the employees. It must become a standard process in the organization.

15. Start with the sustain phase: organize a standard work space and develop a mindset of

continuous improvement. Try to maintain all previous 4 S’s.

16. Evaluate the 5S project in order to measure the improvements and achievements and make

a report of this evaluation.

5S is a proper Lean tool for Universal Corrugated and could eliminate the defectives in the sales-

engineering process. Defectives are the things that lack quality such as the low-quality documents

and drawings received. These are a waste for the company. By implementing 5S also time wastage

could be reduced by almost 50% and productivity within the process could be increased (Randhawa

et al., 2017). Furthermore, 5S is the most valuable Lean tool for an SME, due to its low financial

investment (Rose, Deros, Rahman & Nordin, 2011).

5S is a tool mostly used in a manufacturing environment. However, it can also be applied in

an office environment. The sales and engineering processes are office environments, so we need to

find an appropriate way to implement 5S in these processes. The offices are considered as small

paper factories, where documents are produced. 5S can reduce mistakes and it can reduce the time

for searching the right information or documents. This increases productivity.

Universal Corrugated B.V. can implement 5S by following the 16 steps suggested by

Robertson (2003). We will go through every step to see how these can be applied to the sales-

engineering process of the company. Some steps can be combined or moved to another place. The

sequence in Table 8 is the sequence we suggest for Universal Corrugated.

Table 8. Application 5S into Universal Corrugated B.V.

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Steps How to apply? 1. Determine whether 5S implementation is necessary in an organization.

The sales and engineering employees must determine what goes wrong by answering the following questions: - Is it hard to find digital or physical documents? - Did we label the documents, so that we know what they are before opening the document? - Do we have useless items in our working spaces? If they answer yes to these questions, it is useful to implement 5S. Having a messy workspace with a lot of unnecessary items in it, can cause the quality of the employee’s job to decrease. They waste time finding the needed equipment and thus, they spend less time working productively. This eventually leads to the employees working faster, as they have less time to complete the job. This decreases the quality of the delivered documents and information. The quality of the layouts made by the engineering department is lower than expected, which is a burden for the sales department. There is also a time wastage between these processes. This means that a 5S implementation is definitely needed in order to improve this quality.

2. Identify the organizational goals and objectives.

Section 1.5 describes the objectives of the company. Besides these objectives, we determined that the quality and the efficiency of the work done is too low, which can be improved by 5S.

3. Build up a positive learning environment for the 5S implementation by means of visual representations and discussions.

The employees of the engineering and sales department should get an explanation about what 5S is and why it should be implemented in the organization. The plant manager can do this by means of a presentation. He also has to make clear what the benefits for the employees are after the implementation. He has to give the employees the possibility to provide their opinions about the implementation. It is important that the management explains the implementation in simple language. When using the Lean terms, the employees might be scared off and not as motivated as it might seem too hard for them.

4. Communicate what benefits other companies derived from a 5S project.

The management must find out how other companies (preferably SMEs) experienced the 5S implementation. They can look for this on the Internet. It might also be useful to get in contact with a company that implemented Lean to find out what their strategy was and how it turned out. The management must communicate this information with the employees during the presentation.

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5. Make sure the top to bottom management is committed and each employee is supported.

The benefits of the implementation for the sales and engineering employees must be clear to everyone. This results in higher commitment. Announce the benefits during the presentation and it may also be useful to write them down and hand it out to all employees.

6. Build up a checklist to evaluate the results of the 5S project which should be exercised monthly and make a time policy management.

The management needs to write down what results need to be achieved by the 5S implementation and what the managers and the employees need to do in order to achieve these. This includes doing the first 4 S’s. The two main achievements are quality improvement and time reduction, but the management might also come up with other “smaller” achievements. They need to place the achievements on a timeline and set straight deadlines for it. Some achievement will not take as long as other achievements. During a monthly meeting, the managers need to check this checklist and make a plan for achieving the non-checked points. When deadlines are not achieved, the managers need to find out what the reason was for this and how it can be achieved at a new deadline.

7. Identify problems such as loss of interest by the management and tackle these as early as possible in the project.

Check whether every employee is still as committed as before. When this is not the case, have a conversation with them and repeat the benefits for this employee to stimulate his/her commitment. Commitment is an important aspect. Without commitment, the company cannot properly implement 5S.

8. Give responsibility to the 5S teams for training, evaluation and enforcement.

For this 5S implementation there are two teams: the sales team and the engineering team. These teams need training and evaluation. Training can be done using online courses, but also training at some specialized companies can be useful. The training needs to teach the employees about how to implement the 5 S’s properly into their offices, so that they can achieve a more efficient working space. Evaluation can be done using the checklists (step 5). The plant manager is responsible for the enforcement of the employees so commitment is kept.

