1

Author: Mezentseva, Olga, I

Title: Implementation of the 5S Concept in Company XYZ
The accompanying research report is submitted to the University of Wisconsin-Stout, Graduate School in partial
completion of the requirements for the
Graduate Degree/ Major: MS Operations and Supply Management

Research Adviser: Jim Keyes, Ph. D.

Submission Term/Year: Spring, 2013

Number of Pages: 65

Style Manual Used: American Psychological Association, 6th edition

I understand that this research report must be officially approved by the Graduate School and
that an electronic copy of the approved version will be made available through the University
Library website
I attest that the research report is my original work (that any copyrightable materials have been
used with the permission of the original authors), and as such, it is automatically protected by the
laws, rules, and regulations of the U. S. Copyright Office.
My research adviser has approved the content and quality of this paper.

STUDENT: Olga I. Mezentseva

STUDENTS SIGNATURE: _____________________ DATE: May 1, 2013

ADVISER: Jim Keyes

ADVISERS SIGNATURE:______________________ DATE: May 1, 2013

--------------------------------------------------------------------------------------------------------------- ------------------
This section to be completed by the Graduate School
This final research report has been approved by the Graduate School.

Director, Office of Graduate Studies: DATE:

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Mezentseva, Olga I. Implementation of the 5S concept in Company XYZ

Abstract

The objective of the project was to use lean tools to manage and improve the

working conditions and efficiency of the Creform area in Company XYZ. The area was

used to build different racks and carts from the several pipes and the fastener systems for

the production side. To accomplish the goal the researcher focused on the 5S

implementation as one of the lean tools. In order to develop a better organization of the

work-space and its utilization, the research focused on the waste reduction within the

Creform area, improvement of the original layout, and rearrangement of the tools and

materials. Implementation of the 5S concept improved the existing situation of the area

which resulted in increased profitability. The project also incorporated the usage of an

A3 report as an additional lean tool. It was developed to observe the existing situation,

execute the implementation plan, and evaluate results.

With the use of the 5S tools, the Creform area became more organized, cleaner,

and more visible which increased efficiency in the area. The improved working

environment led to higher productivity during the manufacturing process.

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Acknowledgments

I would sincerely thank my family and my boyfriend, Ashish Mehta for their every day

support and constant motivation. They gave me a chance to get a Master`s Degree abroad.

I would like to thank Dr. Jim Keyes, my program director and advisor for the given

opportunity to study at the University of Wisconsin Stout and for his support and guidance

during my academic career and my project.

I would like to thank my host family, Cindy and Dale Quilling who introduced me to American

culture and always supported me in my life in the USA.

Finally, I would like to thank all my friends for their support.

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Table of Contents

.................................................................................................................................................... Page

Abstract ............................................................................................................................................2

List of Tables ...................................................................................................................................6

List of Figures ..................................................................................................................................7

Chapter I: Introduction ....................................................................................................................8

Statement of the Problem ...................................................................................................10

Purpose of the Study ..........................................................................................................10

Assumptions of the Study ..................................................................................................11

Definition of Terms............................................................................................................11

Limitation of the Study ......................................................................................................13

Chapter II: Literature Review ........................................................................................................16

Lean Manufacturing ...........................................................................................................16

The Toyota Production System ..........................................................................................18

Lean Principles and Tools to Increase Productivity and Eliminate Waste ........................23

Identifying the different types of waste .............................................................................23

5S Beginning of Lean Implementation ...........................................................................26

Benefits of 5S Implementation ..........................................................................................30

Chapter III: Methodology ..............................................................................................................33

Project Definition ...............................................................................................................33

Data Collection ..................................................................................................................35

5S Implementation .............................................................................................................38

Data Analysis .....................................................................................................................40

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Chapter IV: Results ........................................................................................................................42

A3 Report ..........................................................................................................................42

Data Collection Results.....................................................................................................45

Results of the 5S Implementation .....................................................................................47

Results from a New Layout Development ........................................................................53

Chapter V: Discussion ...................................................................................................................56

Limitations ........................................................................................................................57

Conclusions ........................................................................................................................57

Recommendations ..............................................................................................................58

References ......................................................................................................................................62

Appendix A: 5S Audit ...................................................................................................................65

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List of Tables

Table 1: Data Recording Sheet Template ......................................................................................37

Table 2 The Inventory Tracking Sheet Template ..........................................................................38

Table 3: The Inventory Tracking Sheet .........................................................................................45

Table 4: Data Recording Sheet ......................................................................................................54

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List of Figures

Figure 1: The Toyota Production System House Diagram ............................................................19

Figure 2: An Example of a Kanban card .......................................................................................21

Figure 3: A Kanban system............................................................................................................21

Figure 4: A3 Report .......................................................................................................................34

Figure 5: Original Layout of the Creform area ..............................................................................35

Figure 6: Example of a Spaghetti Diagram....................................................................................36

Figure 7: A3 Report Analysis ........................................................................................................44

Figure 8: Spaghetti Diagram of distance traveled by employees within an original layout ..........47

Figure 9: Red tagged items ............................................................................................................48

Figure 10: Supplies rearranged by a part number or type ..............................................................49

Figure 11: Taped off location for the equipment ...........................................................................49

Figure 12: Labeled bins and their locations ...................................................................................50

Figure 13: Labeled surface of tool box and top shelf of casters racking .......................................51

Figure 14: Creaform Board ............................................................................................................52

Figure 15: Previous Creaform book location .................................................................................52

Figure 16: Identified Creform book location .................................................................................52

Figure 17: Spaghetti Diagram of distance traveled by employees in new layout ..........................53
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Chapter I: Introduction

In light of the current economic situation and the high competition within the

manufacturing industry, companies spend more time focusing on increasing their profitability

and spend less time thinking about their employees and work conditions. However, management

has realized that employees are key assets, who work towards achieving the company`s

objectives. It has been revealed that one of the most vital issues to maximize a company`s

profits was to improve the working environment for its employees and make their work space

more comfortable. This will increase productivity within the manufacturing process. Lean

transformation is an approach that helps companies achieve these improvements.

Lean manufacturing is a continuous improvement process with the goal of delivering

products in the quickest, most efficient and cost effective manner (Sanders, 2010, p. 1). Lean

manufacturing is an approach that uses tools to manage the business quicker, cheaper, and more

efficiently. To keep a lean production, companies need to apply effective lean rules and

techniques to reduce any type of waste in processes and make manufacturing practice more

resourceful. Waste can be anything that does not add value to a finished product. Therefore, an

improvement made in the process, impacts increased productivity, reduced lead time and cost

structure. In lean manufacturing, each step is aimed at improving a company`s processes, such

as visual management, reduction in material handling, and better housekeeping. This can be

implemented with the help of 5S as one of the lean techniques.

The 5S system is a methodology applied for organizing, cleaning, standardizing and

improving the work area (Alvord, 2010). The list of 5S activities includes five Japanese words:

seri, seiton, seiso, seiketsu, and shitsukee; translated in English as sort, set in order, systematic

cleaning, standardize, and sustain. The 5S is a system that is a central point of efficiency,
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discipline and attention to details (Carreira, 2005). The 5S techniques focus highly on improving

efficiency, increasing productivity, and eliminating waste.

Company XYZ is one of the largest window and door manufacturers in North America.

The company has been implementing lean manufacturing tools within production for the past 20

years, mainly focusing on the Kaizen method. However, Company XYZ needed to integrate

changes in its processes in order to provide better working conditions for its employees, and

therefore increase productivity. The management had to figure out how to improve the

company`s business environment, and how to eliminate waste of time, supplies, excessive

employee motion, overproduction, and waiting time. Implementation of this process would

result in increased profitability. The company considered these factors to be crucial to improve

efficiencies and reduce wasteful activity of its manufacturing process in order to become a more

proficient manufacturer once the working environment changed.

Company XYZ has experienced difficulties in the physical organization of the workplace

within the Creform area. This area was used by the company to build different racks, carts, and

boards from special pipes and the fastener systems. The area also was used to fix the items if

they were broken or non-functional, and to develop any other projects as needed. Within the

defined area, there were many tools and consumables that lacked order and structure, which

resulted in chaos. During the production cycle the tools and supplies were hard to find as they

did not have a fixed location and were being replaced or even lost. The employees were working

in an uncomfortable, messy environment, which was full of many unnecessary items and

excessive inventory. These items were not used and just stayed on the shelves covered with dust.

This negatively impacted the process flow and visibility. These problems were non-value-added

activities that consumed time, people, space and increased cost. These activities were inefficient
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actions that led to wastes such as extra motion to avoid obstacles, time spent searching for

misplaced things, delays due to defects or accidents, and ultimately did not add the value to the

product. As a result, it was difficult to work efficiently within the Creform area. Company XYZ

needed to re-evaluate its business model to more deeply incorporate the lean manufacturing

method. Consequently, management of the company decided to apply the 5S concept, one of the

lean manufacturing tools, to help solve the problems and achieve improvements.

Statement of the Problem

The Creform area of Company XYZ was able to be used by all employees to build or fix

different items for the manufacturing processes. Company XYZ experienced lost productivity

within the Creform area because of lack of order and control, resulting in increased costs.

