Most major corporations, especially those in manufacturing, have some type of improvement program they follow to save money, reduce inventory and increase customer satisfaction. These programs fall under the popular terms such as Lean, Six Sigma, Continuous Improvement, or Operational Excellence. These approaches have been around for decades with a strong track record of success.
When these programs are supported by top leadership in the organization, and implemented with a focus on the long term, they can also engage employees, mitigate risks, improve safety and improve sustainability.
Over the past two decades, these approaches have also expanded outside of manufacturing, into government agencies, banking, IT, education, law firms, healthcare and even nonprofits. As these techniques find their way into new industries, there is always an initial push back, such as “we don’t make widgets” or “we don’t want to work in a factory” or “this won’t work in our organization.” The resistance has some merits, but not fully based in reality.
Yes, each industry must look at these techniques in a different way, and some tools and approaches work better than others. Adjustments must be made based on the market, processes, worker skills, laws, and customer needs of that industry. But most of these tools, techniques and mindsets can be applied in some way to that industry with only slight adjustments.
The same is true for the building reuse industry.
Over the past 2 years, I’ve had the opportunity to learn about these nuances through my volunteer work with Lean Portland. We offer pro-bono process improvement consulting to nonprofits in Portland, Oregon. Two of our current clients are in the reuse industry, and they have been educating us on all the uniqueness and challenges they face.
The first major challenge we encountered was dealing with the limitations of the supply chain. In most organizations we’ve worked with, the materials you need are purchased from a supplier. When you do not control the amount, frequency or quality of the materials, you must design processes that are flexible and responsive, which takes time to develop and perfect.
But aside from the supply chain, most of the concepts have been directly applicable to the work being done in reuse operations.
In a car manufacturer like Toyota, the goal is to take raw materials and purchased parts from suppliers to manufacture a vehicle as quickly as possible without an error. In healthcare, patients want to arrive at their appointment, be seen quickly by a qualified professional, get the correct diagnosis and treatment, and get back to their lives with the least amount of cost, pain and disruption.
In the reuse industry, the goal is to remove valuable lumber and materials from a building and get it back into a new building as quickly as possible. When accepting donations, the goal is to get a desired donation from the donor, receive the donation, evaluated, processed, priced, on display in the store (or online), and sold and into the hands of the customer as quickly as possible.
Time is the measure of success. In order to be fast, you must also have high quality, otherwise the process gets caught in a rework loop, and it takes much longer and costs more money to complete.
But many organizations don’t evaluate or measure time from the customer’s perspective. They look at their individual processes (such as checkout, or unloading a truck, or de-nailing wood), and incorrectly think that fast individual process steps will lead to a fast overall process for the customer. This is usually false.
The big delays in most processes occur during the hand offs BETWEEN the processes, not DURING the process.
If we observe and time the process to get one piece of lumber out of a building, process it, and get it into a store, it might take less than an hour of actual labor to complete this task.
But if we measure the calendar time for that same piece of wood, it might be removed in July, processed in August, and into the store in September. An hour of labor that takes three months to become available to a customer is the proper way to look at the opportunities in this process.
At Toyota, it takes about 18 hours of labor to make a car in their factory, but the car is completed within 30 days of when the work begins. This is a much better percentage. Besides the speed advantage, it also reduces their cash flow, as they are able to get paid by their customer shortly after paying their suppliers for the materials.
Through practice, you will also be able to see the opportunities for improvement from the customer’s perspective. This will focus your organization towards concepts such as quick changeover, small batch work, visual management, daily huddles, data analysis, error proofing and checklists.
On March 25th, 2019, Brion Hurley and Matt Horvat go much deeper into this topic with a webinar on Lean principles applied to the reuse industry.