Mattress Manufacturer
Challenge:
Largest Mattress Manufacturer needed to maintain a competitive position by reducing lead times to increase customer responsiveness.
Solution:
Implement an enterprise-wide lean transformation and culture in 26 factories. Install a lean management system and create regional capability for building and shipping customized products within 48-72 hours without building any finished goods inventory.
Results:
Total inventory was reduced by 62%. The company achieved 48-72 hour lead times vs. competitors that took 8-10 weeks. Working capital was reduced by $1.5 million. Labor cost was reduced by 23% by reducing overtime and scheduling properly. And, the company implemented a management system to support culture change and a Best Practice system to ensure metrics alignment.
The bedding industry is very competitive. While many of their competitors saw China as the low-cost solution, this company chose to stay in the US and reduce lead time and supply customers quicker to gain market share. During their Lean Journey, they reduced inventory, freed-up cash, implemented policy deployment and developed short and long-term strategic plans. This bedding company began their Lean Journey as the world’s largest bedding manufacturer, being number one in U.S. market share for over 20 years. However, their 26 factories in North America were typical of the entire industry — inefficient batch and queue piece-rate production with mountains of inventory.
How was this accomplished?
To get the competitive advantage, this bedding company wanted to reduce lead time from order received to delivered to the customer to 48-72 hours. That sounds difficult enough but add the constraint that there will be ZERO finished good inventory!
After the initial assessment, he first event was a corporate event to establish shipping and distribution guidelines to meet the delivery expectations and the lead time. Also in the event we consolidated multiple sites and established dedicated customers by site based on a 300-mile circumference around each site. This circumference was established based on a one-day delivery pattern for shipping. If there were any overlapping circles, there was an opportunity for consolidation. This was mainly the case in the
North East Region. People think of Bedding as having just a few SKU’s…Twin, Full, Queen, King and Cal King, but they don’t
consider the complexity of the process due to the mix of SKU’s. For instance: Will it be Memory foam, latex, innerspring? There are multiple types of memory foam, latex and innerspring for example differences in innerspring can be size (5), gauge of coil (3), type of coil (4), Continuous, Bonnell, Offset, Pocketed. This alone is over 60 variations of product. Next, there are literally hundreds of tick. (that is the type of fabric to be put in multiple sewing locations). Then there are multiple “toppers” that are pre-cut to size creating the desired feel of the mattress. And of course, you decide if you want two-sided, single-sided, Euro-top, Pillow Top (About 3 or 4 different sizes), Polyfoam, Innerspring and Memory foam or Polyfoam Latex Hybrid, etc. Then there are hotel specific, celebrity, NBA and other specialty beds.
There are literally thousands of SKU variations which would make the customer requests difficult.
Create Flow / Synchronize Operations / Establish Ergonomically Safe Conditions
Our first visit to a site left us concerned about the amount of lifting and carrying of this huge product. As we completed each Kaizen event, we made between 12 to 30 safety and ergonomic improvements. A large portion of these was focused on reducing or eliminating lifting. Another issue was that we never knew where we were in the build throughout the day.
Sewing Department
We knew we would have to link stations and synchronize the Sewing Department, then synchronize sewing to Matt Build. Matt Build is the “center of the universe” for a bedding company. In order to meet schedules, sewing components must be delivered in a timely manner. In order to do this we:
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1. Established time phased purchasing and scheduling processes
a. Due to delivery requirements and production schedule, planning and scheduling MUST
be completed prior to the 7:00am start every day.
2. Implemented SMED improvements on Quilter Machines
3. Developed KanBan system at Quilters and at Boarder Rolls
4. Linked multiple sewing stations and developed Sewing Cells
5. Established sewing “trains” to organize and move product efficiently
6. Developed Sewing Room Water Spider System
7. Linked Sewing Room Schedules to final customer and Matt Build demand.
8. Established new manufacturing rules related to sequence of build for each day
9. Implemented station by station quality checks eliminating a quality check station.
Matt Build Department
1. Delivery system from Sewing to a Matt Build “Supermarket”
2. Developed and implemented multiple Matt Build Supermarkets based on bed size.
a. During the event we established specific “shopping” or Raw Material picking patterns.
b. We designed and built one pc. flow picking carts that would hold the innerspring,
memory foam, pads and toppers, and all the sewing parts for ONE BED.
c. Based on water spider time observations, customer demand and Matt Build cycle times,
we were able to staff the picking of the product efficiently.
d. The Water Spiders would deliver to specific Matt Build Cells and the carts must be
placed in the correct location and orientation to eliminate excessive handling by Matt Build Operators.
3. The complexity and mix of the beds decided how the Matt Build cells would be designed.
a. Once Matt Build cells were designed, we established what we called “the dance” which
is basically sequenced standard work for the Matt Build Team. What we initially saw was that people on each team would finish their part of the build at different times. To address this, we came up with a revolutionary design in a 2P event. Prior to the event, Matt Build was done on a stationary table. The product would be placed by multiple
people layer by layer on the table for the build. This created too many opportunities for incorrect builds, was time consuming, created excessive walking around the table and product during the build of each unit and was a safety issue. In the event we developed a rotating Matt Build Station. This allowed us to establish step by step standard work for each operator, the Matt Build table would now only be staffed with 2 people. (This was a minimal staffing due to ergonomic and safety concerns with moving of product) These operators would remain stationary as they worked on each unit. They were each assigned opposing sides of the mattress and would complete two sides each, rotating the mattress as they progressed. The only movement they had to make was reloading of tools and back and forth to the parts cart which was a couple of feet away.
