Treat Your Truck Staging and Turnarounds Like Pit Stops in a Race.

Want More Revenue and Profit? Treat Your Truck Staging
and Turnarounds Like Pit Stops in a Race.

Getting more efficient can yield more dollars with no extra costs.
By Scott Morrison.  Published in ProSales

If you watch any NASCAR or Formula One racing series, you probably know the difference between winning and losing a race often boils down to just a few seconds of lost time in a pit stop.

Earlier this year, Kyle Busch won the Toyota Owners 400 in Richmond, Va., and attributed his victory to his last two pit stops, which were the fastest two changes in the field. With 23 of the 38 drivers who started the race on the same last lap as Busch as he crossed the finish line, those precious few seconds gained in the pit gave him the edge.

When I visit lumberyards and watch delivery trucks arriving, stopping, unloading returns, getting the next order, loading/strapping, and then leaving the yard, I try to connect what I’m seeing to a NASCAR pit crew. Several questions arise:

• Does the driver know where to stop in the yard?
• Is the next load ready?
• Is there a convenient place for the driver to get the paperwork and the materials for the next delivery?
• Is there someone (or at least a forklift truck) available for helping load the next delivery?
• Is the next run plotted and the path clear for the driver to leave?

If any of the answers to the above is no, there’s an opportunity for improvement in truck turnaround time. It starts with taking a baseline measurement and then proceeding through three stages.

Most baseline measurements reveal that little time is taken to prepare the next load for delivery before the truck arrives, such as picking and staging materials and bringing the wrapped bunks to a loading area. These are called external activities, because they can be done before the truck arrives. Along with these, the baseline also seeks to measure internal activities—things that can be accomplished only while the truck is on-site, such as unloading returns, loading the next delivery, and strapping to secure the load.

In stage 1, the first step is to determine what external activities are occurring while the truck is on-site, and move them to either before the truck arrives or after the truck leaves. Often this doesn’t result in an overall time reduction, but the internal time drops by an amount that matches the time that’s been moved.

Next comes stage 2, when you should review the remaining internal activities and determine which of them can be converted to external activities. For example, accumulate materials for stops in a run and stage them in a single location before the truck arrives, rather than driving a forklift unit to several locations in the yard while the truck is on-site. Again, this doesn’t necessarily reduce the overall time between first item picked and last return put away, but it does, again, affect the internal time.

Finally comes stage 3, when, with the external and internal activities firmly distinguished and separated, you can focus on reducing the time taken to accomplish the activities. Examples include:

• Developing assigned loading boxes in the yard;
• Having a dedicated loader who is notified by the dispatcher 10 minutes before a truck arrives so he or she can inspect and prepare the materials for loading as soon as the truck stops at the designated location; and
• Having delivery paperwork at the truck for the driver to review upon arrival rather than having the driver walk to the dispatch office.

An LBM dealer now on this journey is Alexander Lumber, headquartered in Aurora, Ill. Alexander’s Chicago District has three lumberyards, with the largest yard located in Crystal Lake, Ill. In March, executive vice president Rick Vancil, district operations manager Mike Jamison, and Crystal Lake yard manager Bob Knowles conducted a baseline study. They determined it took about 50 minutes to turn around a 24-foot flatbed with a detachable fork truck, with the driver and loader going 0.47 miles per turn.

During stages 1 and 2, in March and early April, the team found that several external activities occurred while the truck was on-site, including completing and retrieving the next shipment’s packing slips, consolidating stops, preconfiguring the truck bed, and retrieving hardware. These activities were moved to before the truck arrived. Among the changes, the loader was assigned to gather paperwork from the dispatch office after receiving a message the truck was approximately 10 minutes away from arrival. In addition, the loading area was expanded and brought closer to the truck parking spot, and a pre-load box was created for assembling multistop runs. Protected/packaged hardware was brought to the loading area so it was in place when the truck arrived.

During stage 3, in mid- to late April, the team further improved the truck-turn process by designating a dedicated truck loader who became responsible for coordinating dispatch with the stagers and drivers, assigning trucks to stop at specific loading stations on arrival, and reconfiguring the steel banding and truck refueling workstation to be both closer to the loading area and more efficiently laid out to facilitate faster servicing.

The improvements were dramatic. The Crystal Lake yard’s turn times dropped to about 22 minutes (a 56% reduction), and distances traveled by the loader and driver fell to 0.12 miles (76% reduction). Over the course of a typical delivery day, with four runs and thus three turns per truck, these cuts in turn time result in an additional hour per truck of available delivery time over a straight-time eight-hour day. Each fork truck/delivery truck combination saved more than a mile.