Purpose of the Study

The purpose of the study was to use lean tools to identify the disadvantages of the

Creform area layout, and to manage and improve the efficiency of this area. The main goal of

the project was to implement 5S methodology in the Creform area and focus on continuous

improvements of the unorganized area. Furthermore, another goal was to obtain a level 3

Organization Understanding of 5S method. This meant that everyone in the area should

understand all documents, tools, and materials within the Creform area. Anyone could determine

what is being worked on and what will be used next. Employees need to sustain and maintain

the performance of the Creform area. This study was projected to create a more efficient layout

of the area as well as sort, organize, and label all tools, materials and equipments used within the

Creform process. The development of standardized work methods to ensure cleanliness of the

area in order to streamline the flow of work was also planned. One of the company`s objectives

was to eliminate the following kinds of waste as the first step of lean implementation: motion
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waste, searching waste, and waste of excess inventory. Within these objectives, the company

focused on creating better working conditions leading to higher efficiency in the workplace.

Assumptions of the Study

Company XYZ utilized lean principles and had already applied different lean methods for

the past 20 years. However, the company had not standardized and sustained achieved efficiency

within the Creform area. The company supported the 5S implementation project and assumed

that the project would be effective and the manufacturer would be able to maintain implemented

improvements over time.

Definition of Terms

A3 report. A report is called A3 because of the international-sized piece of paper 11x

17 (A3 piece of paper size is in accordance with the European standards). Toyota started using

the A3 report to present important information on one sheet more effectively during a meeting.

It is a full report documenting the process. A problem-solving A3 would state the problem,

document the current situation, determine the root cause, suggest alternative solutions, suggest

the recommended solution, and have a cost-benefit analysis (Liker, 2004, p. 157).

5S. A Japanese concept that includes five principles: sort, set in order, shine, standardize

and sustain. 5S is the foundation for continuous improvement, zero defects, cost reduction, and

a safe work area and a systematic way to improve the workplace, processes, and products

through production line employee involvement (George, Rowlands, Price & Maxey, 2005, p.

206).

Creform area. Inside the area employees use pipes, a joint system, and casters to build

different racks, carts, and rail required for all the production lines. Creform area is also utilized

by any employee to fix one of these items and to work on several other projects when it is
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needed. Within the Creform area certain storage cabinets with particular tools and equipments,

totes with joint elements and casters, and wood racks can be found and used to custom define

and construct units to their own unique application needs.

Just-In-Time (JIT). A system for producing and delivering the right items at the right

time in the right amounts. Just-in-Time approaches just-on-time when upstream activities occur

minutes or seconds before downstream activities, so single piece flow is possible (Womack &

Jones, 2003, p. 349).

Kaizen. Continuous improvements of everything with elimination of wasteful activities

(Womack & Jones, 2003).

Lean manufacturing. Continuous improvement process with the goal of delivering

products in the quickest, most efficient and cost effective manner (Sanders, 2010, p. 1). Lean

manufacturing is a tool that many companies focus on for continuous improvement of processes

to eliminate waste and boost performance (Green, Lee, & Kozman, 2010, p. 2976).

Level 3 of 5S Organization Understanding. At this level the whole company clearly

understands the 5S process. This means the company already went through the prior two levels

of initial efforts and general awareness of needs. The company already did some initial work

towards continuous improvements and is fully responsive to changes in order to organize the

workplace more efficiently.

Non-value-added work. Regarded as waste in the conventional sense. For example,

walking to pick up parts, opening the package of goods ordered from outside, operating the push

buttons, and so forth are things that have to be done under present conditions (Ohno, 1988, p.

57).
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Red tagging. This strategy is used to identify unneeded items, excess inventory, broken

tools, and helpful within the sorting process. Employees apply this strategy to manage the flow

of items within the production area or by individual departments (Alvord, 2010, p. 4).

Spaghetti Diagram. A visual depiction of a workflow, using visual representations of

process equipment and arrows to show the different human interaction and flow. An area map is

a sequence of operations or processes as defined by the work of a person, a machine,

organization or staff (Alvord, 2010, p. 98).

Waste (Muda). Any activity that does not add value to the good or service in the eyes

of the consumer (APICS Dictionary, n. d.).

Work flow. It means that value is added to the product in each process while the

product flows along (Ohno, 1988, p. 130).

Limitations of the Study

This research was conducted only within the Creform department of Company XYZ and

did not take the entire organization into consideration. The manufacturing layout was limited to

a defined area; therefore new changes and recommendations were limited to this space.

Methodology

During the project, the researcher focused on the 5S implementation as one of the lean

tools to accomplish the research objective. This tool was applied to eliminate waste through a

more efficient organization of the work area and better layout. The major point of the project

was to identify the problems in the current Creform area, and with the application of lean tools

the workplace was improved.

Within this project, the seven wastes concept was applied to clearly distinguish what

wasteful activities existed and needed to be eliminated in the area. The following types of
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wastes were examined within the research: motion waste, searching waste, and waste of excess

inventory. The Spaghetti Diagram tool was applied to measure the distance between certain

equipment used within the manufacturing process. During this step it was important to reveal

how the area layout might be improved to make the process more effective.

The 5S implementation was expected to improve the current situation within the Creform

area and propose ideas to sustain the improvements over time. The 5S process started from the

sort stage. During the sorting step, all unnecessary items were recognized and red tagged for

future removal or recycling. After the red tagging process the set in order step was put into

action. This required finding the proper location for each item used in the Creform area. Within

the shine stage, each piece of inventory, machine, and storage totes with materials needed to be

deep cleaned. Standardization was done by the Lead employees of the Creform area in order to

monitor and manage the usage of the tools and equipment. Labeling the shelves and totes with

materials and taping off the floor for the equipment location, were part of the fourth stage as

well. Sustainability within the last stage was achieved only if each employee of the Creform

area knew the main rules applied in the area and maintains the continuous improvements.

Another lean tool applied was an A3 report. The A3 process combines two important

concepts, strategic management and problem-solving. This report has a clear structure of the

outcomes that are supposed to be achieved and the plan of how it might be completed. This lean

tool is an instrument used to manage projects efficiency. It is easily understood by each

employee who is involved in the solution. This was used to illustrate the original area layout to

identify the problem zones and develop an implementation plan with measurements. The A3

was developed to document the current situation, and propose a working plan to achieve the

stated objectives. The current situation was recorded with pictures to fully understand the
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problem and the solution. These lean tools were applied in the research to help eliminate waste,

develop a more efficient layout, and improve organization of the work-space.

Summary

Company XYZ, a window manufacturer, has experienced difficulties in the physical

organization of the workplace within the Creform area. Tools and materials had no designated

place which led to disorganized work areas and inefficient productivity. The working

environment was messy, distracting, and uncomfortable. Company XYZ would have to deal

with many issues including: excess inventory, increased inventory carrying costs, unnecessary

supplies, lost items, and inefficiency. This research was developed to improve the workplace,

create a better work environment, and increase efficiency within the assigned area, as well as

generate a more beneficial layout for the area to fully utilize the work space available. The

literature review in Chapter II discusses lean manufacturing tools used to achieve process

improvement by eliminating wastes and sustaining continuous improvements.

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Chapter II: Literature Review

Company XYZ is a leader within the window manufacturing industry. It has faced the

situation of decreased productivity and increased costs in the manufacturing side of the Creform

area where carts and racks are built. This happened because of a lack of order and control within

the area. This study focused on the 5S implementation in order to increase the productivity and

improve the physical organization of the work place. The window manufacturer aimed at

eliminating wasteful activities within this specific area to create better working conditions in

order to achieve a higher level of efficiency. This chapter reviewed the literature about lean

manufacturing and 5S practices.

Lean Manufacturing

In the current economic situation, many organizations focus on creating value for

customers by improving their performance and increasing the customer service level, therefore

keeping a competitive position in an increasingly global market. Lean manufacturing tools help

an organization keep or improve its competitive position. Lean production is the philosophy of

eliminating all waste in all system processes continuously. The system is the complete set of

processes required to produce the product (Carroll, 2002, p. 8).

Liker (2004) underlines the five-steps of lean manufacturing:

Defining customer value

Defining the value stream

Creating flow

Responding to the customer pull

Striving for excellence (p. 7)

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Lean production has been implemented by many enterprises that clearly recognize the

importance of quality management. Furthermore, the management understands the need for

developing a deliberate and systematic process as a big step towards achieving significant

improvements of the enterprise performance. However, the spread of the lean concept is limited

by an incomplete awareness of the importance of the lean system. In order to start a lean

manufacturing process, companies need to identify the manufacturing areas that need to be

improved and develop a plan of the entire implementation process (Hobbs, 2011). Organizations

that are lean manufacturers eliminate waste in areas such as supplies, inventory, cycle time,

operator time, and waiting time.

Oliver, Schab, and Holweg. (2007) state:

Lean systems minimize waste (where waste is anything that adds cost, but not value to a

product): materials flow continuously through the system on a just-in-time basis; and

there is an emphasis on error prevention, rather than detection and post-hoc rectification

(p. 3726).