9. Start with the sort phase The employees of the two teams must check their workspaces to identify what materials and items do not add any value. Examples of these materials or items are old documents that are still on the desk, trash, and office supplies that are not needed daily. In this phase, the employees must take pictures of the workspaces before the 5S implementation and especially of the non-value adding items. This is a very simple step, but the pictures need to be very clear and every corner of the offices need to be on them. This way, the employees can compare before and after pictures.

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10. Start with the straighten phase After finding out what items do not add value, the employees need to throw them away or store them. When storing, the employees must place the items in such way that they are easy to pick. Also, storage boxes and maps are useful to keep the workspace neat. The employees need to store essential items closer to them and items they use very seldom further away. This latter can for example be stored in boxes. For the digital document they need to create maps in which they collect all items with the same subject. The maps must be named in such a way that every employee knows what is in the map without opening it.

11. Start with the shine phase Clean the workspace. This means remove dust, clean the desks and the computers and vacuum the floor. When everyone cleans his own working space, this job is quickly done.

12. Start with the standardize phase Now that the workspace is neat and cleaned, this should be made the standard. The employees should integrate “tidying up” and “cleaning” into their weekly planning. It might also be useful to determine some rules and policies, such as that the employees need to store everything when they do not use it anymore.

13. Start with the sustain phase Maintain the previous 4 S’s. The plant manager must keep an eye on this, so that the work areas are kept neat and cleaned all the time. In order to keep the spaces neat and clean, the employees need to take pictures of their workspaces after the shine phase. They can hang these pictures on a whiteboard, so that every employee can see how the workspace needs to look like. This way, everything will be placed at the correct spot so that everyone can find it and nothing will be lost.

14. Evaluate the 5S project in order to measure the improvements and achievements and make a report of this evaluation.

At the end of the implementation the checklist should be checked: is every goal achieved? If not, what can be done better next time? Write this down in a report.

5.3 Kanban Chapter 2 describes Kanban as a method in which the flow of goods within an organization and with

suppliers and customers will be regulated. It is based on replenishing goods on an automated basis.

This eliminates inventory and overproduction waste (25 essential Lean tools, n.d.).

Kniberg & Skarin (2009) defined some basic steps for Kanban implementation, which are the

following:

1. Visualize the workflow of the organization

2. Limit the Work in Progress (WIP)

3. Measure the lead time of the workflows and optimize these

These are very broad steps. In order to properly implement Kanban into an organization, the steps

must be more detailed and well explained. Planview Leankit (n.d.) suggests the following five steps:

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1. Map the current processes: what steps does work go through before it is completed?

2. Visualize the work that needs to be done on a Kanban board (Figure 10).

➢ Create a card for each task on which you write what needs to be done. Then,

categorize these cards in different “lanes”: to be done, doing now, and done. These

cards are the so-called “kanbans”.

➢ Do this at team level and individual level.

3. Focus on the flow of the tasks: work must move from one step to another without disruption

or delay. When one lane contains much more cards than another lane, this might be a

bottleneck. Try to eliminate this bottleneck by checking where it goes wrong. By doing this,

the flow can be optimized.

4. Limit the Work in Progress (WIP):

➢ One of the most important parts in Kanban implementation

➢ Limiting the WIP leads to for example an increase in speed, better work quality and

smoother handovers.

➢ WIP are the cards present in the “doing” lane.

➢ Set limits at team level (increases productivity and efficiency) and individual level

(helps to stay focused and eliminated distraction).

5. Measure and improve: measure and analyze the performance of the team by checking the

lead time and cycle time. The lead time is the time between customer order and product

delivery, the cycle time is the time between the start of working on an order and when the

order is finished. Try to optimize this continuously.

Figure 10. An example of a Kanban board (Planview LeanKit, n.d.)

Kanban is a method with the purpose of eliminating inventory and overproduction. At Universal

Corrugated Kanban can be very useful for the engineering and sales process. These processes both

deal with a lot of tasks which are sometimes performed at the same time. Especially overproduction

is something that is visible in the sales-engineering process: the engineers make mistakes in the

drawings or do not make the drawing in the correct format. This is an example of overproduction and

a non-value adding activity. Kanban creates an overview of the tasks that need to be done and this

way, it is much clearer what needs to be done and for example, in what format they need to make

the drawing. Also, employees do not work on too many tasks at the same time, which eliminates

making mistakes. Thus, the employees will have their things in order, which eliminates

overproduction.