Just like NASCAR over the years, in which pit stops have gradually fallen from an average of over 55 seconds in the 1950s to under 12 seconds today, following these three stages of improvement can get your trucks out of your yard faster, and put them where they earn money for your company: on the road.

Here Are Key Terms in Lean Management That You Need to Know

From ProSales. By Scott Morrison.

Many Lean terms come from Japan, where Lean started as the Toyota Production System around 1950. Here are some key definitions.

Lean: Eliminating sources of waste.

Muda: Japanese for waste, which has eight sources.

  • Overproduction: Producing more than is required.
  • Processing: Work that adds no value.
  • Motion: Unnecessary movement of people.
  • Delay: Idle time when you should be working.
  • Conveyance: Unnecessary transport.
  • Inventory: Excess materials.
  • Defects: Anything requiring correction.
  • Loss of creativity: Unengaged workers.

Core Elements of Lean

  • Visual management: Signage that allows understanding of what’s happening in a work area.
  • Single-piece flow: Executing a process in the same sequence every time.
  • Process smoothing: Every business process within the work area is completed within a set schedule.
  • Production smoothing: Making products within a set, repetitive schedule.
  • Error proofing (pokayoke): Devices that prevent errors prior to passing them along to your customer.
  • Versatile workers: Defining standard work, ensuring your workforce is cross-trained to perform all jobs.
  • Rapid turnarounds: Minimizing the time that any of your equipment or processes are idle between jobs.
  • 5S: A disciplined approach to organizing, cleaning, and maintaining all work areas, following a loop of Standardize, Sort, Set in Order, Shine, and Sustain.

Plan-Do-Check-Act (PDCA) Cycle: The problem-solving process, driven by developing and executing a plan, reviewing results, and adjusting plans.

To learn more, I suggest 2 Second Lean, by Paul Akers.

Lean 201, Part 1: How to Make Lean Management Principles Stick

From ProSales. By Scott Morrison.

Lean principles include keeping tools organized and in designated spaces so they’ll be easy to find every time.

SLAM! My junior year high school English teacher, on the first day of class, would walk into the classroom after slamming the door as hard as he could. His purpose was to galvanize our attention and eliminate all distractions.

This achieved, he began to teach critical thinking. His tool was to have us read a classic, split the premise of that book into two ways of thinking about the same observation, and then draw two different conclusions. He taught us how to hold differing, perhaps even contradictory, premises in our minds at the same time.

Where is this going? Welcome to Lean 201. SLAM!

Let’s Get Beyond the Basics
I assume you’ve heard about the basics of Lean management techniques. Lean tackles the systematic reduction of waste, and key Lean practices include disciplined housekeeping and organization, reducing truck turnaround time, and implementing single-piece flow in a door/millwork shop. (Need reminders? See this glossary for key terms.)

That’s Lean 101. I want to discuss what to do after the basics are implemented, and this brings us back to my teacher’s lessons.

Here’s the key: In order for Lean to flourish, ownership and management must allow contradictory concepts to co-exist. You need to balance top-down, command and control management with bottom-up, employee-driven change, pushing decision-making responsibility and authority to the lowest organizational level.

This approach attacks what may be the worst waste of all: loss of creativity. Anyone in a position of authority (perhaps most of all, ownership) should routinely approach everyone in the organization and ask, “How can we make your job better?”

This doesn’t mean the owner/manager is abdicating authority and responsibility. There’s still a top-down element required. Your challenge is to get your workforce to embrace what you want them to do: continually improve their performance.

Brian Utter, yard foreman at Curtis Lumber, Delhi, N.Y.

Start from the Bottom and Walk Around
How do you use your top-down energy to inculcate bottom-up thinking? Spend time—a lot of time at first—informally going to the workstations (please don’t drag anyone into a conference room!), and talking to your workers. Why? Because they perform that job day after day, and they are a lot smarter than you may think.

They know where problems happen and have ideas on how improvements can be made. But if no one asks them, unless they are not bashful you won’t get their input. Many won’t volunteer what they know, not every suggestion will be a good one, and many won’t be feasible. Ask anyway!

They could see opportunities for improving tools, such as your software. They’ll see friction any time two or more groups are involved in the same process. Many times, information between groups doesn’t flow as freely as bosses assume. And they’ll spot communication errors occurring between levels of management.

