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Going Lean means asking: Is this something that the customer would for pay for?

On a rain-soaked spring day in Toronto, deep inside a sprawling production plant on the eastern side of the city, Celestica employees Rob Atkinson and Terry Wastesicoot are in the middle of a week-long "Kaizen blitz" that will see them dramatically streamline the work processes they perform each day.

Kaizen is a Japanese word meaning "change for the good" and Celestica employees regularly participate in these blitzes, intensely detailed work-activity appraisals that identify and eliminate every unnecessary task or step in every workflow.

At the moment, on the Celestica shop floor, the two men in white lab coats are executing their new workstation floor plan, relocating each bench and piece of equipment to create a more compact, space-saving layout.

Saving even one, two or three steps on a single routine task that is repeated within every hour of every day on every shift can add up to tangible savings in product delivery time and overall efficiency for those assembling products here for a global aerospace customer.

"We're trying some ideas to see exactly what needs to go where to save us time wherever we can," says Atkinson, a cell engineer, pointing to strips of yellow tape crisscrossing the floor of his work area. "Ultimately, we will end up with a setup that is even more compact and flexible than what we have now. And that will make a difference in terms of how well we can deliver on the work we are doing for our customers."

In another corner of the plant, more lab coat-clad engineers that build products for a global giant in the communications hardware industry gather in the "Kaizen Room." Huddled in a room plastered with makeshift charts and handwritten lists, they are in an important debriefing session focusing on the developments and key learnings from the most recent changeover that day.

Their goal? To cut changeover time by 77% - meaning they will give themselves less than a quarter of the time they now are using to alter the production line setup.

This sounds like a huge challenge - until someone notes that three years ago, this same changeover job was taking significantly longer to complete.

"There is no doubt among this group that the challenge will be met," comments team leader Sebastian Enachescu, noting that by keeping each team member fully engaged with tasks during every changeover, and by bringing tools and workstations even closer to the line, precious minutes will be carved off of the workflow to meet the new benchmark.

In the meeting room, a message scrawled across a white board in green marker says it all: "Make uniqueness obvious."

"Lean is something we can't live without," says Celestica CEO Steve Delaney. The reasons for that are simple: Lean is delivering huge value for Celestica and its customers by improving product quality, accelerating response to customer demands, increasing employee safety and morale, lowering costs and reducing both capital investment and inventory.

The company's goal is to be the undisputed leader of Lean manufacturing in the EMS industry. This is an overview of what we are doing in our pursuit of a Lean culture, with some metrics that illustrate how Lean is working.

The Lean Culture

Lean manufacturing is, at its essence, a business system that enlists the efforts of everyone in an endless pursuit to eliminate waste from every process undertaken.

The philosophy of Lean is to do more with less - less human effort, less equipment, less space, less inventory, less materials, less time. Anything that does not add pure value is waste. While the Lean approach began in Celestica's manufacturing operations, it is not exclusively a production philosophy. The company thinks of Lean as a key element of its corporate culture, so that Lean thinking and concepts can be applied across the entire organization to improve quality and efficiency.

Doug Howardell, an independent consultant specializing in materials management and processes improvement, summed it up on the Lean Enterprise Institute Website (lean.org). "Companies are a collection of people voluntarily banding together to produce a product or service," Howardell notes. "In order to have a Lean enterprise, you have to have Lean people. And the people have to get Lean before the company can get Lean. People - thinking and acting Lean - make a Lean company."

Everyone in Celestica - from CEO to machine operator - is involved in making Lean work. The amount of change that is required for success cannot be achieved by just a few people.

It is the employees who make our Lean world unfold, and they do this based on three underlying principles:

• Everything we do should focus on customer value.

• Everything can and should be improved.

• All waste must be identified and eliminated.

An essential first step is to develop "eyes for waste." We look around at what we are doing and ask: Is this something that the customer would be willing for pay for? Does this activity add any value to the product or service? If the answer is "no," then we have identified waste - and the ongoing process to improve workflow and eliminate waste takes another step forward.

An important Lean principle is that all waste must be identified and eliminated. That means looking everywhere for improvements. As the Japanese saying goes, "A journey of a thousand miles begins with one step," and that applies nicely to our Lean philosophy.

We look at Lean as a structure - think of a house, for example - in which the roof of our house represents our business goals and plans to achieve them. That roof is supported by pillars that represent Lean in action.

The first pillar of the Lean house consists of JIT, or Just in Time - the principle that the right products should always be delivered to the customer in the right quantity at the right time. This requires a precise combination of production pace and continuous flow using an approach in which production is "pulled" by exact customer demand, rather than by imprecise forecasts. The second pillar of the house is Jidoka, meaning we build quality into each and every process step, making zero defects possible. At the foundation, beneath these pillars, are predictable work processes that can produce the same product every time for each customer.

Customer Benefits

What are the benefits to the customer? Consider two examples: our plants in Miyagi, Japan, and Johor Bahru, Malaysia.

Lean principles can achieve greater simplicity and enhance customer service - ultimately improving customers' bottom lines. The transformation of these facilities illustrates what we are working so hard to accomplish across our entire organization.

In Miyagi, the Lean initiative has, since the beginning of 2005, achieved a 250% improvement in overall plant efficiency. And a significantly higher target is set for year-end.

The Miyagi site, which manufactures products for a global telecommunications customer, has introduced dramatic improvements in product quality, cost and delivery, and efforts there continue to improve profitability and reduce inventory for the customer.

In Johor Bahru, which manufactures products for a global aerospace company, the goal for 2005 was to reduce delivery times and product on backorder due to long lead times. Some key performance indicators reveal how comprehensive the Lean program has been:

• SMT changeover time has dropped by 88%.

• Lead time has improved by 30% as the team works toward an even more aggressive lead time target and a 50% improvement overall.

Moreover, the customer ramped up its demands for the Johor Bahru facility during 2005 and the business is expected to increase again in 2006.

We are getting products to our customers more efficiently thanks to Lean. We are reducing inventory and scrap, and bringing work in process to more optimum levels. With the improvements in efficiency and operating performance, we are seeing greater customer loyalty and satisfaction. There is no question that Lean delivers business benefits to the manufacturer while adding tangible value to the bottom line for the customer.

Robert Hemmant is global lean architect at Celestica Inc. (celestica.com).