Green, Lee, and Kozman (2010) indicate the major objectives of lean manufacturing

include:

minimization of underutilized labor

reduced terms during the creation of new products

guarantee of supplying products to the customer

maximization of quality at minimum cost

Application of lean tools is a crucial step to achieve a significant increase in productivity,

improve product quality and become a more competitive organization without additional capital

investment. Thus, for more successful lean concept implementation, companies have to be more
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innovative and set goals towards continuous improvements and try to sustain them. Only in this

case the use of the lean manufacturing principles gives significant results.

The lean concept, implemented by the Toyota Motor Corporation, is the outcome of

effectively using the lean tools. Japanese lean pioneer Taiichi Ohno, founder of the Toyota

Production System, began his first experiments to optimize production in the 1950's. At that

time, the Toyota Group faced the problem that demand was not high enough to build a strong

production line like Ford had. The Japanese had effectively learned the way to create a variety

of different models in conditions of low demand. This problem was solved by focusing on

customer satisfaction and quality rather than mass production (Liker, 2004). As noted by Liker

and Morgan (2006) since the 1980s, many manufacturing companies take the Toyota production

model as an example for applying lean techniques on the production side. This model is well-

known as the Toyota Production System (TPS).

The Toyota Production System

The Toyota Production System, the base of lean manufacturing, was developed and used

by Toyota Motor Corporation for many years. Liker and Morgan (2006) state Toyota`s

Production System (TPS) is based on lean principles including a focus on the customer,

continual improvement and quality through waste reduction, and tightly integrated upstream and

downstream processes as part of a lean value chain (p. 5). It is crucial for enterprises to

concentrate on understanding the main principles of TPS to improve productivity and sustain

continuous improvements within the production system. The use of the lean principles, in

general, can produce a significant effect. One of the main advantages is that it needs 80% of

management effort and only 20% of technology investment (Womack & Jones, 2003). Creation
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of a true lean culture in the company is an important factor that makes people, process and

technology engage and work as a whole system.

The Toyota Production System can be represented as a house (Figure 1). This house is

built in a way that if the lower layer is not stable the whole system would not be able to exist.

There are two pillars of this house: Just-In-Time and Jidoka (Liker, 2004).

Figure 1. The Toyota Production System House Diagram. Adapted from Toyota and preventive
maintenance by McBride, D., May, 2004. Retrieved from
http://www.emsstrategies.com/dm050104article2.html

The first step needed to support lean manufacturing process is the implementation of Just-

In-Time (JIT). JIT is a set of principles, tools, and techniques that allows a company to produce

and deliver products in small quantities, with short lead times, to meet specific customer needs

(Liker, 2004, p. 23). This process is about making material flow as quick as possible with

delivery of the right parts to the right place at the right time.
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Ohno (1988) underlines the main advantages of a JIT system within the manufacturing

industry:

the low level of material resources and finished goods

reduced production space

improved product quality, less number of scrap and rework

reduced production time

more flexibility in changing the product mix

smooth flow of production with less number of mistakes, less set-up time

high performance and efficiency of the equipment

employees` involvement in business problems

good relations with suppliers

less non-value activities (storage, material handling).

Jidoka prevents the chance of defects passing into the next production stage. It includes

the following elements of quality management system: process control, visible results of quality

assessment, product control within the entire production cycle, and continuous improvement of

quality (Liker & Morgan, 2006). Quality control is a crucial part of each work station. To

ensure there is a clear understanding of production quality measurement, special notifications are

used. In this case, employees know what part of the product has a quality issue, its current

results and how it has to be improved. Quality is an important part of the lean process.

The Kanban information system was developed by a group of Japanese managers in the

Toyota Motor Corporation. Kanban is the Japanese word that consists of two parts: "Kan"

means visible, visual, and "ban" means card or board (Figure 2). This system operates on the

basis of "just in time" and is used for operations management (Ohno, 1988).
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Figure 2. An example of a Kanban card. Adapted From Withdrawal Kanban strategies by

Gooding, M., September, 2011. Retrieved March 20, 2013, Retrieved from
http://dynamicscare.com/blog/index.php/withdrawal-kanban-strategies-in-ax2012.

The main idea of the Kanban system (Figure 3) is that all production lines, including the

final assembly line, are provided with the right amount of raw materials. They are needed for a

smooth production of a certain amount of products. Then they are delivered in accordance with

the production schedule. A supply order for specific products is made with the use of a signal

label. Each stage of the production cycle is dependent on each other. It leads to a reduction in

the internal inventory level. This system is supported by a Total Quality Control (TQC) system

that prevents the chance of defects (Weinstock-Herman, 2009).

Figure 3. A Kanban system. Adapted from Applying Kanban to IT process (Part 1, para. 2) by
Weinstock Herman, December, 2009. [Web log comment]. Retrieved from
http://tiernok.com/myArticles.php?article=applying-kanban-to-it-processes-part-1.
Copyright 2010 by Weinstock Herman, E.

Kaizen is a Japanese word that consists of two parts: Kai (change) and Zen

(goodness). Masaaki Imai, the author of this concept, believes that Kaizen is the continuous
 22

improvement of everything that people do, embodied in business methods and techniques (Liker,

2004). As referred by Liker and Morgan (2006) Kaizen is a process based on a gradual,

imperceptible improvement. The Kaizen concept focuses on the human factor, as people should

always look for opportunities to improve their performance. Thus, according to Liker and

Morgan (2006) companies are interested in the Kaizen concept because it focuses on process, not

results and it uses statistics in the analysis and decision-making.

Kaizen advantages are clearly visible by its application in Toyota Motor Corporation.

Toyota, as a lean manufacturer, recognized several benefits of Kaizen (Liker, 2004). They are:

waste reduction, defects elimination, effective source use, teamwork, and improved quality. The

first and foremost advantage of kaizen process is that it significantly reduces the loss in each

manufacturing process. Kaizen involves everyone within the organization. Thus, this system

provides improvements at all levels of the company helping to minimize the loss of resources. It

also reduces the run time of production cycles and makes the production more efficient.

Due to the rapid changes within the organization, releasing extra resources can be used

for other production purposes and improvements. It is important to highlight that a team is a

great resource for the manufacturer. When problems are solved successfully within the work

team, it strengthens the team spirit of the company. Colleagues, co-workers, supervisors, and

subordinates learn to trust each other. All of these factors improve the working environment, as

well as ensure the smooth flow of quality work. When the production team works more

efficiently without any problems, it improves the quality of the product. In this way it improves

production and impacts the company`s success within the industry. The main principles of

Kaizen system are: quality improvement, involvement of all employees, willingness to change,
 23

and communication (Wang, 2011). This does not require any big solutions. However, the

principles are worth implementing in any manufacturing company.

Lean Principles and Tools to Increase Productivity and Eliminate Waste

The main point of the lean manufacturing concept is to understand what value the

company creates for the consumer. According to the customer, the finished product becomes

valuable only at the moment when it goes through manufacturing process and acquires parts that

are needed for consumers. Ohno (1988) states that the main element of lean manufacturing is the

process of eliminating waste or muda. Muda is a Japanese word that means losses or waste.

Staats and Upton (2011) emphasize, Waste may be obvious once it has been pointed out but

finding it in the first place is not always easy, because it has generally been part of the landscape

for a long time (p. 103). It is any activity that consumes resources but does not create value.

For example, consumers do not need the finished products and other parts to be in stock within

the manufacturer.

Identifying the different types of waste

In accordance with the lean manufacturing concept, all activities of the company can be

classified as processes that add value to the customer and operations that do not add value to the

customer. Samolejova, Lenort, Lampa and Sikorova (2011) believe the major principle of lean is

to identify and eliminate waste and increase efficiency of production. These wastes increase the

cost of production without adding value, which is needed for the customer. They also increase

the payback period and lead to a decrease in the employees` motivation. For companies that

want to streamline their processes in the industry, these eight hidden wastes are their worst

enemies.
 24

Taiich Ohno, a former Toyota manager and Toyota Production System pioneer, has

identified the different types of wastes within manufacturing process (Womack & Jones, 2003).

They are: overproduction, waiting time, transportation waste, over processing waste, excess

inventory, excess of motion, reject and rework, and underutilized work force. These wasteful

activities do not add or reduce any value to the customer.

Overproduction is the type of waste that occurs when companies produce and stock more

than is necessary. Companies produce more surplus items instead of following the demand.

There are activities that lead to longer production cycles such as bad planning, large stocks, long

setup times, and not enough direct contact with customers which prevent clear understanding of

any change in requirements (Carreira, 2005). Therefore, companies think their clients may need

more, and as a result suffer from the high cost of production of goods and services that cannot be

sold. As a result, it increases handling cost, storage space, other costs and time.

Waiting time is time wasted when things are not ready when they are required. This

occurs when people, operations, or partially finished products have to wait for further action,

information or materials (Alvord, 2010). Poor planning, communication problems and

inadequate inventory management lead to delays, which cost companies` time and money.

Eliminating waiting time within the production process is crucial as it decreases lead-time,

increases employee and equipment utilization, and creates excess inventory.

Transportation waste occurs when personnel, equipment, products or information move

more often or for longer distances than is really needed (Alvord, 2010). Rather than place the

processes next to each other, they are often located far from each other, which requires the use of

forklifts, conveyors, or other transportation equipment to move materials to the next operation.

All of these moves do not add customer value to the products.