These problems can be costly. Consider if an incorrect stock SKU is recorded on an order. Should that error get all the way to the jobsite, it leads to a dissatisfied customer, a delivery truck making a second or third trip, and sales staff and/or ownership having to repair customer relations.

What can be done to counteract the loss of creativity? Pickers, stagers, loaders, and drivers should be taught about product features and purposes, then encouraged to ask if an order doesn’t make sense.

Take a daily walk somewhere in your store, yard, and/or production area(s). Talk to whoever is working in that area. Ask them what they’re doing, what works well, and what doesn’t work well. Act on what they tell you, and ask them to be involved as much as possible.

Have a five to 10-minute daily stand-up meeting covering issues everyone needs to know about, such as watching for a certain delivery or a salesperson bringing a new customer on a tour. Most important, talk through ideas and improvements. If you don’t want to plunge into daily meetings, start by meeting weekly.

Give private positive feedback immediately upon hearing of or seeing a “good deed,” such as turning around a complicated special order with an on-time and in-full delivery. This reinforces what happened and encourages repeat performances. Follow up occasionally with public acknowledgement of good work that occurs “behind the scenes.”

When you hear of or see a negative event—something that adversely impacts customer relations, safety, or teamwork—privately interview the person(s) involved to find out the circumstances, ask how the situation could have been handled better, and then mutually determine a corrective action to minimize recurrence.

Curtis Lumber promotes accountability at all levels of its staff, including team member William Cash.

Reinforcing Continuous Improvement

Let’s put this concept into practice. At The Building Center of Gloucester, Mass., if someone needed a screwdriver for store use, that person would just go to the hand tools aisle and take one.

“We had six screwdrivers spread around the store when we only needed one,” CFO Tim Huff says. Huff made people stop and think about that, and by doing so he set the table for how he and the management team implemented culture change.

“Find the people who get it and work with them, and allow the people who don’t to be influenced by those who do,” Huff says. “Identify the people who see the value in 5S/Lean as your champions. Managers need to lead by doing, especially at first, not delegating.
“Investing in the employees to work with you is like generating compound interest, but it’s with time, not money,” Huff adds. “With 5S/Lean, you’re investing your time on the right things. Patience is very important! … You’ll really improve your bottom line if you’re focusing on long-term efficiency gains.”

Jim Sobeck, CEO of New South Construction Supply in Greenville, S.C., and author of The Real Business 101: Lessons from the Trenches, states, “You can’t just work smart or hard; to be really successful, you have to work both smart and hard.”

Lean 201, Part 2: How Curtis Lumber Embraced Lean Principles to Boost Its Operations

From ProSales. By Scott Morrison.

Lean principles include keeping tools organized and in designated spaces so they’ll be easy to find every time.

In part 1 of this series, I said making Lean principles stick requires you to promote two seemingly contradictory ideas at the same time: Promoting ideas and responsibility-taking from below while imposing principles and standards from above. Now let’s look at an example.

When working with clients to assemble a kaizen (continuous improvement) team that has been charged with identifying the root causes of a problem, I urge the client to pick people who know the current process but, more importantly, work hard within the process and want to improve it. A yard layout optimization project I did with Curtis Lumber in Plattsburgh, N.Y., illustrates the point.

One key team member was John Lavalley, the yard foreman. Lavalley has worked in the yard for 25-plus years. With some training and coaching, and by going on several walks through the yard, I got Lavalley’s critical input on what prevented trucks from getting out of the yards in a timely manner in the morning and then achieving fast turnarounds during the day.

I worked with Lavalley and the team to couple this information with Lean analytical tools like visual management (clear and precise labeling of inventory, traffic lanes, and storage locations), minimizing waste (placing supplies at point of use based on frequency and volume of usage), and single-piece flow/process smoothing (assigning specific zones for stagers and trucks). By relocating the highest frequency/volume materials and using a centrally located paved apron as the staging/loading area with dedicated zones for trucks, we reduced overall travel distances by 25%.

The Importance of Teamwork
Sometimes the first pass at beginning the 5S/Lean journey stalls. This can occur because the two sides aren’t aligned: Management pushes without confident receipt by the workforce, or the workforce gives 5S/Lean a start without bosses recognizing and reinforcing early effort.

You get improvement from teamwork, then you get improvement from individual effort, then you get improvement from teamwork … and so it continues.

