New Zealand’s largest stationery company recently consolidated its Auckland sites as part of a plan to incorporate lean manufacturing into its operation, building on a goal of continuous improvement
The Croxley brand, pads, stock envelopes, diaries, notebooks and journals comes from the John Dickinson Company in England, and takes its name from the town of Croxley. Since it opened its first New Zealand branch in 1920, the company has grown into the country’s major stationery manufacturer, undergoing numerous changes in ownership and mergers including brushes with the likes of Eric Watson and Graeme Hart. Nowadays, in Auckland, Croxley divides its Avondale site into three areas: envelopes, stationery products, raw materials warehouse and sales and marketing, employing 223 staff across the site, 150 on the manufacturing floor.
Tom Connor, manufacturing manager for the site and part of a senior management team that recently guided the company through step one of a five year plan to grow its business further, says, “The full basis for what we’ve done began as a review of our manufacturing operation 2 years ago. We went through a process of rationalisation in terms of our products. Croxley has always had a policy of looking at what was happening overseas, ensuring we could remain competitive or if we needed to make changes. The key thing was, ‘We see a future for manufacturing these products in New Zealand. We can see ourselves making this product competitively for a prolonged period of time.’”
Lean principles lead the way
Part of the plan saw the introduction of lean manufacturing principles into the company’s operation. Connor says, “We definitely see lean manufacturing as an integral part of our future. The concept of lean manufacturing is a difficult one to get over to the staff. You have to have trust and faith in what you’ve done and where you plan to be month by month. A big part of it is education. We needed a full re write of the discipline from the point of view that there is a right way to do it, and to be honest, that’s the only way. That’s been a key part of the lean manufacturing for us.”
Stuart Badland, production manager at Croxley, says, “If we look at the way we view the business, we focus on manufacturability, whilst giving the client exactly what they want. We want the best of both worlds. We must remain competitive and by fully understanding our manufacturing costs and always taking the view that we can do better, we will.”
Another part of the plan involved closing its Papakura operation and moving it to its Avondale plant. Connor says, “We did foresee a slow down. We could see things were going to be a tad difficult for the industry. The decision to close the Papakura plant was difficult given the number of very successful years of manufacturing at the site. We worked with our employees during a nine month transmission period and eventually transferred 20 employees to the Avondale site. The performance of that site during the closure period was nothing short of outstanding. I put this success down to good communication and the strong work ethic that existed at Papakura.”
Distribution centre drives performance
The opening of Croxley’s new distribution centre at Wiri allowed the space at Avondale to merge Papakura into Avondale, which the company completed during the Christmas shut-down period of 2008/2009. Badlands says, “The entire plant was relocated so that, when the staff showed up in January everything was ready to go in a seamless change. Customers had no out of stocks and there was no loss of productivity.”
At 170,000 square feet, the new distribution centre has 14,500 pallet locations. Connor says, “That has been a key driver in our performance over the last year and a half. It allows us to hold multiple products, 9,500 Sku’s. We deliver 98 per cent of products within 24 hours. Now, customers see the value in not holding stock and have us deliver the next day, 98 per cent of the time and improving, as we extend technology and improve our processes further.”
Croxley not only needed to bring its staff on board with lean manufacturing, it also needed its suppliers to help out. Badland says, “Our raw material suppliers have supported our lean manufacturing vision. Most products are just in time or on demand. An order comes in and we consume it. The system automatically places an order and the supplier delivers it the next day. In raw material holding, we’ve reduced by 20 per cent from what it used to be. It puts a lot of money back in.”
Connor says the lean thinking has cut down considerably on waste. He adds, “We designed the layout with that in mind. We designed the warehouse so we only have to move the material a minimum of distance. We also looked at avoidable and unavoidable waste and decided to target them both. If we could reduce our landfill, we knew we could also save money. We separate and bail all waste. For example, pure white cardboard, plastic, and metal are separated
for recycling.”
Realigning attitudes and ways of working
At the same time as the Papakura shift took place, Croxley realigned its thinking to suit its market demands. Connor says, “Where we had overcapacity, we made changes. For example, in one area we moved from two shifts to one shift. Since we started this process, we have made a 25 per cent efficiency gain on cost to produce. Our staff is very mobile and operates where the demand is, which can change daily.”
Over the last year, Croxley has worked on training 23 staff on lean manufacturing principles for an NZQA level three qualification, which it is now in the final stages. Connor says, “The government assists with 80 per cent funding. There’s a lot of passion in Croxley to be successful now. What we see now is one unit that operates the same principles and to the same level of passion.”
Since the introduction of lean manufacturing, Badlands has witnessed positive changes in staff members’ attitudes. He says, “There’s definitely a change in the employees. There’s a heightened awareness in their sense of order and disciplines. We see them working as one cohesive unit.”
Another area of success has come from the reduction in time lost due to injury. Connor says, “We’ve put in place an OSH manager, and a nurse and they work with the factory managers. ACC is part of the strategy as well, but I must give credit to Tony de Felice and his team for the reduction in lost time injuries. We have reduced lost time through injury by 60 percent over a period of one year. Often it’s been through early detection and intervention. For example, someone might say, ‘My arm is getting sore’ or ‘I wish we could do something about this.’ It comes down to listening to our employees then reacting to that.”
Badlands agrees. He adds, “Our bench mark is best in class. Whatever best in class is; that’s where we want to be and the challenge is there. What we now have is a committed staff with a lot of experience. The employees are hard working, flexible and supportive of the challenges we face.”
Connor concludes, “We are just about to embark on what I call phase two. We will continue to develop the gains we have made but our key driver for 2010 and beyond will be SMED, single minute exchange die. It’s all about reducing machine change times and converting this time into value add activities and to reduce WIP and improve planning cycle and operator flexibility. We will also be using the change time reduction gains to allow our skilled people time to develop new products and processes, ensuring we have a successful future.”
Lean thinking solves problems at Croxley Stationery
Croxley Stationery has an active engineering department to support its operations.
Tom Connor says, “The engineering group as part of their lean manufacturing development program wanted a system that would give them early detection of equipment failures and equipment at risk of failure. We also wanted something that would give us historical trends of failures, allowing us to intervene early, kind of preventative maintenance. We also needed something simple to operate. The engineers developed a green and red card system.
“The green card is raised by the machine operators when something, anything, is in need of repair or changing that would help the performance of the equipment or the surrounding process. This is agreed with the area supervisor and given to the maintenance manager. The machine operator raises the red card when we have equipment or process failure and the equipment is stopped. The supervisor signs this and takes it to the maintenance manager immediately.
“Given the size of the site it’s important that we have visibility across all areas and equipment in terms of breakdowns. This system gives us the opportunity real time to re-act in line with manufacturing priorities and the re-allocation of labour across the site. It gives the maintenance manager a clear assessment of workload, allowing them to react accordingly in consultation with the production group. That is, we agree on the priorities and we have no surprises. The logic is clear: the more green cards you raise, the less red cards end up being issued. You fix issues by early intervention and before they become a problem.”
