How we helped Brookshire’s save more than $150,000 with Lean Six Sigma
A brief description of Brookshire’s project we implemented during my Master’s Degree
Disclaimer: I have used the word “we” because it was a group project and not an individual project. I would like to thanks all of my group members who helped me during this project. This article belongs to them.
How did it all start?
During my Master’s degree in Industrial Management at the University of Texas, we were all supposed to do a project to implement Lean Six Sigma concepts at any organization. After some brainstorming, we decided to implement it at Brookshire's perishable warehouse because it was near to our house and it was easy for all of us to commute. Below is the definition of Lean Six Sigma to make it easier to understand:
According to the American Society of Quality (ASQ), Lean Six Sigma is a fact-based, data-driven philosophy of improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time while promoting the use of work standardization and flow, thereby creating a competitive advantage. It applies anywhere variation and waste exist, and every employee should be involved.
What did we do?
When we first arrived at Brookshire’s perishable warehouse, we did not know which particular process should we optimize. We were looking around all the processes during which, one of my group partners saw an unorganized storage area. This storage area consisted of freezer wears, gloves, cleaning materials, etc around all around the room. We finally decided, this is it, we would be organizing the storage area using Lean 5S principles.
But how organizing a storage area help Brookshires save more than $150,000? After some research with the employees, it usually takes about 15 minutes for the workers to gather all the necessary items from the storage room to perform their jobs effectively. Well, this is when we all decided to reduce that time from 15 minutes to 5 minutes. So, here was the scope of our project:
Scope: The scope of the project is to save the time of employees by making the storage room organized, clean and standardized so that it will be easy for any employee to collect items in very little time. This saved time for each employee can be utilized for any other useful work and increase the profit of the company.
However, in order to reduce the time for an employee to pick up an item from the storage room, we had to find the root cause of the problem. Being an Industrial Management graduate student, it was an easy task for all of us. We used the Ishikawa diagram also known as the fishbone diagram to analyze the root cause of the problem.
Here is a glimpse of our Fishbone diagram:
After implementing this concept and few brainstorming sessions, we found that the root cause of the problem is a lack of organization and standardization of the storage room.
Now, it was time to getting this problem solved.
Execution of the project
In order to eliminate the root cause, the best method of improvement is to implement a 5S technique to organize and standardize the storage area.
5S represents Sort, Set in order, Shine, Standardize and Sustain. It is a visual management technique used to organize any workplace in order to maximize efficiency and increase profit.
- Sort- In the very first step, we sorted all the wanted and unwanted materials. It was the right time to get rid of all the unwanted materials such as empty boxes, supplies, and equipment that were not used for a long time. This step eliminated all the waste products and increased the effective space for arranging the needed items.
- Set in Order- In the next step, we started to arrange all the freezer wears, caps, gloves, cleaning materials, etc. according to their sizes. The boxes of freezer wear were stacked according to their size and color with the label facing outwards and kept one opened box at the top. This stacking helped to save space. Items that were less in number were arranged in the storage rack. In the same way, the boxes of cleaning materials were also stacked up according to the item. We also used, blue-colored tapes to draw the area boundaries on the floor.
- Shine- Once we have set all the storage item’s in order, it was time to clean the entire storage area to maintain a clean atmosphere. This clean atmosphere should be free from dirt and dust. And guess what, we started cleaning the entire storage area and started vacuuming the entire space. This process was quite fun and enjoyable.
- Standardize- In order to standardize the process, pictures of each item along with their labels were pasted on the wall. These labels consisted of all the details of the item including the item number, size, and color. This helped the employees to easily identify the required items of the right size and color without wasting any time.
- Sustain- At last, we had to make sure everyone follows the process so we can sustain this improved process. As a result, we created an audit sheet that helped Brookshire to manage the inventory of the storage items. Scheduled cleaning sessions were also recommended to the manager of the perishable warehouse to maintain a clean environment.
Here are the before and after pictures of the storage room:
Finally, the project was implemented and we all were very happy. After carefully analyzing the improved process, we realized that now it takes every employee only 5 minutes to pick up all the required items from the storage room. Great, we finally saved 10 minutes for each employee which can be used in more productive areas. But the question still arises, How did Brookshire save more than $150,000 from this small process?
This is how Brookshire's saved more than $150,000.
According to Indeed, Brookshire’s pay $15 hourly to their order selector employees. From this, we can deduce that,
Each employee was paid $2.5 for every 10 minutes they worked for the organization.
The organization had about 200 employees working in two shifts the entire day, we saved $500 every day for the organization.
Which resulted in a monthly savings of $15,000 and a yearly savings of $180,000.
Note: All these calculations are ideal calculations and may vary under different circumstances.
To conclude, I would just like to add that sometimes small changes can have a great impact on the organizations. We, human beings, can definitely come up with these small changes which can transform our lives as well as the life of others.
Note: Feel free to comment on the above article if you have any questions. I would be more than happy to answer that for you.