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Matt Build to Wrap and PackOne of the largest safety and ergonomic improvements we made was related to flow of the completed mattress from the Matt Build Cells to the wrapping and packing operation. What we initially saw was a flat manual conveyor and the beds were stacked one on top of the other as they made their way down to wrapping and packing. As packaging operators needed specific products to fill a truckload, they would come up and down the conveyor searching for the correct mattress and if they found it, they would hand carry the mattress (Over their heads) to the packaging area. We purchased an automatic horizontal conveyor to move the finished product from the build stations to wrap and pack. This eliminated traffic causing chaos in the Matt Build area from wrap and pack and eliminated the ergonomic and safety concern of carrying this product through the shop floor. Although this was a rather inexpensive cost, it was probably the most expensive thing we did in the lean journey. There were sequencing, point of use cell development and safety improvements made in the wrap and pack area. Once packed, the product would initially be staged in a large area waiting for the trucks to be backed in and loaded. Initially, it seemed like every unit loaded was like going through an Easter EggHunt to find.
In the packaging event, first we established a cart system. Units would be placed on carts and would be stored based on the truck and drop number written on the unit in packaging. This allowed us to organize the loads like organizing books in a library. Second we were tasked with establishing Live Loading. What this meant was that empty trucks must be placed at the dock doors prior to production start. Each dock door was assigned specific loads and as the product came out of the wrap and pack area it would NOT be staged, but loaded directly on to the truck. This required us to drive production scheduling even further! Not only are we scheduling by the day, but we are scheduling based on the different loads for
the day and when those loads must leave to deliver on time AND we must schedule based on first in, last out by load. This allows us to load the nose of the trucks (with the last load to be delivered) first and the tail of the trucks (with the first load to be delivered). The trucks had anywhere from 1 or 2 stops all the way to 12-15 stops, so sequence of the build and load was extremely important. With the number of shipping dock doors we had, we were able to establish a morning load and those trucks would leave when load complete, but before 11:00am and an afternoon load. Our yard dog would reload all the dock
doors with empty trucks while manufacturing was on their lunch break.
What I have discussed until now is all of the lean transformation on the shop floor, but it would not have worked unless we made a few improvements and established a SYSTEM to sustain all of these improvements. Now I will discuss some of the events that occurred throughout the shop floor implementation that gave structure and support for all these changes.
Demand Segmentation
With the requirement of zero finished goods it made it imperative to ensure we had the raw materials on hand to complete orders on time for customers. I am sure most people are thinking of large Raw Materials warehouses, but the contrary is true. We completed a demand segmentation event by finished good SKU and driven down through BOM to component raw material. By completing this we were able to establish blanket orders of our high volume product and we were able to calculate min and max levels for orders that were made more inconsistently.
Supplier Development
Once this was completed, we did some supplier development to make sure our suppliers understood the gravity of on-time deliveries to us.
MDI & Visual Management
Another early implementation was MDI (Managing for Daily Improvement) and Visual Management. This was a consultant lead event at every site due to its importance. The event was for Line Leaders, Supervisors, Managers and Plant Managers (and initially we had Regional Vice Presidents) in the event. This higher level of management engagement was critical to demonstrate the importance of the Lean Journey. In the event we established a level understanding of Lean and the tools we would use to run our shopfloor. In order to do this, Sealy would fly in management from other sites to run the shop floor while we were in class. The class was a 50% teach – 50% do style where each department would get improvements throughout the week. ALL of management was coached on the transition from traditional management to lean management.
Another deliverable for the week included written standard work (to include time for the new lean techniques) for every individual in the class. At the end of the week we reported out the improvements made that week, but we took it a step further. Each member was to develop an outline for a 20 day project that they would complete. These were not meant to be large improvements that you would see in Kaizen events, but an incremental improvement to the work area they are responsible for. In the outline they would discuss current state, why it should be changed, what gain we would get and what Lean tools they would use during the problem identification, analysis, resolution and implementation. The topics would get manager approvals. If they needed help the consultant would mentor them remotely. At the end of the 20 days they would give a quick…few slide presentation of the improvement with before and after pictures. Once complete, they would start their next 20 day project.
TPM
We did TPM on critical to process equipment, Implemented TPM, OEE and Critical spare parts inventory processes.
Best Practices
After the first year, we established a corporate Best Practices spreadsheet. Because each site had a different mix of products and other concerns, we developed a weighed system to analyze each site by department. This allowed us to truly see who was Best Practice and use this information to improve upon areas of weakness at other sites. This company was managed on a regional basis and there was east coast, central and west cost regions. Once we started the Best Practice tracking, there became a regional and site competition to be the best!
Sealy did a good job establishing a succession plan involving operators moving to Lean Technicians that may eventually be promoted to supervisors and CI coordinators that would be promoted to Plant Managers (Based on performance).
Another thing Sealy did well was assigning team members from multiple regional sites to each consultant led event. Their purpose was to be team leaders on similar events at their sites (Yokoten or broadcast improvements). Here is an example from one site as to how this was tracked:
This entire journey continued from October 2003 to September 2010. During this time frame, they held #1 market share in bedding in the US. In 1997 they were purchased by a private equity group and again in 2004 another private equity group who liked our continuous improvements and let us continue the journey. ALL of their management had been trained on Lean techniques and performance was obvious. Their strength in the market continued to grow.
"So far, we've cut total inventory 62%", states Shailesh Patel who was initial region management to accept the Lean Journey. "For a business our size, a one-day reduction equates to about $1.5 million in freed-up cash."
In September 2011 a competitor purchased the company. Since then, the market share has greatly decreased. They disassembled the CI office and went back to traditional management techniques. Within the bedding industry, there were 2 acquisitions by competitors that took the top 4 companies to only 2. This company is now in second place in market share.
Interim Results : Example from one site
