Ransohoff: A Lean Enterprise Case Study
By Scott K. Buchko, TechSolve Inc.
Ransohoff is a Cincinnati-based manufacturer of industrial parts cleaning systems, high-pressure water deburring systems, and wastewater filtration and treatment systems. The company provides standard machines and custom, engineer and build-to-order machines. Currently employing 178, Ransohoff was founded in 1916 and occupies a 100,000 square foot facility. Ransohoff began their lean journey in 1998 through an enterprise-wide assessment, various benchmarking plant tours, basic lean manufacturing training, and several highly targeted improvement projects.
"The desire to learn more about lean and how it could help Ransohoff really came out of two basic needs. One, we needed to be more price competitive and two, we needed to reduce our order to delivery cycle time," says Jim McEachen, Ransohoff President. One of the first lean tools Ransohoff used was value stream mapping. This is a process used to create a material and information flow map of a product line or process. Typically, one product or process is focused on and followed from raw materials to the finished product stage. Value stream mapping enables a company to "see" the entire process in both its current and future, desired state and develop a roadmap that prioritizes the projects or tasks that bridge the gap between the current state and the future (lean) state map.
At Ransohoff, their first value stream mapping exercise focused on a specific customer order following it from their sales department through final installation of the product at the customer's facility. The exercise took three days and involved a 15-person cross-functional team. According to Jim McEachen, "The keys to success for us [throughout the value stream mapping process] have been assigning a champion, using cross-functional teams that cross both vertical and horizontal boundaries, and using TechSolve, Cincinnati's leading lean manufacturing experts."
Ransohoff's initial value stream mapping exercise showed a total cycle time, including the sales cycle, of 354 days. Of those 354 days, approximately 24% of that time was deemed value added. This exercise identified and then prioritized many areas for improvement. The decision was made to test one major initiative, which was the implementation of cellular teams. This "test" cellular team would be responsible for manufacturing a previously conceived product/market idea. Because Ransohoff's products are typically large, the idea of creating a small industrial parts washer that was right-priced and right-sized to fit into lean manufacturing processes or work cells was well-received from their clients. Thus, the birth of the LeanJetTM family of parts cleaning systems.
The first process cellular team was made up of personnel responsible for inside sales, proposal, electrical engineering, mechanical engineering, purchasing, project management, and manufacturing. Their work was focused on the LeanJetTM family of products and became the "test case" for the remainder of the company.
As success was proven in this process cellular team the company rolled out a team-based implementation across the company. Today, the company has developed a new organizational chart that is focused on product lines and not functional areas. The full implementation has been accomplished in two product families with three groups having achieved partial implementation. The company-wide support functions of marketing, finance, human resources, and quality still exist today, as does a group dedicated to continuous improvement called the lean/kaizen office.
The LeanJetTM has become a significant contributor to Ransohoff's success and has been strongly accepted by the marketplace. The product is manufactured in an optimized lean manufacturing line and the company is optimistic about the future prospects of this family of products.
Since the introduction of the LeanJetTM, Ransohoff has continued to tackle other areas for improvement including a late parts project, stockroom kaizen event, and two "front-office" value stream mapping exercises focusing on the customer information flow and the engineering flow.
The late parts project consisted of the implementation of point-of-use storage in the pipe and pipe fittings area, elimination of requisitions, institution of single job folder tracking form, and improved communication amongst material handlers. According to McEachen, "This one project has resulted in a 30% reduction in late parts and a savings of over $300,000 annually."
Perhaps the most visual project Ransohoff has undertaken was the week-long stockroom kaizen event. The results were overwhelming, even to Ransohoff team members who saw the changes. McEachen said, "Not only did this event create over 4,300 square feet of productive manufacturing space that we didn't know we had, but it led to an increase in revenue, decrease in inventory and scrap. In addition, we eliminated over 2,351 miles of walking annually, saving us $48,000 each year."
In just under 4 years, Ransohoff has been able to implement many lean manufacturing principles and used many lean tools, but they are far from done. "I am excited about where we are today, but we have much more to do," says McEachen. "I want to tackle one-piece flow, our quality system, and other "parking lot" items from previous kaizen events. On a single, multiple unit order Ransohoff has experienced an 80% improvement in quality, 18% in cost reduction in material, and a whopping 416% return on investment in this project. We are very excited about repeating these results in other areas of the company."
There have been many lessons learned for Jim McEachen and his team at Ransohoff. According to McEachen, "I urge you to do something, even if it's wrong - you'll learn from it, and eventually you will get it right! I would recommend making a no layoff guarantee, relative to lean manufacturing improvements. Get employee buy-in early and train those employees early - start by sending them to a one-day lean simulation or something similar. Document, communicate, and post all savings and milestones reached so that those [that are] not involved see what you are doing. Apply constant pressure to change for the better- don't let up. And, keep outside consultants involved as long as possible - they help you avoid the pitfalls and see your business from outside your four walls."
In talking about Ransohoff's continuing path, Jim McEachen says "Never forget that lean is a journey - you will accomplish much, but much more remains to be done. The key to making these initiatives succeed is to concentrate on the waste that is being driven out and the gap that is closing between you and your customer."
About the author:
Scott K. Buchko is the Sales and Operations Manager at TechSolve. TechSolve, one of the NIST Manufacturing Extension Partnership (NIST MEP) Centers as well as an Ohio Edison Technology Center, serves manufacturing companies in 23 Southwest Ohio counties through its consulting services, membership program, and training events. For more information, please visit www.techsolve.org or contact Scott at 513-948-4023 or firstname.lastname@example.org. To learn more about Ransohoff, please visit their website at www.ransohoff.com.