17 January 2013
Grundfos received DI's productivity award 2012 for creating 23 percent better efficiency in two years. Here is inspiration for adapting the lean principles, combining automation and manual work, changing the management focus and involving everyone.
By Lars Rasmussen
In early 2012, Grundfos was honored in Danish Industry with the year's productivity award. A lift in 2010 of 14 per cent and again in 2011 of 9 per cent caused a stir, and it is no less so that the company is aiming for an annual improvement of 8-10 per cent in the future - approximately double what has been possible so far in the pumping company.
Grundfos has had production in Denmark since 1945 and throughout the years has sought to improve efficiency through automation, management development and optimization of work routines. While many others have chosen to move production abroad, Grundfos has chosen to take a different path.
Lean principles are today an important key, but they only became successful when they were tailored to Grundfos. For several years they were used without great results.
"While many others have chosen to move production abroad, Grundfos has chosen to take a different path."
- It annoyed us a little that we did not reach Toyota level in production improvements, so in 2009 we started discussing this impasse, says Niels Møller Jensen, managing director of Grundfos A/S, which is the group's Danish production company.
- We came into contact with LEGO, who gave us the courage to develop our own Lean-inspired system. It turned out that even though we knew the Lean principles, it was about our management routines and the way to tie it all together, which was not immediately part of Lean, he says.
Grundfos came into contact with an English company, Lean Coaching, where some of the employees had more than 10 years' experience from Toyota and had deep insight into why the Japanese factories had been so successful. Their knowledge and ideas, combined with the thoughts that management and employees at Grundfos had had, were brought together to form the Grundfos version of Lean, called Grundfos Shop Floor Excellence.
The name is a conscious signal that the most important work takes place on the factory floor, and that is where department managers today spend 80 percent of their working time. It wasn't like that before. Then it was closer to 50 percent, because they had more tasks at the desk. This has changed in connection with the introduction of Shop Floor Excellence.
- With the new routines, the head of department today has a more coaching role than traditionally, says Niels Møller Jensen.
- At the same time, he or she must check that the agreed processes are being followed and otherwise have it corrected, and as the third main point in the program, each department now holds a daily meeting about tasks and processes, he says.
The daily meeting takes place at a lean board, where the manager and employees discuss in a structured way what is needed to maintain flow and output. In this way, the entire organization is trimmed every day, and everyone is involved.
The daily meeting typically lasts 10-15 minutes. The production manager is in command at the meeting, and everyone takes turns talking about the area they are responsible for. Before the start of the meeting, everyone has been at the whiteboard to mark where production is at the moment, and at the meeting they explain why they are possibly behind and what the plan is to achieve the goals.
At the meeting, the total production targets are broken down into manageable tasks, which can typically be solved during the day without anyone having to wait for more instructions. When the meeting is over, everyone knows who is doing what.
- The important thing is that the agreements are concluded where everyone can hear it, so that we do not experience that three men set about solving the same task, explains Niels Møller Jensen.
- At the same time, we believe that everyone is more inclined to make an optimal effort when they see the overall picture and have an influence on the process, he explains.
The Lean boards are visible and used all the time. At the same time, they are accessible, and you can see from a long distance whether the individual team is ahead or behind and what challenges they have. It gives an overview and focus.
This form of "Visual management" is an indispensable part of efficiency.
At the top of the boards is status information about safety, as the first and most important thing, because Grundfos wants to emphasize that no one must be injured during production. Then information about quality, delivery and output follows in a fixed order, so that employees can switch from one department to another and quickly familiarize themselves with how things look right now.
The new boards complement the visual illustrations of production flow that Grundfos has used for many years.
- One of the manager's most important tasks, says Niels Møller Jensen, is to continuously check that production takes place according to the standards we have determined. If this does not happen, the manager and employee talk about it. Of course, we can easily change a flow, but then it must be described how it can be made better, and until then you must stick to the established standard description.
The standardized process descriptions must prevent waste and all redundant movements and transport. The new thing at Grundfos is that no one starts to change procedures before they have been described and tested.
There is more control than before Shop Floor Excellence was introduced, but many employees have expressed that it is nice that the managers have a direct interest in discussing the individual's work. The coaching part is important in that way, because it gives the opportunity to discuss whether it is the right way to do the work.
Grundfos Shop Floor Excellence is based on the values and culture of the pump company and is more than just a new name for Lean.
- Some of the workplaces at Grundfos are designed for people who cannot fit in a normal job, and we will under no circumstances give up those places in the holy name of efficiency, states Niels Møller Jensen.
- We would like to follow the lean path, but we have to do it our way, even if it has given the consultants quite a few headaches in the development phase, he explains.
Grundfos has many unskilled employees who can generally feel under pressure because many companies have moved production abroad. Against that background alone, the streamlining at Grundfos is seen by many employees as a healthy effort to keep jobs in Denmark.
"Shop Floor Excellence produced results that were previously seen as unattainable, so it quite naturally spread excitement and extra motivation."
The reaction to the introduction was overwhelmingly positive. Some felt it was quite a mouthful, but when good results quickly came, many were convinced that the project was worth pursuing.
Shop Floor Excellence produced results that were previously seen as unattainable, so it quite naturally spread excitement and extra motivation.
- I have not met anyone, at least not at Grundfos, who does not want to create results and achieve high goals, so it gives team spirit when they succeed, says Niels Møller Jensen.
- One of the secrets is that we put the employees in play. When given just a few tools and a little guidance, they are fully capable of finding optimization opportunities and delivering high productivity, he explains.
Efficiency in Denmark has for many years been equal to automation, but the example at Grundfos shows that it is not the only way.
- It's a misunderstanding, and we've suffered from it ourselves. Of course, automation is needed where possible, but a more nuanced view of it is needed.
Automation tends to become quite rigid, but by combining automation with new work routines for the employees, we can get a more flexible system, says Niels Møller Jensen.
- You can over-automate. Our approach to building new lines is somewhat different today than 3-4 years ago, because even if the machines are "intelligent", they are not at the level of humans, so we are looking for flexible solutions with a high degree of automation in some places, and employees for e.g. small series and frequent changes elsewhere.
Without major investments, but by rebuilding departments, removing some machines, putting in other equipment and some employees, Grundfos has gained a completely different flexibility and, overall, a high productivity improvement.
From the outside, lots of networks, individuals and journalists have shown an interest in Grundfos' way of practicing Lean, and the company welcomes everyone.
- There is nothing secret about this, and we are no less happy that others may also be successful in finding a good way to optimise, says Niels Møller Jensen.
Both managers and employees have needed new skills to handle Grundfos Shop Floor Excellence, but the visible distribution of responsibility as well as focus and overview have been the most important tools for the significant efficiency improvements.
With the caveat that Lean, production optimization and outsourcing are very complex matters, the advice from Niels Møller Jensen can be summarized as:
Last updated 21 September 2022
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