Lean thinking revolves around a Plan-Do-Check-Act cycle. Here, Lindsay LaRuffa, director of sales and operations for the central division at Curtis Lumber, confers with Bill Cairns, manager of Curtis’ facility in Delhi, N.Y.

At Curtis Lumber’s yard in Delhi, N.Y., Site Manager Bill Cairns and his staff have three corporate-driven Key Results to deliver: sales growth, profitability, and be the local employer of choice.

Curtis’ executive team created an environment for each of their locations to excel by establishing a set of personal accountability principles based on The Oz Principle: Getting Results Through Individual and Organizational Accountability. Everyone at Delhi is expected to look at each problem/issue from the perspective of “See It” (recognize a problem exists), “Own It” (take responsibility to determine the root cause of the problem), “Solve It” (formulate an appropriate corrective action), and “Do It” (take that corrective action).

Liz Irish, vice president of information systems, emphasizes, “We’re not focused on personal accountability to just drive change. We are focused on personal accountability to empower our employees to help us as an organization move to the next level via continuous improvement and, most importantly, drive and achieve our Key Results.”

These principles are a perfect fit with 5S/Lean. Lindsay LaRuffa, director of sales and operations for Curtis’ central division, says Yard Foreman Brian Utter and his team “really embraced the program, and what I see the most is that they have picked up the teamwork and ownership, but also creativity. Utter and Cairns have empowered the workers to take responsibility for improvement, and now every visit they challenge me to determine what’s new and what’s changed.”

Accountability chart at Curtis Lumber in Delhi, NY

Within the store, William Cash, senior counter salesperson, took over the daily improvements, allowing Cairns to go on the road extensively and focus on the Key Result of sales growth.

As the cultural change began, emphasizing the positive results and the people who drove those results convinced others to get on board. LaRuffa says others who were negative at first now embrace the change. Irish adds: “Employees are no longer settling for status quo; they jump in, take initiative, and assist in driving positive organizational change.”

Lean 201, Part 3: Using Lean Principles to Make Big Changes.

From ProSales. By Scott Morrison.

An old mascot greets visitors to Mathew Hall Lumber in St. Cloud, Minn.

While part 1 of this series discussed the seemingly contradictory notion behind making Lean principles stick, part 2 explored how Curtis Lumber in New York State was able to implement those ideas to improve its performance. This part of the series looks at another Lean case study.

Lean’s mantra is “continuous improvement,” but it’s not enough! Many times, the inertia of inactivity can be shaken only by something so new and different that it forces you to make a major change, followed by another change. Think of it as plate tectonics: There are the frequent rumbles along a fault line, and then every few hundred years comes The Big One.

Mathew Hall Lumber’s Distribution Center in St. Joseph, Minn., was built in 1978, and in 2014 it was laid out almost exactly the same as opening day. Loran Hall, president/CEO and fourth-generation co-owner with brothers John and Dan, wanted to improve operations. This is another yard optimization project, but the Halls took a different path.

The breakthrough didn’t come in the initial change. In that round, we moved framing and pressure-treated stock, re-organized picking and staging routes, and reduced the stock/staging zone by 50%.

Thoughts of paving the stock area were entertained, but the owners decided instead to add gravel and re-grade the surfaces. Considering virtually nothing had been done to improve the layout for 35-plus years, it was big, but traffic patterns had not significantly changed.

The First Wave
Then co-owner Dan Hall and yard supervisor Neil Schneider went further. All stock locations were moved again to a reorganized pair of sheds on pavement. The gravel area is now used only for staged loads, cutting 50% of space utilized and avoiding paving over any gravel. The result: An original 100,000 square feet dedicated to stock storage is now down to 22,500 square feet (that’s almost 80%), with no reduction in the number of SKUs.

“It all started with knowing we had to change,” Loran Hall says. “First I hired Casey Mason to get us collecting operations data to look into our processes. Then I had to fight for a year with the management team to accept culture change.

Lean principles include keeping tools organized and in designated spaces so they’ll be easy to find every time.

“The pushback from them was that the change wouldn’t work because ‘we do it a certain way.’ Then a couple of the managers who were so overwhelmed and unprepared for change bought into it … and from that point 5S/Lean worked. We made it through, but we had to quit doing it the way we always did it. We’re taking the grill out tomorrow to thank everyone.”

Loran, Dan, and John Hall put in place the attitude, invested in education/training, and set aside time for managers to roll out 5S/Lean. “Lean is about getting the buy-in from the employee,” truss plant General Manager Calvin Fischer says. “The only way to do that is to encourage and recognize them when they have a good idea. The first idea may not be the final idea, but it is the start to improving flow within the facility.

