Production on the rise for Monadelphous

With a goal to double in size every five years, Monadelphous Gladstone needed to ensure they took every opportunity to improve their efficiency. By introducing the 5S System, within weeks they have improved productivity by 5-10%, with workers walking half as far to do the same job. Working with QMI Solutions set Monadelphous up to roll out 5S and reap the benefits across the whole workshop, supported by a receptive and enthusiastic workforce.

Leading engineering group, Monadelphous Group Limited, provides extensive engineering construction, maintenance and industrial services to the resources, energy and infrastructure sectors in Australia and abroad.

With major offices located in Perth, Brisbane and Adelaide, Monadelphous also has fully equipped regional operations in key resource industry centres around Australia. One such operation, in Gladstone, North Queensland, primarily services the aluminium smelters and coal industry. During 07/08, Monadelphous in Gladstone turned over $56M, doubling its capacity within two years.

"Our core business is general and specialised steel fabrication and high pressure piping. Currently we have about 50 employees in the workshop with an additional 360 involved in client site assemblies," said Dennis Wolfe, who first heard of QMI Solutions when he took up the role of Gladstone Workshop Manager early in 2008.

The Department of Employment, Economic Development and Innovation office in Gladstone had already conducted QMI Solutions' Manufacturing Microscope in October 2006, but due to management changes at Monadelphous, there was little follow up. "When I came on board my manager, Adrian Bubb, was keen to progress some of the areas the benchmarking had identified for improvement within the workshop," said Wolfe.

The Manufacturing Microscope, part of the PROBE suite of diagnostic tools, compiles a report through asking cross-functional and multi-level teams to score results via a self-assessment questionnaire with the guidance of an independent facilitator. The finalised scores are calculated against a world class model of manufacturing excellence developed by the London Business School and the IBM Consulting Group, and benchmarked against a cross-section of international companies within the data set. Intended as a management summary, the Manufacturing Microscope report expands and reinforces findings from the facilitated discussion with the company. The underlying assumption is that best practice in manufacturing leads to high manufacturing performance, which in turn leads to superior business performance.

The practices score of an organisation reflects the established processes and procedures in place to drive the business, whilst the performance score refers to what is actually achieved. The Monadelphous Gladstone site achieved a practice index of 65% and 62% for performance, putting them in the "contenders" category. The score indicated that performance was underpinned by solid practices and not just driven by key individuals. When compared with other companies in the Fabricated Metal Products sector it was three points above average in practice and two points below in performance.

The overall database sample average was similar to that of the sector average. Sixteen months later, the question Wolfe faced was what areas needed to be focused on to improve Monadelphous' score and meet their business objective, to double in size every five years. "It was clear from the Manufacturing Microscope report that the team involved were unfamiliar with Lean Manufacturing, 5S and identifying wasteful processes. An understanding of these concepts would be the key to any improvements in the workshop," said Wolfe.

Wolfe and Bubb attended a 5S Housekeeping workshop offered in Gladstone by QMI Solutions to brush up on the basics before commissioning QMI to undertake an in-house 5S Blitz. "Whilst working for another service company, I was involved in 5S implementation in a large multinational mining client. So I was aware of the benefits – a cleaner, clearer, less cluttered workplace that would be safer, more efficient and productive. I hoped that a 5S Blitz, conducted within the workshop and involving those who would be affected, would instil enthusiasm within the operators," said Wolfe.

5S is a structured, systematised approach to housekeeping and a cornerstone of any world class manufacturing operation. Most manufacturing professionals can walk into a facility and in a matter of minutes make a reasonable judgment about the degree of efficiency with which it can produce quality products. This judgment is derived primarily from observation of the cleanliness or the clutter of the plant. 5S involves creating an organised workplace using the five following steps:

1. Set in order – a place for everything and everything in its place
2. Shine – cleaning the work area
3. Standards – establishing the rules and standards
4. Sustain – maintaining the standards in a disciplined way

"We focused on one discrete section of the workshop, the machining area, for the first 5S Blitz, with a view to a subsequent workshop rollout," said Wolfe. The team of six, drawn from supervisors, leading hands and operators, was chosen to represent different roles and levels within the company structure.