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Over processing waste, according to Carreira (2005) happens in the production of high-

valued consumer goods or services. Adding extra function to the product holds no value in the

eyes of the consumer and does not improve the product or process. The lack of information

about how consumers use the products or services often makes it unnecessary to add

functionality, which, according to the manufacturer, customers need.

Excess inventory waste takes place when surplus stock losses are fraught with many

unpleasant quality problems such as modifications, defects, increased process time, problems

with suppliers, and problems in planning the workforce and production (Alvord, 2010). Excess

inventory ties up cash and reduces the return on investment in labor and raw materials.

Excess of motion exists within unnecessary movement of personnel, products, materials

and equipment that do not add value to the process (Ohno, 1988). Employees often make

unnecessary movements from the site to the warehouse and back to the shop. They also walk

around unneeded equipment. These movements can be eliminated which will speed up the

process. This is one of the most crucial wastes for companies because it wastes time making the

production processes inefficient and employees` work harder. This is one of the largest sources

of loss, despite the fact that most of the production process was designed to minimize

unnecessary movements. It occurs unnoticed and leads to malfunction.

Rejects and rework are losses due to product defects or necessary rework. This occurs

when there is no reliable preventive system and built-in error protection (Carreira, 2005).

Companies take rework as an integral part of the process as every time a mistake is made within

the production cycle the product is transferred to the next process stage. As a matter of fact, in

this situation the company is losing money because something needs to be re-manufactured, re-
 26

assembled, or repaired. These activities increase the final cost of the product and do not add any

customer value.

The eighth waste was created later by the Toyota Motor Corporation and it was defined

as an underutilization of employees or unsuccessful use of human talent (Liker, 2004). The

implementation of lean manufacturing is the move of a company to a new, more qualitative

level, suggesting all employees should be involved in the entire company business process. In

this case, active participation is ensured through financial and intangible incentives such as the

opportunity to participate in the management of the enterprise, and the implementation of ideas

and career. This should be a separate element of incentive and staff motivation by the company.

By minimizing waste in general, companies can achieve higher efficiency and better quality

within the production process (Dennis, 2002).

5S Beginning of Lean Implementation

5S system is a method of organizing the workplace to increase the efficiency and

manageability of the operating area, to improve the corporate culture, and to save time

(Dossenbach, 2006). The 5S system is generally used as the first stage of lean implementation.

It helps to get rid of excess tools and materials in the production area and eliminate its

occurrence in the future (Markovitz, 2012). This lean manufacturing method encourages

workers to improve their working conditions and helps them learn to reduce waste, unplanned

downtime and in-process inventory. 5S implementation organizes the workplace without

significant changes in its existing design (Hough, 2008, p. 44). The result of the process is the

space reduction needed for existing operations, storage and motion.

The philosophy of 5S consists of five steps: sort, set in order, shine, standardize, and

sustain (Hirano, 1995).

 27

Sort (Seiri) means that the operating area needs to be checked and all unnecessary items

should be removed (Hough, 2008). Employees often do not want to get rid of items that are no

longer needed for work, keeping them for just in case. This usually results in confusion or

creates obstacles to move within the working area. Removing unnecessary items and restoring

order in the workplace improves the working conditions and safety.

Within the sorting stage to clearly illustrate how many unnecessary items are in the

workplace, a red tagging concept is applied to eliminate excess inventory. During this process,

each item is labeled with red tag or flagged for removal from the work area. As mentioned by

Hirano (1993) all employees are involved in sorting and identification of objects that should be

immediately discarded, disposed of, moved to a more suitable place for storage, or moved to

specially created place.

When sorting, it is important to go through all items carefully and throw items that are

not needed anymore in the area. In this case, in order to get rid of these things, owners` or

special order management`s approval is necessary. During this step, found items are usually

dusty and located behind, under or on equipment, as well as on the shelves and in the cupboards.

These may be unneeded supplies, outdated documents, damaged or not used instruments,

computers, accessories, old drawings, and drawers with junk items (Hirano, 1995). The sorting

stage is a crucial step to help make a clear distinction between what is needed and what is

unnecessary. Within this stage the company gets ability to free up space, remove obstacles,

improve safety within the specific area, and feed into the next stage.

Set in Order (Seiton) means to define and identify an appropriate place for each item that

is needed in the work area. Without a structure and control, in the case where production is

organized in shifts, employees of different shifts place tools, documentation, and material in
 28

different places. This leads to chaos which impacts productivity level. In order to streamline

processes and reduce production cycle it is extremely important to keep items in the same order

(Markovitz, 2012). This is a key factor to minimize time spent on unproductive search. This is

an essential step to run in order to make it obvious when something is out of place or missing,

make things easier to find, and ensure tools are available when required. It is beneficial for

companies to go through the set in order stage as it helps to eliminate frustration of searching for

different items, creates a better working environment, reduces number of accidents, and prepares

employees for the implementation of the next shine stage.

Shine (Seiso) is checking on equipment and workplace cleanliness, providing sufficient

follow-up, and maintaining it. The best way to detect leaking hoses, loose connections, damaged

surface and defective equipment is to keep them clean. Cleaning at the beginning or the end of

each shift provides immediate identification of potential problems that can interrupt the operation

process. The erased marks on the places of storage of equipment and materials should be

regularly updated. Marking of danger areas, quality signs and other manufacturing indicators

should be clear and legible (Mehok, 2011). It is crucial to make a special check-list describing

all the areas that need to be monitored and cleaned. This helps to get everyone involved in the

process to better understand the new requirements and sustain them. It is a way to make

problems easier to find by keeping areas clean, creating a healthier, safer work environment, and

increases customer confidence with an orderly workplace. The inspection portion of the shine

stage reduces contaminants and prevents downtime by identifying abnormalities before they

cause injuries, productive losses, and quality issues.

Standardize (Seiketsu) means to develop a checklist that is clear and easy to use for

everyone. The required standards of cleanliness for equipment and work places should be
 29

considered. It is important to let everyone within the organization know how essential the

process is for the overall success. Standardization requires management participation in order to

start a 5S implementation. Everyone must understand the necessity and validity of the new

requirements and standards (Hirano, 1995). For this purpose it is useful to provide trainings.

Implementation of the 5S method should be a part of the professional certification of employees

and become a common cultural norm within the entire organization. According to Dossenbach

(2006), this stage is an essential part of the 5S process as it helps make first 3S`s a habit and a

regular task for employees. Thus, they try to sustain cleanliness with the help of daily

housekeeping, keeping tools and materials in order, and develop an efficient replenishment plan

to have everything that is needed in the right place at the right time. The standardization process

is resourceful because it provides documented standards of 5S activities, presents a basis for

problem solving and improvement activities, and guides consistency of 5S activities across all

shifts and throughout the company.

Sustain (Shitsuke) is the most challenging step within a 5S implementation. To improve

and maintain the 5S system, managers and employees should communicate more often with each

other, not forgetting to reward those who sustain the improvements. Everyone should

understand what benefits the company receives from the 5S implementation. The most crucial

factor for employees is that it improves safety conditions (Kobayashi, Fisher & Gapp, 2008).

The management team is responsible for sustaining constant order within the work area, in

addition to supporting and monitoring the implementation of new projects. They also have to

determine in what work areas 5S tools need to be implemented to sustain continuous

improvements. Within this step, it is imperative to perform a 5S audit in order to maintain gains

or re-establish standards and improve them. Mehok (2011) states The key to success is to take
 30

small steps in several of the other processes, and add to them once they have become part of the

daily routine for the company (p. 61). A clean, well-organized work environment will increase

quality of work and productivity, and as a result increase the overall company performance.

Benefits of 5S Implementation

The implementation of the 5S process contains specific improvement activities

implemented in different business environments. 5S implementation has three core advantages

including cleanliness, orderliness, and discipline (Kobayashi, Fisher & Gapp, 2008). Cleanliness

helps to organize and allocate tools and materials in a way where employees can easily find

them, such as a shadow board or taped off shelves and floor areas. It also helps to improve

housekeeping of the assigned area, reduce the number of crime, and decrease the number of

work related injuries. Orderliness increases efficiency in the area and improves productivity of

the employees due to better organized work space and well-placed supplies. Discipline is the

most crucial process as it increases the level of morality and improves organizational culture

because of provided training and educational programs. This increases the quality of work and

employees` involvement and motivation.

The 5S process has a dominant influence on productivity, floor space, product and people

travel distance, inventory replenishment and control, and quality. First of all, with the help of 5S

tools the company will be able to eliminate some of the eight wastes within the manufacturing

process, due to the removal of all unnecessary items in the work area and due to an ergonomic

and appropriate created position for all the tools and materials used in the area (Hobbs, 2011).

This tool helps in improving or building a better working environment through a clean work

space and obvious signs that prevent wasteful occurrences such as delays, defects, injuries, and

others.
 31

The implementation of 5S is becoming more initiative and a part of the daily workday

schedule. Companies that have already applied 5S achieved some of the following benefits:

more available plant and office space, better communication and information sharing, increased

level of product quality, reduced machine downtime, improved productivity, and improved

safety. This, being one of the most efficient tools, has to be applied within the manufacturing

side to achieve reduced number of callbacks, reduced call time per customer, and reduced

training cycles for new employees (Shahin & Janatyan, 2010). 5S process is a crucial process

that creates overall cleanliness by eliminating wastes in the work place and improves internal

organization, visual management and communication. It helps to make the area cleaner for

better performance. However, the success of the 5S implementation depends on each

employee`s input and participation.

