Lean Manufacturing Principles in the Paper and Packaging Industry

Case Studies Paper & Packaging
Enterprise-Wide Paper and Packaging Operations
Top 3 Global Packaging Producer Enterprise Operations

Case Study: Lean Manufacturing Principles in the Paper and Packaging Industry

United States

How to Implement Lean Manufacturing Principles to Increase Customer Satisfaction

The manufacturing company’s packaging products were the low-price leaders. Customers included the world’s most recognized consumer brands. Historically, each plant acted independently on manufacturing cost reduction ideas. But now customers complained about the “total costs” they incurred from the company’s errors, delays and rework. Higher-priced packaging competitors were making inroads. They showed customers how to improve manufacturing operational efficiency with lean production techniques—from packaging design through lean logistics, inventory and scrap reduction techniques.

The company’s response: internal operations consulting. A manufacturing kaizen blitz targeted improving capacity planning and reducing the 7 wastes on the plant floor. These were old improvements. The effort failed to look end-to-end across customers, the sales force and the product development groups.

Project Sponsor:

Chief Marketing Officer

Non-technology, self-funding operational
improvement implementation:

– No new technology
– End-to-end lean process improvement
– 6-month implementation

Client Description, Project Scope, Objectives

The Chief Marketing Officer (CMO) launched an end-to-end, lean continuous improvement effort. She used The Lab’s non-technology improvement templates and lean transformation methodology to focus on both knowledge work productivity and manufacturing production operational efficiency.

Her effort defined valuable business process services that could show customers how to improve operational efficiency and reduce manufacturing cost through packaging options: just-in-time inventories, simplified packaging design, reusable and green options. Productivity metrics indicated that the CMO’s strategy increased customer account profitability by 10 percent where implemented.

The company is a global Top 3 producer of paper and fiber packaging products with over 25,000 employees.

Implementation began with a 6-week Phase I analysis. This delivered a guaranteed, self-funding, non-technology improvement work plan. Phase II implementation work was complete in 6 months.

Project Objectives:

– Operational efficiency
– Productivity improvement
– Lean management

Project Scope:

– Product design
– Marketing
– Order management
– Production
– Scheduling
– Customer service

Lean Manufacturing Principles Implemented in Paper and Packaging

The Lab implemented more than 270 non-technology lean production process improvements. Examples:

Lean Service-Based Production Customer Segments—Regional segmentation was replaced with a 3-tier system based on the scope of business process services required by customers. The low tier wanted only bare bones, low-cost, order-to-cash process services. The top tier wanted complex services: coordinated lean production of packaging and products, including collaborative inbound logistics and material management.

Focused Lean Factory Product Allocation Principles—Historically, each plant produced most products. All plants benefited from lean manufacturing principles. But service-based customer segments showed how to reduce manufacturing cost further. Low-cost products for low-service customer segments were allocated to dedicated plants. Unprecedented operational efficiency was achieved from long runs and few changeovers.

Order-to-Cash Transformation—Knowledge worker productivity varied up to fivefold for identical tasks. The Lab’s Activity Cube enabled business process modeling to quantify the benefits of order-to-cash best practices. Cycle times were reduced by 30 percent and order errors fell by 80 percent.

Implementation Results:

  • Operating cost 30%
  • Cycle time 30%
  • Productivity 20%
  • Order errors 80%
  • Break even point 5 mos.
  • ROI (12 month) 5x