"This 5S Blitz team was carefully chosen, as the first activity would be watched with interest by staff from other areas in the workshop. We involved some known skeptics, who ended up being amongst our most enthusiastic advocates," said Wolfe.

After a half-day theory session, the team headed out into the workshop for an intense day and a half of implementation. "Of every item in the machining area, we asked ourselves 'Has this been used in the past six months? Are there any definite plans to use it the near future?'" said Wolfe.

When the answer was "no", the item was 'red-tagged' and quarantined in one area. Then the team collectively made a final decision on what should be identified for disposal. "We threw out half a tonne of material, including parts that belonged to obsolete equipment no longer used. There was stock from old jobs that was not labelled so no-one knew what it was," said Wolfe.

The next step was to "Set in Order". Although there were general areas where particular things could be found, these were by no means formalised and often the sought after item was missing, giving rise to a prolonged search and lost productivity.

A visual system was set up so it was easy for operators to find things and replace them in the appropriate spot for the next user. "We created a central position for commonly used items that was quick and easy to access from any of the four machines in the area," said Wolfe. Drills are now located on a circular rack with the sizes marked for easy return, with the parts and chucks used on the lathes located on another circular rack. Shadow boards have been introduced for other tools and cleaning equipment, and located adjacent to the appropriate work centres.

"We are already seeing improvement in the machining area, even though the activity was just weeks ago. The distance walked by operators has reduced by about 50% and productivity has improved 5 to 10%," says Wolfe. The next step, Shine, is to clean the workplace. Deceptively simple, it has the net effect of a brighter, more pleasant and safer workplace. "Once we had scrubbed the area, we colour-coded everything using different coloured paints. We also added new demarcation lines to indicate no-go zones when machines are in operation," said Wolfe.

The team made up guards to prevent the build-up of 'swarf' (off-cut ribbons of steel) behind the machines. Although this was identified during the 'shine' stage, it laid the foundations for the 'standardise' stage, which involves establishing rules and standards.

"Making the guards up simplified an arduous task and allowed the creation a new, safer procedure. What was previously been an hour-long job of getting into a dangerous, tight area, now takes a quick five minute rake out once a week," said Wolfe.

In the past, each worker has been loosely responsible for the cleanliness of their area, however the allocation of tasks had never been formalised or specific time set aside, making it easy to forget or neglect at busy times.

"We have established a simple cleaning schedule. At the end of each job, which could be one to two days, time is set aside within normal working hours for operators to clean their own areas," said Wolfe. The previous fortnightly safety audits are now conducted weekly by a nominated worker. "Having clean, ordered work areas and clear walkways are as important to safety as they are to efficiency. Through the audits, shortfalls can be fed back to workers regularly," said Wolfe.

 Far from being seen as dictatorial, staff see the new schedule and audit system as a way of making sure their efforts in the 5S Blitz do not go to waste. "The beauty of a team-based improvement activity is that it sells the ideas directly to those who will be implementing them on a day-to-day basis. As they move through the 5S Blitz, operators realise what they are doing will make their work environment more pleasant, and their jobs easier, quicker and safer. Then they become champions," said Wolfe.

Champions are what Monodelphous needs to be able to roll out 5S Housekeeping throughout the workshop. Since the initial 5S Blitz in the machining area, a second Blitz has been successfully conducted in the stores areas. Over the coming months, the main area of the workshop will be divided into four sections for subsequent attention. If they want to sustain their efforts over the long-term, Monadelphous must foster a 5S culture.

"QMI Solutions helped us engage our workforce as willing advocates of 5S. They have been endlessly enthusiastic about sharing new information and their vast experience," said Wolfe. "We have a second Manufacturing Microscope scheduled and look forward to the improvements we are able to demonstrate over the next few months."

For more information or advice, please contact:
Consultant: Pat Connor
Email: info@qmisolutions.com.au