The 5S process is one of the most fundamental and widely applied lean tools. Its

application is not a complicated process and has visual advantages in most cases (Williams, n.

d.).

Increase in productivity. By reducing lead times and improving product delivery times,

equipment downtime is reduced. Maintenance and cycle time improves daily and shift

startup times and reduces changeover time. With the help of the 5S tool, the amount of

time wasted searching for tools and equipment is reduced.

Increase in quality. 5S application help improve quality by reducing the amount of errors

and defects and implements standardization, thereby achieving output consistency. The

standards that simplify the work environment increase employee self-confidence.

Reduction in cost. 5S implementation helps achieve cost-savings by reducing inventory,

storage costs and space requirements. It improves safety thus reducing the cost of worker
 32

injuries and reduces the amount of scrap. This reduces production cost and improves

productivity.

Overall, the 5S system is a practical solution used to minimize wasteful activities by increasing

productivity within the certain area and reducing costs with the help of rearranging the work

environment.

Summary

This chapter discussed the Toyota Production System lean principles and under it several

lean methods and tools that help make the manufacturing process more efficient and productive.

It has revealed that lean manufacturing tools get applied by the companies in order to achieve

high production levels and increase customer satisfaction by eliminating waste and sustaining

continuous improvements. Chapter II provided details on how different types of waste arise

within the production site and it has demonstrated the importance of lean methodology for

minimizing and eliminating wastes. Furthermore, this chapter described the implementation

process and five stages it contains. According to the information presented in the chapter, the 5S

process assists companies in improving the physical organization of the work space, increases

productivity, and should be used to develop more efficient work flow. Chapter III will analyze

the data collection process used in the research and explain the methodology of each stage of the

5S implementation.
 33

Chapter III: Methodology

This study focused on implementing the 5S philosophy in order to improve efficiency in

the Creform area of Company XYZ. The company was dealing with some problems of

decreased productivity associated with unorganized work areas that were filled with excess tools,

materials, and other unnecessary inventory. This limited the work-space resulting in chaos. The

company could not sustain efficiency within this work-space.

Improvements were planned to be achieved by cleaning up and arranging the work area,

setting up the order process, and training employees on how to sustain continuous improvements.

The literature review discussed the 5S implementation process consisting of five stages: sort, set

in order, shine, standardize and sustain which were applied by Company XYZ in the Creform

area. The 5S implementation process was expected to improve the current situation within the

Creform area and proposed ideas to sustain the improvements over time. The 5S process was

taken into account to help the company re-organize its work-space, rearrange its tools and

materials, and achieve standardization within the Creform area. This chapter examines the data

collection process carried out in the project and provides the methodology of what has to be done

within each stage of the 5S implementation. Additionally, this chapter presents other lean

methods that might be used along with 5S concept.

Project Definition

The project started with development of the A3 report (Figure 4). A report is called A3

because of the international-sized piece of paper measuring 11x 17. Toyota started using an

A3 report to capture important information on one sheet more effectively during a meeting. It

typically contains the following sections: problem statement, scope, objectives, current

condition, future condition, implementation plan, functional approvals, and team members and
 34

their role. These sections follow one another in a logical order to clearly identify the problem

and propose a way to achieve the goal. An A3 report is a visual instrument used to obtain the

right decision at the right time. The report as an improvement tool connects the owner of the

problem and other members of the organization and encourages them to go together through the

problem-solving process.

1. A3 Project: Creform Area 2. Owner:

3. Problem Statement 10. Future Condition
(What is unacceptable with the current situation?) What would we like things to look like in the future?

4. Scope
(What is included and/or not included in the project)

11. Implementation Plan List of major steps required

Dates Responsible
1

5. Objectives 3

(Objectives should coincide with problems. Include quantitative goals. Ie.%) 4

5
6
7
8
9

9. Current Condition 10

(What is the current situation? Display your thinking in this box) 11

12
13
14 Verify / update Actual Results
15 Start new A3 Project
Implementation Plan Key: Gray Box indicates original project planRed X indicates milestone is late
Green O indicates completed milestone (on the date it was completed)

Measures should coincide with Objectives and be measurable. Measures should correspond to your tracking measures

6a. Measures 6b. Current Results 6c. Target Results 12. Actual Results
1
2
3
4

7. Functional Approvals: 8. Team Members & Role:

Figure 4. A3 Report

An A3 report was developed as the first step of this project. The A3 was needed to put

all the key data and information on a single sheet for a better understanding of the current

situation and the achieved results. The A3 report was used for identification of an existing

problem and for development of an effective action plan to find the right solution. The A3

report was also used to document the current condition of the Creform area in Company XYZ.

This report was designed to observe present facts, propose working solutions, as well as to start a
 35

checking or correction process and to achieve the stated goal. The data for the A3 report was

collected while visiting the plant and meeting with the supervisor and employees. The current

state of the area was identified and recorded with the help of observation.

Data Collection

The initial step of the project was to gather data to identify disadvantages of the layout

and to find out what parts of the area needed to be improved. Improvements were needed for the

following parts: casters` shelve stand, bins with screws, pins and other materials, working cart

and table, and tool drawers and equipment.

Before beginning the 5S process, a layout of the area was acquired to evaluate visually,

the problems of the area. The measurement of the area was taken by using the measuring tape

and presented with the help of Computer Aid Design (CAD) software (Figure 5).

Figure 5. Original Layout of the Creform area

 36

A Spaghetti Diagram (Figure 6) was utilized to identify movements of personnel within

the Creform area. The Spaghetti Diagram is a lean tool that helps to improve the area layout and

speed up the process flow. It is presented as point-to-point flow chart that shows the movements

of the product or employees through the process and helps indicate how many steps employees

take traveling from one section to another.

Figure 6. Example of a Spaghetti Diagram

In order to create a Spaghetti Diagram, it was necessary to draft a current work area in

detail, drawing lines to describe every trip of each person or unit makes from one point to

another. The use of a Spaghetti Diagram helped analyze the flow of movement of employees,

material, and motion waste on the basis of different manufacturing layouts of the Creform area.

With the help of a Spaghetti Diagram tool the distance between the working table and other

destination points within the manufacturing process were measured. It was important to

represent the current state of the area to evaluate how it might be improved and then compare it

with the final results. On the basis of the current and future layout, the researcher observed

employees movements and measured and collected data of how much motion time employees
 37

wasted in the area. The data was documented in a spreadsheet which helped evaluate initial

wasted time and reduced time after developing the new layout (Table 1).

Table 1.

Data Recording Sheet Template

State before 5S Implementation

Tools Parts/Supplies Motion
Time spent per day (minutes)

State after 5S Implementation

Tools Parts/Supplies Motion
Time spent per day (minutes)
Time saved per year Wasted & Saved time (before & after 5S implementation)
Before After
Wasted time per week (minutes)
Wasted time per year(minutes)

Time saved per year (minutes)

Time saved per year (hours)

Dollars saved per year

The project began by taking inventory of all Creform parts and equipment in the area and

creating the inventory list. All the items located in the area, were examined and the data

obtained within the examination process was recorded on the Inventory Tracking sheet (Table 2).

Actions that needed to be taken for each item also were presented in the table. The inventory list

needed to be discussed with the technical expert and the employees from the Creform area. This

helped the researcher propose the future steps that were necessary to make improvements within

the area. The companys essential goal was to identify unnecessary items and rearrange or

remove them from the Creform area. This inventory list was helpful to identify and classify the

tools and materials that were utilized in the area as well as discover supplies that were not

required.
 38

Table 2

The Inventory Tracking sheet Template

Items Action

5S Implementation

The first step in the process was sort. This is the step taken to identify the items in the

area to be kept and those that are to be removed. It also helps to get rid of any unnecessary items

that take space and create waste within the area. A required first step of the sorting process

started with clearing up the area. This must be done before the process could continue. All

items were moved out of bins and sorted by functionality: broken vs. working. The items stored

in the wrong place had to be removed from the area and red tagged for disposal. Materials, tools,

and casters that were considered as properly working ones were retained in the Creform area.

The second stage of the 5S implementation was to re-arrange all items, material, and

equipment within the area in order. Set in order is the step during which the company defines

the proper spot and location for each item that is used in the area. During the application of the

set in order process in the Creform area, casters, colored bins and other items had to be placed

into the bins differentiated by the appropriate type. Then, these items were required to be sorted,

organized, and located in the correct bin by an original equipment manufacturer (OEM) and part

number, and stored on the shelve stand. These bins were then labeled or marked with the proper
 39

labels to identify what items were inside the bin. The bins had to be located in a way everyone

could have easy access to them.

The third stage of the 5S process was to clean and shine the whole area including tools,

equipment, machines, the floor, tables, shelves and bins. This was a step taken to make sure

items and machines were clean allowing them to function efficiently and safely.

During the standardize stage, every machine and piece of inventory was relocated and

reassigned to the area that was taped to mark the proper location. These taped spots helped to

clearly differentiate the area. The equipment location had to be labeled with the following signs:

working table, recycling and scrap bins, work-in-progress, cutting machine, and cutting table.

