Lean implementation reaps hefty rewards

WINNER of this year's Enterprise Connect Significant Achievement Award, Therma Truck, commenced building refrigerated truck bodies and vans in early 1970 and soon achieved a reputation for its high quality workmanship. 

The company started with two main objectives; to build a high quality product that was robust and reliable and secondly the product had to be competitively priced.

In July 2011, Enterprise Connect Business Adviser John Mills conducted a workshop with the management team at Therma Truck which concluded that adopting Lean Manufacturing principles would reduce lead times, improve ability to complete work within budget estimates and improve profitability. 

Funding from Enterprise Connect helped minimise the initial financial impact of engaging an external consultant.
The results experienced were transformational in that labour hour variations were reduced by half and average hours per job reduced. 

There was also a significant reduction in overall inventory, simplified purchasing process from use of Kanban and improved employment prospects for staff.

Despite these achievements, Lance Raines, Therma Truck's GM said he was shocked at winning the award.
"I had a look at the other finalists and I thought we didn't have a hope in hell," he said on the night.

The judges obviously disagreed with Raines assessment as they commended the changes and the diversification that has taken place within the company.

Enterprise Connect judge, Narelle Kennedy founder and CEO of Australian Business Foundation said that Therma Truck adoption of lean manufacturing had unlocked value in the business, plus the company had deliberately sourced new ideas and trends which were supporting the product range and a clear path of innovation had been set for the future.

"Therma Truck has demonstrated results that are transforming their business of producing high quality refrigerated truck bodies and vans," said Kennedy.

Fellow judge, Andrew King chair of the NSW Manufacturing Industry Taskforce acknowledged that efficiency was a key factor to them winning and was positive about the future of the company.

"I was impressed that in a fairly short time since Therma Truck's introduction to Enterprise Connect they had taken decisive action to implement Lean and the gains are evident from the wide range of metrics reported."

"The speed with which these gains have been achieved suggests they have more benefits to come as the management and workforce adopts the philosophies and culture beyond the first flush of energy," said King.

Therma Truck has invested considerable resources into developing new innovative ideas and products to support their current product range as well as looking at long-range trends in the industry to improve their refrigerated truck bodies and vans.

Raines said he was initially hesitant about enlisting the help of the Enterprise Connect program, believing it to be too good to be true.

"From a management point of view we thought this is Wizard of Oz stuff, click your heels together and everything will be fine but we said yes we are going to support it and we did everything possible," said Raines. 

"We have made significant progress in a very short space of time. We've only been in this lean process for a matter of about five months and we've made significant in-roads. We've halved some of the production figures from what we had before," Raines said.

When asked why he thought Therma Truck won, Raines emphasised the role that Production Manager Steve Scott had played in the fast implementation of the lean processes.

He said Scott had worked with the consultant to ensure that visible and sustained results were achieve and new concepts such as identifying and eliminating "non-value add" were soon being used by staff.

"We embraced it so quickly and much of the thanks for that must go to Steve Scott, he's really driven this and taken it on board. 

Of course he's had the support from management but he's the one that really deserves this. This is his," said Raines.

Key achievements in Therma Truck' Lean journey include:

  • Assembly area divided into four stages with dedicated staff in each stage. This simplified training, supervision and performance measurement.
  • Dedicated mobile tool and materials trolleys. This reduced movement and time looking for tools and materials. 
  • Staff cross trained by their peers on rotations through production stages also creating task variety. 
  • Process changes simpler to implement as only relevant staff require training on the new process.
  • Weekly toolbox talks in combination with action boards to engage staff in decision making.
  • Visual techniques to highlight material shortages 
  • Supervisors allocated geographic areas of responsibly to ensure routine tasks such as housekeeping and maintenance.
  • A tidy efficient workplace increases safety and general pride amongst our personnel. 
  • Kanban material replenishment and decentralised store points were implemented, which significantly reduced stock outs and overall inventory levels.

Chocolatier Australia was highly commended by the Enterprise Connect program.

Image: Therma Truck's Steve Scott (left) and Lance Raines (centre) receiving the award from Judith Zielke, Head of Enterprise Connect.