The basic steps of Kanban are visualizing the workflow, limiting the Work in Progress (WIP)

and measuring and optimizing the lead times of the workflows. By following the Kanban steps, the

WIP can be reduced and the workflows can be optimized.

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In Table 9, by “team” we mean the sales team and the engineering team. The engineering

department can divide their employees in a mechanical team, electrical team and a software team.

The engineering manager is the leader of these three teams.

Table 9. Application Kanban into Universal Corrugated B.V.

Steps How to apply? 1. Map the current processes The flowcharts in Chapter 3 show the steps

work goes through before it is completed. However, these flowcharts are very global. The employees of the engineering and sales process should elaborate these flowcharts, so that every small task is evident.

2. Visualize the work that needs to be done The first thing to do in this step is to create cards for each task within the two processes. The employees can use sticky notes as cards. The tasks written on these cards are the working elements, such as “determining measurements”. The employees need to write these elements on the cards and put them in the “to be done” lane. The engineering team can do this at team level and individual level: each team has one Kanban board and every individual employee has a Kanban board. The sales team only has to do it on team level, as the sales process is only one person. The Kanban board is an A1 or A3 paper on which the lanes are drawn. The employees can pin the papers on the walls next to their desks. They also need to write down deadlines for the cards to move forward to the “doing” lane. They can write down these deadlines on the cards. When the cards are in the “doing” lane, they need to write down a deadline for the cards to move to the “done” lane. Thus, the deadlines are: from “to be done” to “doing” and from “doing” to “done”. The employees need to measure the lead time of the different tasks. The lead time is the time it took to finish their tasks between the customer order and delivery.

3. Focus on the flow of tasks The cards in the “to be done” lane, have to move to the “doing” lane when the tasks are performed, and then to the “done” lane when the tasks are done. The employees must keep an eye on this flow: do the cards move from one lane to another without disruption or delay? Does one lane contain more cards than another lane? This might be the bottleneck; try to eliminate this bottleneck by checking where it goes wrong.

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4. Limit the WIP Set a limit to the amount of cards that is allowed to be present in the “doing lane”. This could increase speed and quality. Do this at individual level and team level. The maximum amount depends on the level of knowledge of the employee and the difficulty of the tasks. When the tasks are difficult, the maximum is lower than when the tasks are easier.

5. Measure and improve The team and individual employees must check the lead time of the different task after they set the WIP limit. Is it optimized? If not, try to set another WIP limit or check where another bottleneck might be.

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Chapter 6: Conclusions and recommendations This chapter is the final chapter of this thesis and contains a conclusion of the whole research and

the recommendations we have for Universal Corrugated regarding the optimization of their business

processes. The research mainly focuses on the sales-engineering process. However, the

recommendations also contain advices for the other processes within the company. Section 6.1

describes the conclusions and Section 6.2 describes the recommendations per business process.

6.1 Conclusions This section sums up the conclusions we are able to draw from this research. The objective of

this research was to optimize the business processes by eliminating the wastes in order to increase

the Return On Investment (ROI). We focus mainly on the sales-engineering process. To achieve this

objective, we established a research question: “How can Lean Management be best applied to the

optimization of the sales-engineering process at Universal Corrugated B.V.?”. The road we take to

answering this question was by answering a few other investigative research question.

The first three research questions are about Lean Management. Lean Management is a

methodology to run, plan and control operations with the purpose of meeting customer demand

with perfect quality and minimum to no waste. Waste are activities that do not add any value to the

company. There are seven types of waste, ranging from the waste of over-production to quality

waste. To eliminate these types of waste, a company can apply several Lean tools, such as 5S,

Automation or Total Productive Management.

Research questions 4 and 5 are about the current situation at Universal Corrugated.

Universal Corrugated B.V., a company of about 40 employees, is a small- and medium-sized

enterprise (SME). It is an unstructured company and there are no working patterns or documents

that contain the working standards. The core problem of this research is the informal structure,

which leads to several other problems. The communication and collaboration between the

employees and between the departments are very weak. Also, the employees do not always have

the discipline they should have. Looking specifically at the shop floor, the employees complain about

materials and information not being received on time or not having the right quality. These are

materials and information received by both their colleagues and the third-party deliverers. Also other

departments complain about receiving low quality information. When linking problems to the triple

constraint (quality – time – budget), we conclude that the quality of the end-product is too low

(quality), the lead time is longer than necessary (time) and the ROI is at or beneath breakeven

(budget). The low ROI is caused by high production, quality and stock costs. Sometimes, due to

engineering mistakes or changes, the shop floor mechanics need to adjust the machine after the

customer already paid the machine. These changes cannot be charged to the customer, which

increases quality costs. The high stock costs are a result of materials being ordered when they are

still in stock, wrong materials being ordered, or unnecessary sub-assemblies being produced. Some

problems can be linked to one (or more) of the seven types of waste. The two types of waste the

company mostly has are motion and defectives. Motion is the waste of looking busy, but not adding

value at all. Defectives are quality wastes.