The surface of the tool box had to be labeled with the sign not a storage area to prevent

employees from leaving other items on this table. In order to make employees put bins back

after they take them from the shelves, the shelves location had to be labeled and contained the

same information. This would help to standardize the cleanliness in the area. The information

contained on each shelf label consists of the part number. Extra boxes of the same inventory

were to be located on the same shelf behind the first bin.

The final stage of the 5S implementation was sustain. The main purpose of this step was

to maintain improvements achieved during the project. During this stage, the Creform board,

entitled Creform Work Cell - Cleaning and Rules, was to be relocated to a more visible place.

The Creform board was an efficient instrument that helps keep all the Creform creations in order.

The board display was made up of various sections. The section titles were: WIP rules, 5S

Cleaning, Disassembly rules. Employees were required to use a Creform build / WIP tag to

signify that the creation is in progress. Every Creform creation is expected to have a build tag on

it. Using the board, employees could also request the tools and materials needed for the future
 40

projects. The 5S Cleaning sheet was created to monitor that the 5S system was being

maintained. The board was created to ensure that all employees who work in the area are aware

of the main rules. Replacing the Creform board was a needed step towards continuous

improvements of the 5S implementation process. To sustain achieved progress within the area, it

was crucial to identify a proper location for the Creform book. This book is a standardization

tool that contains all the information needed to use certain materials and tools in order to build

required items for the production lines. This information is a detailed description of the

procedures and processes required for newly designed production tools and the repair of the

existing items.

Data Analysis

The data collected within the project was presented as a table which helped develop its

analysis. In order to identify opportunities for improvements the information gathered about the

current and future state was compared. A Spaghetti Diagram was used to identify inefficiencies

in the work area layout, resource allocation opportunities, and perspectives for better employee

communication, safety improvements, and reduced material handling. It was an essential step

for the researcher to evaluate how much saving the company could achieve as a result of the

project implementation within the Creform area.

Summary

This chapter covered the methods that were used to accomplish the goal of improving the

Creform Area. Within the project several lean tools were utilized including: 5S, Spaghetti

Diagram, A3 report, and the seven wastes concept. The A3 report was needed during the project

to clearly state the problem, identify the implementation plan, and define the results. 5S tools

were applied to increase efficiency of the work space organization. A Spaghetti Diagram helped
 41

to examine the disadvantages of the current layout and optimize the movement of the employees.

The examination of the current and future state was a major step towards results. In Chapter IV

results of the process will be discussed.

 42

Chapter IV: Results

The lack of organization of the work space and disordered structure in the Creform area

of Company XYZ made it hard to efficiently work within the production environment. It also

resulted in unproductive movements by employees and in increased number of unnecessary tools

and materials within the work space. These activities limited the work area and led to wasted

time, decreased productivity, and inefficiency. In order to improve the current situation in the

Creform area, the company chose to apply 5S lean manufacturing tools. The 5S implementation

was able to help with reorganization of the work space which reduced the number of wastes and

improved productivity within the area.

This study focused on implementing the 5S philosophy in order to improve efficiency in

the Creform area of Company XYZ. The 5S tools were applied to restructure the work space,

rearrange tools and materials, and achieve standardization within the Creform area. In this

chapter the researcher analyzed the results of the 5S implementation. An evaluation of the state

of the area before and after the 5S concept was applied indicated that the waste was caused by an

inefficiently organized work-space.

A3 Report

The A3 report was used as a visual tool to obtain the right decision at the right time. The

report served as a connection point between the researcher and the management of Company

XYZ. The A3 report was developed to present important information on a single sheet of paper

for a better understanding of the situation.

The first step of the A3 report was an identification of the problem. The researcher

scheduled a meeting with the supervisor and employees in order to discuss and identify problems

that existed in the Creform area. Furthermore, observation of the area was prepared at the
 43

beginning of the project as a part of the problem statement process. The problem statement of

the project was concentrated on the improvements of the current condition of the area and on the

development of the current layout. Company XYZ experienced lost productivity within the

Creform area because of lack of order and control, resulting in increased costs. Additionally,

inefficiency in the area was caused by poor organization and decreased employees`

responsibility.

After the problem statement was defined, the research focused on the clarification of the

scope of the project. Since the organization of the work space was poor and the structure of the

Creform area was chaotic, the scope of the research was to develop a more beneficial layout for

the area in order to create more work-space and to achieve the 5S implementation of the level 3.

A level 3 Organization Understanding of the 5S method assumes that employees are

knowledgeable of the 5S process as the company has already went through the prior two levels

of initial efforts and general awareness of needs. Therefore, the main purpose of the project was

an improvement of the efficiency and creation of better working conditions in the Creform area.

Elimination of the waste that existed in the area was necessary to accomplish the project goal.

In order to record the before condition of the area, the researcher visited the plant and

took pictures. The lack of organization of the work space and chaotic structure of tools and

consumables was observed and noted as the before condition of the area. The machines, tools,

materials, and other supplies were found to be in a disorganized state within the area. The

following equipments and tools were used in the Creform area: chop saw, pipe cutter, table saw,

dust collector, working table, casters rack, panel saw, pipe racking, recycling and scrap bins.

On the basis of the observation and evaluation of the existing problems, the researcher

developed an effective implementation plan to enhance the situation. The project began with
 44

developing a Spaghetti Diagram of the employees movements within the old area layout to

identify the next steps. It was continued by organizing tools and materials in the area in order to

reduce time employees spent to find the right items. The usage of visual elements was

considered a critical part of the process. This included labeling and taping off the equipment

location. Within the project it was necessary to advance the labeling system, update, and

standardize label information for every component in the area. A new floor layout was applied

to create more available work-space. The A3 report was a tool used to develop an effective

action plan to find the right solution. The A3 report that was developed by the researcher during

the project is shown in Figure 7.

1. A3 Project: Creform Area 2. Owner:

3. Problem Statement 10. Future Condition
The creform area can be used by all employees to build or fix different Organize the tools and materials used for the various projects.
items for any of the cost centers. Company XYZ experienced lost Reduce the amount of motion performed by employee. (Floor layout)
productivity within the creform area because of lack of order and control, Develop a more efficient floor layout.
resulting in increased costs. It resulted in an area that is hard to work
efficiently in.
4. Scope
In scope: Layout and 5S of the creaform area

11. Implementation Plan List of major steps required

Dates Responsible

1 Interview employees in area

2 Formulate a plan

5. Objectives 3 Draw current layout

Obtain a 5S level 3 4 Sort tools and materials

Establish control of consumable items 5 Red tag

Reduce motion time, excess inventory, and searching time 6 Recycle unneeded materials

Improve efficiency 7 Organize materials

Create better working conditions 8 Shine / clean area

9 Labeled bins with proper part number

9. Current Condition 10 Visual work place (taping area)

11 Move equipment into proper area

12 Accessibility of board
13 Draw spaghetti diagram/adminestrative work
14 Verify / update Actual Results
15 Start new A3 Project
Implementation Plan Key: Gray Box indicates original project planRed X indicates milestone is late
Green O indicates completed milestone (on the date it was completed)

Measures should coincide with Objectives and be measurable. Measures should correspond to your tracking measures

6a. Measures 6b. Current Results 6c. Target Results 12. Actual Results
1 5S Level 3 0 3 3
2
3
4

7. Functional Approvals: 8. Team Members & Role:

Figure 7. A3 Report Analysis

 45

Data Collection Results

The project began by taking the entire Creform inventory and creating the Inventory

Tracking sheet shown in Table 3.

Table 3

The Inventory Tracking sheet

Items Action

Should be sorted with broken ones recycled, then sorted

Casters
and organized by part number.

Determine what tools are required in the area to perform

Toolbox
typical work. The remaining tools should be taken away.

Mats These get relocated to another area.

Carts of miscellaneous Review with employees what is needed.

Hardware

Sort and identify pieces that are smaller than 25-50% of

Wood scrap
new. They should be recycled.

Those are totes the factory uses to store small items on the

Pipe colored bins production floor. These items are not used in the area,
however just stored.

Every creation that is in progress is required to have a WIP

Work in progress (WIP)
tag. Those are not needed anymore should be recycled.
 46

The meeting with the supervisor was scheduled to discuss which items were required to

be kept in the area and which were not needed to any further extent. The researcher proposed

ideas about the next steps taken within the area to make it more efficient. The action plan

regarding the listed items was approved by the supervisor of the Creform area.

The data collected during the project was analyzed and applied to evaluate the old layout

of the area, and furthermore, to create a new more beneficial layout. This data was collected by

work observation and meetings with employees. It was observed that if there were more than

one employee working the same shift in the area, the work space was not sufficient. In this case

the second person needed to find any other available work station.

Within the area there were many tools and consumables that lacked order and structure,

and limited the work space. The employees of the Creform area needed to walk around

equipment, materials, and WIP inventory to get the right part or tool during the working process.

The major goal of the creation of a new floor layout and 5S implementation was to make the

usage of the existing work space more efficient. This allowed several employees to use the area

at the same time and work more productively.