Let ’em Run
“You cannot force an idea on a person,” Fischer adds. “The best thing to do is give them some things to try and let them run with it. You will be amazed with what they come up with. If you force it on them, they will shut down and your chances of success will dwindle.”

For example: In Mathew Hall’s truss plant, there’s a rope to open a garage door on the left side of the path where employees push their carts. “Most people are right-handed, so every time we had to open the door we would have to stop the cart full of lumber, and then go and pull on the string, come back to the car and push it out,” Fischer says. “One of the sawyers, Dalen Kittelson, came up to me and asked, ‘Why don’t we have a pull rope on the right side as well?’ So, we added a rope. Now, no matter if you are right-handed or left-handed, you do not have to stop … you never have any down time in the process of pushing a cart.”

Lean 201, Part 4: Four Obstacles to Crossing the Finish Line

From ProSales. By Scott Morrison.

Lean principles include keeping tools organized and in designated spaces so they’ll be easy to find every time.

Let’s recap: Part 1 of this series introduced key concepts for making Lean principles stick. Part 2 went to Curtis Lumber in New York State and showed how embracing Lean ideas boosted its performance. Then in part 3 we visited Mathew Hall Lumber to see how it handled “The Big One.” We also served up a glossary of key terms.

Now let’s turn to some uncomfortable truths that could hinder your 5S/Lean journey.

Expect Turnover
You must determine who needs to go in order to get 5S/Lean into the culture. That person who has been “indispensable” forever because he or she has a special skill? If that person isn’t on the bus, they have to go. All the bosses quoted here have made significant, and painful, changes in their teams in order to get 5S/Lean to move forward.

Invest in Training and Pilot Projects
You must spend time getting your workforce up to speed, testing changes, and revising processes; celebrate wins and move on after failure. 5S/Lean won’t work if you’re just giving it lip service. In that case, people won’t buy in.

Walk the Work Areas Daily
See what’s working and where to spend your time/effort facilitating improvement. This is not a mail-it-in step.

Investment May be Required
Remodeling an old building or erecting a new facility without a connection to the PDCA Cycle will not solve your problems. Fix the problems on paper and in pilot programs first to see if your changes can work; implement those changes with minimal investment, and monitor for performance improvement. Then approach how to invest capital to support that growth.

The true work of 5S/Lean is facilitating continuous cultural change. And that’s when you’ve graduated from Lean 101 to Lean 201. SLAM! Class dismissed.

For the Love of a Business

From the Central Penn Business Journal.

Barbara Costik, left, administrator at Middletown Lumber, jokes with Pat Carney, who runs the company’s woodworking shop

Barbara Costik grew up with Middletown Lumber Co., a business that has been in her family since her late father, Edward, bought it in 1955. She’s not about to let it down.

During the 2008 recession, which fell particularly hard on construction-related companies, the team at Middletown Lumber tightened expenses, shopped around for insurance, added new products and kept a close watch on overtime. They also had to lay off a delivery driver.

These days, they are looking for a formula that will boost sales and ensure the company’s future. That search has led Middletown Lumber to reach out more aggressively to potential customers while sticking to the niche it knows best, wood, and remaining open to other business possibilities.

“I think we do have a lot to offer, and I want to share that with people,” said Costik, who serves as the company’s administrator.

Her mother, Jeannie Zelda Costik, known affectionately as Jay Z, is the owner. Her older brother, Eddie, worked in the business, but retired in 2011, leaving something of a hole.

“He was the spokesperson,” Barbara Costik said.

Success won’t come easy. Big-box chain stores dominate the building materials industry, selling to both contractors and handy homeowners, the same customers served by Middletown Lumber. Amazon and other online retailers also take a growing share of business.

Family-owned lumberyards, meanwhile, have become a rare breed. And there is no guarantee of survival, no matter how deep their roots. Nearly two years ago, the family-owned Eberly Lumber Co. in Mechanicsburg shut down after 155 years in business.

Costik and her colleagues are confident there is enough business out there for Middletown Lumber, which does between $1.5 million and $2 million in annual sales. But they aren’t waiting for it to walk through the door.

Over the last year, they have been seeking it out, combing through lists of customers they haven’t heard from in a while and reaching out to win them back. They also are dialing up new contractors whose online reviews catch their attention.