We answered research question 6 “What Lean tools would be best to optimize the sales-

engineering process at Universal Corrugated B.V.?” by establishing criteria, giving weights to these

criteria and eventually giving scores to the different tools, we conclude that the top-3 of best Lean

tools are: Standardized work, 5S, and Kanban. These tools focus on – respectively – integrating

working standards, improving quality, and limiting the Work in Progress to eliminate overproduction

and inventory.

The last research question answered how to apply the top-3 Lean tools to Universal

Corrugated. The four tools all have different steps to apply to tool into the company. However, in all

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tools, one of the first steps is to analyze the processes and to check whether the implementation is

needed and in which area of the company it is needed. It is also common in the tools to create teams

to perform the implementation. One of the last steps in almost all tools is make the new way of

working the standard and to continuously improve this standard.

The investigative research questions helped to create an answer to the main research

question. Lean Management can be best applied to the optimization of the business processes at

Universal Corrugated B.V. by implementing the Lean tools 5S, Kanban, and Standardized work.

Furthermore, the employees must analyze the business processes step by step and create teams to

perform the implementation. Also, the management must teach the employees about the different

Lean tools and discuss the benefits the implementation can have for the company and the

employees. By applying the four tools, the quality can improve, the lead time can decrease and the

costs can decrease.

6.2 Recommendations This section contains the recommendations we have for Universal Corrugated regarding the

optimization of their business processes. Even though we focused on the sales-engineering process in

this research, we also give recommendations to most of the other processes within the company. At

last, we give some general recommendations for the management team of the company.

6.2.1 The sales process Motion and defectives are the two wastes we mostly recognize in the sales process. The defectives

are caused by the low quality of the delivered documents, for example drawings in which required

information is missing. To retrieve this missing information, the sales employee needs to ask for

corrections and has to wait for the engineering employees to fix this. This is the waste type “motion”.

It is very hard for the sales employee to eliminate these wastes, as it is something that is caused by

another department.

A recommendation for the sales department is to find out what the customer’s quality

requirements are for the end-product. At the moment, the quality requirements are not clear and

the production employees do quality checks based on their own requirements. However, in the end

it is the customer who decides whether something meets the requirements or not. The quality

requirements must be clear before the machine is built.

6.2.2 The service / spare-parts process The service / spare-parts department has three different types of waste: over-production, inventory

and defectives. Over-production is caused by ordering products that are not needed. These products

are still in stock, but the system shows a different stock. A new ERP system will be installed soon,

which hopefully eliminates this problem, so that the stock in the system is always correct.

Inventory is a result of ordering wrong materials, which leads to the product being stocked in

the inventory. The service / spare-parts employees must pay close attention to which products they

have to purchase. Defectives are caused by ordering low quality products and receiving low quality

information.

The engineering and sales departments both receive unclear and informal information from

the service / spare-parts department. Information is transmitted by e-mail instead of orally and this

sometimes results in information not being received the way it should be. It is useful to organize

meetings when important information needs to be transferred. Also, when information is transferred

by e-mail, the information needs to be very clear and detailed, so that it is understandable for

everyone.

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6.2.3 The engineering process Over-production is a waste type that is present in the engineering process. The sales employee

receives 2D drawings of the factory of the customer. The engineering employees make a 3D drawing

of the machine to be built and sends it to the sales employee. The sales employee must then put the

two drawings together, but this is very hard when the two drawings do not both have the same

format. The engineering employees over-produce, because they make drawings that are not needed

for the next step in the process. A recommendation for the engineers is to make the drawings in 2D

(only 3D when the customer delivers 3D factory drawings). The drawings of the machine must be in

the same format as the drawings of the factory delivered by the customer.

Sometimes drawings are not complete (such as missing measurements) or very vague. In

order to avoid discussions or unsatisfied production employees, the engineering employees need to

check each other’s drawings before they are handed over to the next department. This way, they can

eliminate mistakes and save time. They also have to avoid making changes after the contract is

signed by the customer. It is ideally that every lay-out is right at the first time.