A Spaghetti Diagram was created to illustrate the movements the employees made to

create Creform products during the project. A Spaghetti Diagram was utilized to draw and

describe every trip employees made from one point to another, within an old floor layout shown

in Figure 8. As it is reflected in the diagram, employees wasted time to walk through obstacles

that existed in the area. They also walked too often between the parts racking and the working

bench as it was the main working point in the area where employees were creating their racks.
 47

Figure 8. Spaghetti Diagram of distance traveled by employees within an original layout

Results of the 5S Implementation

5S tools were applied to improve the before situation within the Creform area by

rearranging all the tools and materials used during the working day, reorganizing the work space

and therefore making its usage more efficient. The sort stage began with clearing up the area. In

the Creform inventory, bins were removed and tools were sorted by properly working ones and

broken ones.
 48

All items that were not needed in the area any longer were red tagged and removed for

further recycling (Figure 9). Materials, tools, and equipment that were noticed to be necessary in

the area were considered for the next stage. The main goal of this step was to leave only tools

and materials within the area being used by employees and remove all the unneeded and surplus

items.

Figure 9. Red tagged items

During the second stage of the 5S implementation all materials, tools, and equipment

were set in order and rearranged. Each item was placed where it was required to be stored.

Casters were sorted by a part number, and then located into appropriate bins differentiated by

type. All the parts needed for the Creform creation were rearranged by part number and placed

in the right order on the shelves. This step was taken to make it easy for employees to know

where the supplies were kept in order to find the right part faster. According to the

rearrangement process above, employees would be able to clearly realize if there were enough

supplies to start and finish the project or if they needed to make an order. Figure 10 shows the

set in order stage where the entire inventory was sorted properly.
 49

Figure 10. Supplies rearranged by a part number or type

The third stage, shine followed the set in order. During this step tools, machines, and

equipment were cleaned and wiped down, floors swept, tables, shelves, and bins cleaned and

prepared for supplies. This step was to ensure that the employees might easily tell what

equipment is in need to be maintained or fixed, what supplies are enough to finish the project and

what items are required to be ordered. Each employee who works in the Creform area needs to

clean after the shift is over.

During the standardization stage, each piece of equipment was relocated to the

appropriate area that was taped off to reassign the area under the specific equipment. The

equipment location was labeled with the following signs: working table, work-in-progress, chop

saw, pipe cutter, table saw, dust collector, casters, and panel saw. This improvement was made

to identify a proper placement for each machine (Figure 11).

Figure 11. Taped off location for the equipment

 50

Equipment location labeling was a part of the project to standardize the area. This step

was to ensure that equipment was ready for the next person to use. Before, the equipment was

kept everywhere in the area and did not have any specific location. This created a problem when

equipment was not returned back to the location after usage. The change to standardize the

equipment location by taping off the floor under the certain piece of equipment made it easy for

employees to return it to the proper location. This also was a part of the clearing area up process

in order to create more available work-space.

In order to standardize the location for all supply bins and ensure employees return bins

after using them to its correct location, each bin and shelves spot that it belonged to was

properly labeled with the part identification part number and description.. It also told employees

what bin might be missing and what parts should be reordered.

Figure 12 illustrates the labeling procedure for the location of each bin as well as each

bins label. The labeling system helped to identify the right parts by all the employees working

in the area. Bins contained excess supplies were located on the same shelf right behind the first

bin.

Figure 12. Labeled bins and their locations

 51

In order to keep the surfaces of the tool box and top shelf of the casters racking clean, it

was labeled with the specially designed sign that stated not a storage area. This prevented

employees from leaving different items on the surface of the tool box and top shelf of the casters

racking (Figure 13). Labels contained standard information that was clear for any employees

entering the Creform area.

Figure 13. Labeled surface of tool box and top shelf of casters racking

The final stage of the 5S implementation was sustain. It was to make sure that

improvements achieved during the project were kept and maintained over time. Due to the fact

that a new desired layout was applied, the Creform board was replaced to a more beneficial

location (Figure 14).

In this case each employee within the area had an idea of how to use specific tags

required for each project, how to inform other members about their unfinished creations, and

how to follow 5S cleaning rule. It was required within the project to make the board more

visible and helpful for employees to use. This step was to clear the area up in order to create

more available work space.

 52

Figure 14. Creform Board

Within the sort stage the Creform book was discovered in one of the tool box drawers. It

was noticed that it was hardly used during the creation process (Figure 15). The researcher

identified a more favorable location for the book to make it used by the employees (Figure 16).

The usage of the book made the Creform creation practice faster and easier as it contained

detailed information about the whole process.

Figure 15. Previous Creform book Figure 16. Identified Creform book
location location
 53

Results from a New Layout Development

After the 5S tools were applied in the area, a new layout was developed. The working

table was moved closer to the materials and supply racks. The piping stand was relocated closer

to the wood storage to make the work space open.

An analysis of the developed Spaghetti Diagram after the new layout was applied

signified that the total amount of steps made within the area was reduced due to relocation of the

work bench and pipe racking, and due to removing all the extra unnecessary tools and materials

in the Creform area (Figure 17).

Figure 17. Spaghetti Diagram of distance traveled by employees in new layout

After reviewing the Spaghetti Diagram, the collected data was transferred into the

spreadsheet that indicated how much time employees spent on searching for tools, parts and
 54

other supplies, and on motion. Wasted time that employees spent per day in the old area layout

and saved time after project improvements were put into practice is shown in Table 4. In the old

area layout employees wasted 17,420 minutes per year on searching and motion. After the

project was implemented, the employees waste on motion and searching became 8,190 minutes.

The increase in productivity and layout improvements was 52.9%. With the new layout of the

Creform area the company reduced their work content by 154 hours, that equated to $3,080.

annually if the employees hourly wage is $20.00.

Table 4

Data Recording Sheet

State before 5S Implementation

Tools Parts/Supplies Motion
Time spent per day (minutes) 5 2 60

State after 5S Implementation

Tools Parts/Supplies Motion
Time spent per day (minutes) 1 0.5 30
Time saved per year Wasted & Saved time (before & after 5S implementation)
Before After
Wasted time per week (minutes) 335 158
Wasted time per year(minutes) 17,420 8,190

Time saved per year (minutes) 9,230

Time saved per year (hours) 154

Dollars saved per year $3,080

hourly salary is $20.00

Summary

Application of the 5S lean manufacturing tools helped to improve the Creform area

conditions. The area became more organized, cleaner, and more visible. This resulted in

products being produced in a more efficient manner within the Creform area and in less time.

The labeling system that was applied in the area allowed employees finding supplies quicker and
 55

keeping all the equipment and inventory in order. It was observed that employees were wasting

time moving within the area from one point to another. A Spaghetti Diagram, created by the

researcher on the basis of an old and a new floor layout, helped to identify how much time was

wasted and how much savings the company could achieve after improving the area. As a result,

Company XYZ could achieve $3,080 in savings per year because of implemented improvements.

Additionally, in order to sustain the achieved results within the area the Creform board was

relocated to a more visible place as well as the Creform book was put on the top shelf of the

material racking in order to be used by the employees. The project helped to eliminate motion

waste and remove surplus items from the area making the production more efficient. In Chapter

V the limitation of the project and proposed recommendations will be presented and examined.
 56

Chapter V: Discussion

The implementation of the 5S lean manufacturing tools was required to improve the

Creform area conditions and increase efficiency of the manufacturing processes at Company

XYZ. The employees were working within an uncomfortable, messy environment, which was

full of unnecessary items and excessive inventory. The existing problems led to the spread of

non-value-added activities that consumed time, people, space and did not add value to the

finished product. Due to these factors, the employees wasted time to avoid obstacles that existed

in the area and to search for the right item between unneeded inventories.

The main purpose of the project was to apply the 5S tools containing the following steps;

sort, set in order, shine, standardize, and sustain, to manage and improve the physical

organization of the area. Application of 5S was focused on sustaining the cleanliness of the area

to streamline the flow of work. In order to accomplish the goals and create improved working

conditions for employees within the Creform area, the researcher needed to create a more

beneficial layout of the area and considered the elimination of the existed waste such as motion

waste, searching waste, and waste of excess inventory.

Chapter I examined the problems existing in the Creform area and addressed why it was

necessary to improve conditions of the area. Chapter II researched the literature about lean

manufacturing and 5S practices. It also reviewed the major benefits of 5S implementation and

how it improves the efficiency of the production area and facilitates in the elimination of the

waste within the manufacturing processes. Chapter III discussed the data collection process

carried out in the research and provided the methodology of each stage within the 5S

implementation. It also identified other lean tools that might be used along with the 5S concept.

Chapter IV described the results achieved after the 5S implementation and the major benefits the
 57

company received from the process, such as reduced waste of searching time for the right tool,

motion time, and waste of excess inventory. This chapter reviews limitations of the study and

the recommendations the researcher made on the basis of the project results for future

improvements.

Limitations

This research was conducted only within the Creform area and did not take the entire

manufacturing area of Company XYZ into consideration. The results of the project were limited

to the certain area condition and the current area layout that existed in the Creform area within

the time the project was carried out. Improvements and recommendations were limited to the

space of the assigned area.

These results could not be applied from outside of the scope of this research. Lean tools

that were used during the project such as a Spaghetti Diagram and 5S were used to identify

development of the Creform area. The researcher applied only these lean tools as they were

found to be the most applicable to accomplish the goal. Application of other lean tools was not

considered because of the specified time frame. It included no additional equipment and

materials in the particular area.