Middletown Lumber is especially interested in small remodeling businesses that can appreciate the higher-grade wood products sold by the company, said Chris Nagle, Middletown Lumber’s manager.

“I think that’s where our future is,” said Nagle, who has worked at Middletown Lumber since 1994 after being laid off from Hechinger’s.

Nagle spends a portion of his time on the road visiting contractors and rekindling relationships. “These guys don’t have time to come here,” he said.

It is a formula that has worked for other family-owned lumber yards, said Scott Morrison, a New Hampshire-based consultant in the lumber and building materials industry. His clients are primarily family-owned companies, and they are in an expansionary mood following the retrenchment of the recession.

But growth takes work. “You can’t sit back. You’ve got to get people pounding the pavement and making the phone calls,” Morrison said.

It makes sense to start with contractors who have been customers in the past, he added. But it also is vital to ensure product quality and customer service remain strong.

“This is a very high-touch industry,” Morrison said. “You’ve got to work extremely hard to earn the client and earn their business and then to maintain it.”

Knowing the job

Chris Nagle, top right, is manager at Middletown Lumber. Clockwise from bottom right: Hardwood samples on display at the company; the warehouse office; exotic woods, including leopardwood and purpleheart wood. – (Joel Berg)

It’s not the kind of warning that would seem to put off the seven-person crew at Middletown Lumber. When I visited one morning in January, they left little doubt about their willingness to go the extra mile for customers.

“Everybody knows their job and does it well,” Nagle said.

Their operation, a block off the main drag in downtown Middletown, consists of four basic parts.

There is a retail storefront, where customers can find displays of hardwood flooring and contractor-quality, German-made Festool power tools, among other items.

Along one wall are planks of more exotic woods, including leopardwood and purpleheart wood, which is truly purple. Costik said she is considering adding an antiques section to the sales floor.

Behind the retail front are sheds stocked with two-by-fours, plywood sheets and other materials. Across the street is the warehouse, laid out so that delivery trucks can pull in one door, load up, and then pull out another.

In a separate building sits the company’s woodworking shop, overseen by Pat Carney, who takes pride in tackling the many challenges that customers throw at him. They have included requests to make replacement table leafs and fireplace mantles.

About 60 percent of customers these days are do-it-yourself homeowners, Nagle said. They select the wood and Middletown Lumber cuts it to requested dimensions – using equipment that is decades old but lovingly maintained.

Most customers are within driving distance, but many come from farther afield thanks to the internet, Costik and Nagle said. Middletown Lumber is known for its cedar products, and has gotten calls from as far away as California from people Googling the term.

For the last 20 years, the company also has delivered wood to Connecticut-based World Wrestling Entertainment, which uses the limber to make support structures for wrestling rings. The work came courtesy of a WWE employee who lived in Middletown, Nagle said.

Business also comes from contractors who occasionally descend to do work on the nuclear power plant at nearby Three Mile Island, Nagle said. The contractors call for supplies and Middletown Lumber tracks down the goods, even if the company doesn’t carry them itself.

The challenge, of course, is to keep the phone ringing. Nagle acknowledges that he still often talks to people locally who have never heard of Middletown Lumber.

But it is a situation Costik, Nagle and their colleagues are working to change – not because they want to be the biggest business on the block, but because they love the business they have made their own.

“It’s my family legacy,” Costik said, “and I want to see it succeed.”

How and Why to Improve Your Business Using Lean Principles

From ProSales Magazine.

The LBM industry has been slower than some others to embrace a lean culture. Here’s why Scott Morrison says that should change, and how to make it happen.

The last three winners of the ProSales Dealer of the Year (Jackson Lumber and Millwork, 2014; US LBM, 2015; and Franklin Building Supply, 2016) all were cited, among many attributes of operational excellence, for their emphasis on implementing lean principles.

Although the LBM industry has been a little slower than other industries in embracing lean, these last three winners indicate that lean has finally grabbed a toehold in the industry. If you are a dealer president, owner, or operations executive, and you want to begin your own lean journey, how should you start?

Definition of Lean

To begin the journey, you need to understand what lean is: the systematic elimination of waste in all of your processes. Processes may be product-related (such as the distribution of products by your truck fleet, or the production of doors, window frames, trusses, and millwork), or they may be service-related (invoicing, sales order entry, purchasing). There are up to eight types of waste evident in any process, all of which lose time and therefore increase your costs.

