South-Western - Management  
The House that Lean Saved
Topic Managing Service and Manufacturing Operations
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Key Words Lean manufacturing, productivity, value stream mapping, kaizen
News Story

Hoffman Enclosures Inc., founded in 1945, produces customized enclosures that protect electronic controls and critical electronic systems in industrial, data communication, commercial construction, and government applications. The plant is successful today, but it was almost shut down in the late 1990s because it was having trouble maintaining profit and efficiency.

In 1999, a vice president at Hoffman Enclosures told Dennis Spiess, director of Minnesota operations, about the Toyota Productions System. He told Spiess that he needed to get together a team of people who could understand the process and apply it at Hoffman. Spiess put together a team of people that spent the next two years putting together a lean initiative at the Minnesota plant, convinced that it would be the thing that could save them.

In 2001, Spiess and his team were facing the possibility of business leaving the plant and moving to China or Mexico. Business had begun a slow-down in 1999 that had meant the first layoffs in the company’s history—300 people. The time had come to implement a change.

Lean manufacturing required the company to readjust its core operations, beginning with the implementation of value stream mapping. Cutting back on inventory helped. Hoffman also instituted audits to ensure the quality of its enclosures. One process is an out-of-box audit in which a finished box that is ready for shipping is randomly selected, opened, and checked for quality. Another type of review process is the live audit. This process follows a product through the entire assembly route, with a team reviewing every step to ensure that all practices are followed exactly.

Hoffman has seen its lean practices pay off in five years. The company has never been more profitable: sales and productivity have jumped more than 37 percent, delivery reliability is up 14 percent, and inventory turnaround has risen by 40 percent.

Lean procedures have also helped to improve safety, where incident rates have dropped by 22 percent. The company ensures the ongoing success and evolution of the lean strategy at Hoffman through the efforts of a committed team of 11 employees whose job it is to keep the lean strategy going strong at the facility. The company is also dedicated to ongoing training and education about lean principles. In 2006, more than 300 Hoffman employees participated in kaizen and other lean events in order to improve their own work areas.

Questions
1.

What are the core elements of lean manufacturing? What specific methods has Hoffman Enclosures, Inc. implemented?

2.

What is “kaizen” and how does it apply to lean manufacturing?

3.

What are some methods for measuring improvements in productivity? What improvement has Hoffman seen in productivity and why?

Source “The House that Lean Saved,” Industrial Engineer, August 2007 v39 i8 p50(2).
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