Lean Management: Methods and principles at Bäumer

A historic success story

Already in the 1970s, a company in the automotive industry stood out with a seemingly unbeatable concept for increasing competitiveness: Toyota.
For years, the automobile manufacturer was known for its innovative approach and it became a shining example for various other producers in its industry. To this day, Toyota is one of the world's largest automobile manufacturers and still one of the most profitable players in the industry.
Taiichi Ohno, the father of the Toyota Production System, summarized the secret of the company's success as follows: “All we do is pay attention to the lead time from the moment we receive a customer order to the moment we receive the money. We shorten the lead time by eliminating all components that do not create added value for the customer.” This sounds promising and not even difficult to implement – but this understanding only formed the basis for implementing the steps that led to success. During this time, a revolutionary idea was born that focused on the customer's added value – known today as Lean Management.

Lean Management refers to a cross-divisional optimization that aims at improving the efficiency of work processes. It begins where the customer submits his order to the company, and it ends when payment is received. But what does this optimization process look like and how does it work? And what criteria must a company pay attention to if it wants to eliminate all components that, according to Ohno, do not create added value for the customer?
To this end, Lean Management splits the production processes into two categories: Value creation and waste. Here, value creation refers to everything that is valuable for the customer and his final product. The company’s goal is then to minimize waste and at the same time create more capacity for value creation.
A concrete example of this would be the reduction of waiting and idle times caused by organizational factors. Inadequate planning of workflows can cause production processes to come to a standstill. Often parts of the final product lie in one place for several days or weeks, waiting to be processed. The time in which these parts lie idle is classified as waste. Therefore, the ideal is a production chain in which every part is processed or finished immediately and without any waiting times: 100% value creation – the customer gets his product faster and the product uses fewer resources.

Now, this is all very theoretical. But for some years now, Bäumer has been practicing a lean way of working, too. We want to align our production even more closely to the needs of our customers, while at the same time conserving our own resources and making the best possible use of them.

Practical example: Lean Management at Albrecht Bäumer

Four years ago, Peter Paetzold, our Lean Management consultant, was hired specifically for his work around lean working. Since then, he has been working together with colleagues from various company departments to make work and production processes more efficient. The first step is to analyze the path of a product through the design and manufacturing process up to its assembly.
This analysis usually begins at the end of the production chain: during the final assembly of the machine in our workshops. “Assembly is a reservoir of all the organizational problems that precede it in the production process,” says Paetzold. Many undiscovered errors, whether of an organizational, scheduling or qualitative nature, become clearly visible here.
The moment everything is put together, it becomes clear whether all machine parts and process steps were precisely coordinated in the run-up to assembly. Missing parts or lacking precision that needs to be reworked by hand in the final step – incidents such as these can sometimes drive assembly workers crazy.
Although an analysis of the status quo can begin at this crucial point in production, the comprehensive overview of the entire company must not be ignored. Each gear that is turned must be adjusted to its neighboring gears. The analysis starts at the point of value creation, in assembly, but then extends globally to the upstream areas, because this is the only way an all-round optimum can be achieved.
So, while everything begins with an analysis that starts at the end of a product's path through the company's various departments and follows it backwards to the beginning of the process, Lean Management definitely doesn't stop after the analysis. This is the starting point for the specific measures.

Optimization, streamlining, value creation

“Keeping the quality of the product at an optimal level. Using your own resources efficiently. Increasing the added value of your own production”.
All of these goals should be implemented with the help of Lean Management. When asked “How lean are we really?” Paetzold gives a little grin. After all, a company can always do better.
In 2018, Bäumer took on a challenge that was anything but “minimal”.
With the creation of a new assembly concept for one of our workshops, the team around Paetzold focused on the identified weak points of the final assembly and developed innovative solutions.
In the past, our employees were often confronted with a less than ideal working environment. Cluttered assembly stations, overloaded order picking trolleys and far too little space made the completion of a machine much more difficult. By using temporary barrier tapes and a confusing way of dividing work and workplaces, we temporarily endangered the safety of our employees as well as the usual quality and reliability of our production.
In order to be able to significantly improve the assembly, the basic concept was refined first. With the calculation of the customer cycle, it became possible to precisely determine required cycle times and buffer stocks as well as personnel requirements. This way, all these influencing factors could be coordinated and harmonized with each other. Today, the assembly workers in this hall work with floor markings and make use of workplace-specific supply trolleys and a two-bin system for C-parts.
In renewing the assembly line, Bäumer was guided by the following four principles of Lean Management: Freedom from interruption, flow, rhythm and pull. These four principles can also help your company get started on a less wasteful production.

The four principles of Lean Management

A production can only be kept flowing if trouble-free processes are guaranteed. Therefore, ensuring freedom from interruption is the cornerstone of lean working. The assembly must be free of missing parts, must not be supplied with incorrect drawings and should be supported by foresighted capacity planning.
When interlinking the work processes, care must be taken to ensure that they are suitable for the material flow. This means that the individual stages of the process chain must be meaningfully represented in the layout (flow): The paths of the product are short and do not cross.
The third principle is rhythm. It is determined by the customer and his demand behavior. The cycle times of the stations can be coordinated according to it and as a result, waiting and idle times can be minimized.
If these three principles cannot be implemented in company practice, the pull principle comes into effect. Those who work based on pull only produce what is needed, when it is needed. Kanban is an example of this.

And now?

As already mentioned in the beginning: You can always go leaner. “The status quo of the process towards becoming lean is always the ‘worst case scenario’, even after improvements have been made,” says Bäumer's Lean Manager Peter Paetzold.
We are continuously working on making our processes less wasteful. Our focus will continue to lie on the customer’s added value in the future. Through lean working we optimize our strategic demand planning and shorten our delivery times. We develop products for the real-time monitoring of the machine purchased by the customer so that we can satisfy our customers in every aspect, not only when it comes to production and delivery, but also during the operation of our machine.
Lean Management is exciting and offers great opportunities for a company, but it also presents a great challenge at the same time. Of course, it is precisely this challenge that serves as a daily source of inspiration for Paetzold: “I am particularly enthusiastic about the technical complexity that my profession entails. I have to know all parts of the company and work with different people every day. I also often have to convince my colleagues that the steps we are taking with Lean Management are worthwhile and will pay off.”
The complete reorganization of the outgoing goods department also posed a major challenge for the workforce in 2017. This reorganization as well as the introduction of Microsoft Navision and the expansion of its functions in the following year were important steps towards a lean way of working. Together, our team was able to face these changes and deal with them successfully. And so, this will continue to be the motto at Bäumer in the future:

Step by step towards Lean.
And at the same time an even stronger orientation towards the customer, further towards perfection.