  1. Inefficient motion: Taking extra steps to complete a task, such as walking over to a bench several times per day to get a tool that should be stationed within the immediate work area.
  2. Overproduction: Manufacturing items or processing services in large batches not in tune with the most immediate needs of your customers.
  3. Over-processing: Adding extra, unnecessary process steps, such as double-handling of a sales order or reworking a door or truss before shipment.
  4. Defects/Errors: Any product or service item that the customer cannot or will not use, requiring rework or a credit against an account.
  5. Waiting: Delays in the processing of products or services, causing your resources to sit idle.
  6. Incorrect inventory: Having too much or too little stock on hand, causing a cash flow crunch or delays in shipments.
  7. Inefficient transportation: Moving products more times than necessary to process them through your production facility or your yard.
  8. Loss of creativity: Not tapping into the knowledge and skill set of your employees to help you identify and solve productivity, efficiency, and quality problems.

Setting the Culture for Lean

The word “journey” is chosen on purpose—because although you will arrive at lean milestones, you never stop. Lean is highly dependent on continuous improvement of your products and services. Whenever you reach a goal, you set a new one and work hard (many times even harder) to achieve it. From a company culture standpoint, there is both a top-down and a bottom-up commitment necessary to successfully embark on the journey.

First, dealer ownership needs to foster the environment to let everyone in the organization participate in lean. Second, but just as important, the dealer’s employees need to drive improvement through the use of a variety of lean tools.

If a dealer’s ownership doesn’t encourage employees to try changes, fail many times, and keep trying until a breakthrough is achieved, lean won’t work. On the other hand, if the dealer’s employees don’t freely provide feedback to management, lean won’t work. You really need both sides to cooperate.

The Lean Toolbox

As part of its lean efforts, Jackson Lumber & Millwork has improved tool organization in its door shop and established clear tasks for different stations.

Once you’ve identified the sources of waste, there are a variety of tools that can be used to eliminate waste and improve the processes. Most of the time it takes a combination of tools to adequately address the problem; the key is to observe and collect information before prescribing solutions. The most common lean tools are easy to understand and can be implemented with a concentrated effort:

  • 5S (sort, stabilize, shine, standardize, sustain): A disciplined approach to daily/weekly cleaning and housekeeping that involves all layers and all locations of an organization.
  • Visual Management: Organizing work areas so that everything is easy to see, easy to find, and any out-of-place items are easy to identify.
  • Single-Piece Flow: Reducing batch-processing as much as possible, with the ultimate goal of handling only one product or one service function at a time.
  • Production Smoothing: Minimizing lead time for all product lines and services by carefully balancing sales, purchasing, and production requirements.
  • Set-up Time Reduction: Reducing downtime between production jobs, between truck deliveries, and, if office staff has multiple responsibilities, between office functions.
  • Error-Proofing: Developing methods of identifying and preventing errors from occurring in your process.
  • Versatile Operators: Cross-training all employees to do a variety of job functions in order to balance work schedules and handle surges by redeployment.

Success Stories

In my experiences with LBM dealers, no two dealers have been alike on their journey. The journey for Jackson Lumber and Millwork began in 2005 in the interior door shop in Raymond, N.H. The initial focus was lead time reduction for interior doors, a process that dropped to three days from two weeks. Soon afterward, 5S and visual management strategies were rolled out to the door shop and eventually to the three lumber yards. All operators in the door shop have at least two sets of production duties (versatile operators), which allows for changing assignments at mid-day if necessary to meet all customer shipments for that day.

Jackson Lumber vice president Joe Torrisi has the perfect attitude for implementing lean: Be relentless in the elimination of waste. “To be successful with a lean initiative, ownership and management need to be actively involved with the process,” he says. “Lead by example, and let everyone in the organization know this is not a passing whim. This is the new way of running our business.”

Franklin Building Supply has been on its lean journey for several years, focusing on 5S, which it categorizes as “spring cleaning every day” (sort); “a place for everything, and everything in its place” (stabilize); “cleaning every day” (shine); “clarity” (standardize); and “employee involvement” (sustain).

Franklin Building Supply relies on kanban cards to help manage its inventory efficiently.

Another program in place at FBS is a Kanban card system; a sample is shown to the left. Kanban cards are small, laminated cards containing information about the stocked product (name/description, part number/SKU, and order quantity). These cards are placed toward the bottom of pallets of product, which indicate to yard personnel that the stock is almost depleted, triggering a reorder (or “pull”) for a new order of replacement stock.