Conclusions

The project was successful on the basis of the applied lean manufacturing tools and 5S

concept. The reduction of the waste such as motion, excess inventory, and time on searching for

tools as well as the identification of the new desired area floor layout were the major goals

accomplished within the project. Company XYZ reduced their work content by 154 hours, that

equated to $3,080 annually, after the improvements were achieved during the project. With the

help of the Spaghetti Diagram that was created by the researcher to describe each trip the
 58

employees made from one point to another, time wasted on travelling within the area was

reduced by 50%. The labeling system applied in the area was a crucial part to achieve

standardization within the area. This allowed identification of a proper location for equipment

being used in the area as well as it helped employees find the right parts on the shelves and

assisted in easier re-ordering process. With the use of the 5S tools, the Creform area became

more organized, cleaner, and more visible which increased efficiency in the area. The improved

working environment led to higher productivity during the manufacturing process.

Recommendations

The main goal of the project was the identification of a new floor layout and the 5S

implementation in order to streamline the flow of work and reduced waste that existed in the

area. Results were achieved by developing a Spaghetti Diagram for an old and a new area layout

as well as by applying the 5S tools in the Creform area of Company XYZ. Usage of these lean

tools led to increased efficiency in the workplace. The application of the 5S concept and lean

tools within other departments in the company would provide additional cost savings and a better

organization throughout the manufacturing processes. Further analysis of the Spaghetti Diagram

and floor layout conducted for the specific areas will help to identify what improvements can be

made to increase efficiency and develop a better working environment.

The 5S implementation was able to help with reorganization of the work space that

resulted in reduced waste and increased productivity within the area. Significant time saving

might be achieved in other companys sections with the help of the 5S tools. It allows for

elimination of obstacles and employees may move freely within the area. The created condition

of the area should be sustained by the employees with the help of daily housekeeping and

constant monitoring. The employees need to conduct cleanup at the end of the working day and
 59

make sure that every tool and material bin is returned back to the same location. These

improvements should be maintained by the team rather than individual employee. Other

departments of Company XYZ need to consider 5S implementation to improve the work areas.

By applying 5S tools within other sections, the company will create a better working condition,

develop more efficient floor utilization, and increase productivity.

The lean culture will allow the employees to work as a team towards continuous

improvement. It will also continuously improve the operations as employees will often achieve

additional small improvements. In order to maintain a lean culture, it is necessary to apply small

ideas every day rather than a big change that happens at once.

The success of the 5S process will also require the development of the weekly audit list to

sustain the created condition in the area (In Appendix A). It might contain the central tasks of

each stage of the 5S to ensure that employees are aware of the improvements needed in the area.

This visual tool will keep all the employees engaged to accomplish the tasks and keep the area in

better condition.

The achieved results proved the necessity of the 5S implementation in the area.

Company XYZ needs to provide future training on 5S within the whole organization to educate

other employees about 5S benefits. This will help implement continuous improvements

throughout the company.

Within the second and fourth stages of the 5S process, all the tools and materials were

sorted in order and the labeling system was developed to help employees clearly see what items

are in use and what items were not returned back after their handling. In order to keep all the

inventory in order, the company needs to assign the right person to be in charge of the section.

This person will be able to supervise the employees during the working day within the area that
 60

will allow sustaining continuous improvements in the section. This idea might be applied in any

other department as well in order to increase control over the inventory and processes. It will

also improve internal organization of any area that helps to establish convenient work

atmosphere.

During the project it was observed that power tools belonging to the Creform area were

sometimes being used by different departments. The researcher proposed to develop the

retractable tool system within the area to make sure that all the expensive power tools returned

back after being used. Development of this system will require the employees to put the working

badge on the place of the tool to guarantee it will be returned back at the end of the day. Along

with this system a shadow board for tools might be created to establish control through visibility

and sustain the organization of the work area. In order to improve the entire process of the

company the shadow board concept should be applied to the whole operation, not just to one

section. It will help to keep control over inventory, improve floor space utilization, and organize

a better flow of tools and parts.

In order to improve the working conditions throughout the facility the company needs to

apply visual management tools for any other section that experience difficulties in finding tools

and materials. Visual concept makes it easier for employees to find needed tools, parts, and

material at a glance. This will also help to develop a control through visibility as well as

decrease searching time and increase productivity within the specific area. Every department can

take benefits out of visual management tools implementation as it was achieved in the Creform

area.

The implementation of the project helped the company eliminate motion waste within the

area. It was examined that employees spent a lot of time during the working day near the
 61

workbench and wasted time on getting tools and supplies. It was proposed to drop down extra

power cords above the workbench to save wasted time. The same idea might be applied in any

area of the company where it is possible and needed.

In order to improve the processes throughout the whole organization, the management

team has to find new solutions for future improvements. This might be done by communicating

with the employees of the working stations to determine where changes are needed in order to

identify the possible methods for improvements.

Summary

Implementation of the 5S concept improved the Creform area work condition at

Company XYZ. The company needs to apply 5S tools within other departments in order to

eliminate wasteful activities, maintain better performance of the areas, and increase efficiency.

The company should share material about 5S practices throughout the operation. It would be

helpful for other departments to get information about the benefits that 5S tools can bring to their

areas. Furthermore, Company XYZ should provide training to the management and other

employees to ensure that employees will maintain a lean culture and work as a team towards

continuous improvements. Improvements cannot be achieved during one day, they happen

through small steps over time that lead to the final results.
 62

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Appendix A: 5S Audit

5S AUDIT CHECKLIS T
AREA: Area DATE:

S ORT S ET IN ORDER S HINE S TANDARDIZE S US TAIN TOTAL

Total Score 0 0 0 0 0 0
I
S ORT ACTIVITY DES CRIPTIONS S CORE (0-5)
Only the required spare parts, materials, WIP, etc. are present at the workstation. Items not required to 0
Only the required tools are present at the workstation. Items not required to make the current product are 0
removed from the workplace.
Only the required paperwork is present at the workstation. Out-dated or otherwise unnecessary posters, 0
Only the required equipment is present at the workstation. All obsolete, broken or unnecessary equipment, 0
shelves, lockers, workbenches, etc. not required to make the current product is removed from the workplace.
S ET IN ORDER ACTIVITY DES CRIPTIONS S CORE (0-5)
Locations for containers, boxes, bins, WIP, materials, etc. is clearly defined by painted lines and properly
0
labeled (part number, quantity, etc.).
Tools have a designated storage location that is within reach of the operator. The location is properly labeled
0
and tools can easily be identified if absent.
Paperwork is properly labeled and has a clearly defined and labeled location that is visible to the operators and
0
away from work surfaces.
Equipment is clearly identified (numbered, named, color coded, etc.) and placed in a properly identified
0
location. Critical maintenance points are clearly marked.
The workplace layout accomodates easy exit in case of emergency. 0
S HINE ACTIVITY DES CRIPTIONS S CORE (0-5)
18) Containers, boxes, bins, etc. are clean and not cracked, torn, or otherwise damaged. They are neatly stacked. 0
19) Tools are kept clean and in good working order. Where possible, tools are stored in a manner to keep them
0
clean and free from risk of damage.
20) Paperwork is not torn, kept clean and protected from dirt. 0
21) Work surfaces (machines, workbenches, dies, and other equipment including electrical boxes) are clean and
0
painted.
22) Floors are free from dirt, debris, oil, parts, hardware, empty boxes, packaging material, etc. Drains (if required)
0
are properly located and unclogged.
24) There is a schedule showing times, frequency and responsibilities to clean areas of the workplace such as
0
windows, corners, walls, doors, top of cabinets, etc.
25) All cleaning equipment is neatly stored and is readily available when needed. 0
S TANDARDIZE ACTIVITY DES CRIPTIONS S CORE (0-5)
28) Tools, equipment, paperwork, furniture, etc. are stored neatly in designated areas and are returned
0
immediately after each use.
29) Documents are labeled clearly as to contents and responsibility for control and revision. The date and revision
0
number are clearly visible.
30) Equipment maintenance records are visible and clearly state when maintenance last occurred and when next
0
maintenance is scheduled.
31) Product waste (e.g. shavings, containers, liquids, wrappers, etc.) is consistently and often cleaned up and
0
removed from the workplace.
32) Preventive measures have been implemented to ensure the workplace meets 5S guidelines (e.g. systems that
0
do not allow waste to accumulate such as containers to collect product debris from machines).
33) The results of the previous audit are posted and clearly visible to the entire team. 0
34) Areas for improvement identified during the previous audit have been completed. 0
35) The work environment satisfies the requirements of the work being performed. Lighting (brightness and
0
color), air quality, temperature, etc.
S US TAIN ACTIVITY DES CRIPTIONS S CORE (0-5)
36) A member of Management has participated in a 5S activity such as an audit or other activity within the past
0
3 audit periods.
37) Recognition is given to teams who get involved in 5S activities. 0
38) Time and resources are allocated to 5S activities (e.g. designated daily/weekly clean-up time, 5S team leader,
0
etc.)
39) All operators, team leaders, supervisors, etc. are assigned 5S activities to be completed at least once/week. 0
40) The team took the initiative to make improvements to the workplace that were not identified during the last
I
5S audit.
0