6.2.4 The production process At the shop floor, and especially in the warehouse, it is not always clear what items are in stock or

not. Also, the system does not give the correct stock. A recommendation to avoid this is to use ABC

inventory. ABC inventory classifies inventory items into three categories:

• Category A: most valuable items

• Category B: moderately valuable items

• Category C: least valuable items

This method aims to manage the A-items and wants to avoid the waste of precious resources by

managing the C-items. Managing the inventory items will result in keeping inventory costs under

control and improve the company’s competitiveness (Kaabi, Jabeur & Ladhari, 2018). Also, by

implementing the ABC system, items are better organized and thus, it is more visible what is and

what is not in stock.

For the process of building the machine, the Lean tool Single Minute Exchange of Die (SMED)

can be useful. This method reduces setup changeover times. This means that the time between

changing from the current order to a new order will be minimized. The method increases

productivity and minimizes production costs. In this method, we make a distinction between external

and internal changeover times:

• Internal: the work elements that can be done only when equipment is not running

• External: the work elements that can be done when equipment is running.

According to Díaz-Reza et al. (2017) the implementation of SMED can be divided into several stages:

1. Identification stage

➢ Examine the process by doing a continuous production analysis.

➢ Video record the whole setup and changeover process.

➢ There is no distinction made between an internal and external process.

2. Separation stage

➢ Distinguish the internal and external setup activities and separate them.

➢ This stage results in a setup time reduction from 30% to 50%.

3. Transformation stage

➢ Implementation stage.

➢ Convert as much internal work to external work as possible: work on the greatest

number of tasks while machines are running.

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➢ Examine whether some work has been wrongly assumed to be internal while it was

external work.

4. Improvement stage

➢ Streamline and standardize the aspects of the setup process.

➢ Review all elements in order to continuously improve them.

6.2.5 The purchasing process The purchasing employees sometimes order the wrong materials. This is due to the incorrect system

or because other departments accidentally want to order materials they do not need. It is useful for

the purchasing process to double check whether the materials are needed. The incorrect stock will

hopefully be eliminated by means of the new ERP system.

6.2.6 The management team We consider the management team to be the plant manager and the managers of sales, production,

service/spare-parts, purchasing, and engineering at Universal Corrugated.

It is useful for the managers to set their priorities straight. This means that they must make a

daily priority list and encourage their employees to work from the top priority to the bottom priority.

It is important that the management team also checks whether the employees worked on the

priorities in the right sequence. If this is not the case, they should organize a meeting to remind them

of the benefits of working priority-wise. Benefits are for example getting work done in time,

providing a better quality, less stress and an improved efficiency (ProofHub, 2018).

The managers must really look into their third party deliverers. Products are not of the best

quality, but are still used for the machine. This causes lots of care after the end-product is installed in

the factory of the customer. Investing in higher quality products eliminates this after-care and can

save a lot of money. Some products do not meet the accuracy, so that the production employees

need to adjust the products. Sometimes this is not even possible, resulting in the employees

throwing away the unusable products. Also, some deliverers do not deliver the complete order, they

deliver the wrong materials or they deliver too late. This is a waste of time and the departments

need to wait for the deliverers to deliver the right products before continuing with the whole process

of building a machine.

Some machines for producing sub-assemblies and the resources for testing the incoming

products are outdated and lack some quality. Investing in these resources can save time and money.

This also counts for the software system that goes into the machine.

Overall we can say that every department needs to implement 5S into their process, so that

everything is organized and the quality can improve. This eventually results in better collaboration

between departments, because higher quality information is transferred between the employees.

There must be a first time right prospective. Furthermore, the management need to write down the

standard and standardize every process within the company. Job procedures must be clear for the

employees and must be present in documents. When the company implements 5S and maybe other

Lean tools), the lead time can reduce and the quality can increase. Also the production, stock and

quality costs can decrease. This eventually leads to a higher ROI.

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Appendix

A. Organogram

Stock holder

MINDA group

Sales managerService / Spare-parts

employees

Service mechanics

Engineering manager

Mechanical engineers

Electrical engineers

Software engineers

Documentation employee

System control employees

Production manager

Job preparator

Electrical mechanics

Mechanical mechanics

Operating mechanics

Purchasing manager

Warehouse manager

Accountancy/reception employee

Cleaning

Plant manager

Universal Corrugated B.V.

45

B. Flowcharts

B.1 The service / spare-parts process

46

B.2 The production process

47

B.3 The purchasing process

B.4 The accountancy process