“To be successful, lean must involve employees at all levels in a fundamental way,” says Rick Lierz, president of Franklin Building Supply. “Our goal is to be a company filled with problem solvers, and the first three S’s are easy to get people involved in the daily journey.” Lierz continues, “Kanban cards have helped us reduce inventory in some areas by introducing a visual tool that is easy to operate.”

Other dealers that have taken significant first steps on the lean journey include Tague Lumber (Philadelphia) implementing 5S and production smoothing in its door and millwork shops; the distribution centers of Mathew Hall Lumber (St. Cloud, Minn.) and Shepley Wood Products (Hyannis, Mass.) optimizing layout and product flow (truck turnaround time reduction); and 5S and visual management rollouts in the Northern Division of Curtis Lumber (Plattsburgh and Ray Brook, N.Y., and Burlington-Williston, Vt.), in McCray Lumber and Millwork’s interior and exterior door shops (Kansas City, Kan.), and at the lumberyard of The Building Center of Essex (Mass.).

For dealers who haven’t yet taken that first step on the lean journey, what are you waiting for? Get started!

Shepley Wood Products Improves Yard Productivity by 30%

Lean principles can be applied to improving lumber yard productivity by significantly reducing fork truck travel time for staging delivery loads…Shepley Wood Products - QuikBoards Customer

Shepley Wood Products was founded in 1978 by Tony Shepley and is headquartered in Hyannis, MA.  Shepley serves all of Cape Cod and the island of Nantucket with daily deliveries of lumber and building materials to the professional builder industry.  They also have a number of loyal customers who frequently visit the yard to pick up small quantities of materials.

The challenge facing Tony’s team was to improve the productivity of the fork truck drivers to quickly and accurately pick and stage deliveries, while safely improving the flow of drive-through visitor traffic.  I facilitated the project and started by training the team in the principles of lean, primarily in identifying and eliminating sources of wasted time, space, and travel.

All of the major product families that are stored in the yard and warehouses were mapped and measured by physical distance from the center of the truck loading area.Shepley Wood Products - QuikBoards Customer - Aerial View

Each product family was weighted in importance by the frequency in which those products are picked for shipment.  The goal of the team was to reorganize the yard layout so the most-frequent product families were located closest to the center of the truck loading area.  This way, fork truck drivers were moving high-volume products over much shorter distances, saving time and travel costs.Shepley Wood Products - QuikBoards Customer - Custom Work

When combining volume and distance, the layout showed which product families were the best candidates for movement.

In this layout, it was desirable to move the GREEN areas closer to the center of the loading area, while moving the RED areas farther away.  To enhance the drive-through customer experience, we also outlined the parameters for an automated racking and storage system, which was designed by Krauter Auto-Stak engineer Mark Ritz.Shepley Wood Products - QuikBoards Customer - Custom Work - Consulting
The Auto-Stak was constructed between the millwork warehouse and the lumber warehouse, immediately across the main driveway from the delivery truck loading area.  The racks were filled with open single-unit pallets of all of the major lumber dimensions, plus decking, trim, and finer-quality wood pieces.Shepley Wood Products - QuikBoards Customer - Drive-Through 

Now drive-through customers can move up and down the aisles around the Auto-Stak and then through the Lumber Warehouse to pick their items without interfering with staging and loading operations across the main driveway.

Other relocations included the engineered wood (up to 60-ft in length) moving to a long, wide zone where full lengths plus custom-cut lengths could be stored together, all hardware moved to a shed at the head of the Auto-Stak (toward the truck loading area), and large-volume storage of roofing shingles consolidated to one area.  Finally, an off-site warehouse was closed with all overstock items moving to storage locations in the yard, primarily in the Lumber Warehouse.  The Lumber Warehouse gained space by installing a smaller Auto-Stak, which rotated 4’ x 8’ plywood and other building material sheets to conserve width plus allow stacking of open pallets.Shepley Wood Products - QuikBoards Customer - Lean - Savings

What were the overall savings?  With the re-layout of the yard plus installation of the two Auto-Stak systems, distance traveled for the major product families was reduced by 30% (nearly 3,000 miles of collective fork truck driving per year).  The other main benefit was the improvement in safety for drive-through customers, who no longer needed to drive their vehicles through the same aisles as fork trucks staging deliveries.

Want to learn more? Check out the following video that captures all of the details of the project, including a walking tour of the Auto-Stak and affiliated storage locations.

A longer YouTube video can viewed by following the link.