Huwebes, Setyembre 2, 2010

Driving Sustained Improvement - Jolito Ortizo Padilla explains How 5S Brought Award-Winning Change to Colliers Nissan-A Case Analysis...

Colliers Motor Group was founded in 1926 by Richard Collier, with an Austin franchised dealership in South Yardley, Birmingham. During the 1990s the group expanded to seven sites, all within the Midlands area. The Midlands-based company is still privately owned currently by the chairman Alan Clarke, it has a turnover of 40million Sterling Pounds and employ nearly 300 staffs. The franchise currently held are: Nissan, Fiat, Seat, Jaguar, Mazda, Land Rover, Chevrolet, Honda and Peugeot.

In 2008, the business decided to address a specific problem involving Colliers, Nissan in Acocks Green, Birmingham. The Nissan dealership site was about to undergo a major showroom refurbishment as part of the business development. The company wanted to examine this future activity and establish:
- How it would impact on what was already a profitable dealership.
- The potential secondary effect on the rest of the business-specifically parts
and service.
- How change might affect the service provided to the customer.
We also wanted to increase workshop efficiency and the after sales department's profitability. Added to this, the service department lead-time was growing and we needed to use the available facilities to grow the capacity.

The Nissan Service Way

We enlisted the help of Nissan Service Way initiative. This initiative began in 2006 and over 100 dealers participated including the Philippines. It is being implemented on behalf of Nissan by lean experts from Renault- Nissan Consulting using training and on site coaching techniques.

The Nissan service way program was established to take Nissan acknowledged expertise within lean manufacturing and apply those principles to the dealer workshop environment. Extensive research in a number of Nissan dealerships identified that there were significant opportunities for efficiency improvements in both servicing and repair, and in the customer handling process. Detailed "time and motion" studies were carried out plotting the "walkpaths" of staff involved in the whole process, and identifying improvements to both physical layout and working practices. To optimize practical benefit the dealer is required to make changes to the typical workbay to facilitate use of factory style "standard operations."

The initial review at Colliers identified problems around the service reception area, which was located within the showroom environment. This included the lines communication that extended between the after sales area of the business and the sales department. We then looked at the sales delivery proces and how we carried out our daily tasks to understand how effectively that current process interacted with the relevant departments that were involve.

We decided to focus on the work instruction for pre-delivery inspection of new cars before handover to the customer. This needed to be clear, the relevant resources had to be available, such as technicians and vehicle was ready for delivery by the agreed customer deadline.

Identifying the Areas for Change

To highlight the required changes, we used the following mthodologies:
- Process map tracking of works instruction
- Process map following customers' keys
- 5S assessment of after sales department
- Video of technicians to identify wastage
- Flowchart of car park movements
Three areas of chnage were identified: the service reception, the workshop and the parts department. For the service reception,we began by looking at what we do and how and why we do it. The review entailed detailed analysis of the appointment booking criteria and the throughput process of the customer when they physically arrived at the service department. This highlighted that there was room for improvement.

We had to have an accurate count of hours that would mirror the loading capacity that was available within the workshop. This meant showing which technicians were available , their skillset and their potential efficiency in carrying out those tasks. This could be used to set the throughput.

There needed to be a mechanism for the service department that could control both the resource available and its related time constraints. There also needed to be an input to ensure all the necessary components were available when they were required.

While reviewing the workshops, we asked ourselves." while the workshop does not need in refurbishment, could we use the resources available in a more effective manner?"we thought about production facilities:"How do they minimize wastage or potential down time?" technician productivity and efficiency was also an area for improvement.

A video camera was used to capture data and map out on a spaghetti chart where the technicians went when they left their work bay because the tools they require were somewhere else. They also had to walk to the parts department and the service respetion desk several times a day to be issued with new jobs.

The review of the parts department identified that up to 20% of parts required for the vehicles currently being worked on were not available. There needed to be a process that ensured that routine components should be available for fitment.

Application of the Tools

The first step was a workshop control board. The board is used to plan the technician's workload throughout the day, minimizing the need to interact skillset is allocated and that the vehicles are ready for collection at the agreed time. The board also helps to control any vehicles that need to be carried over and maintains continuity within the workshop process. The board encompasses the waiting option given to customers as this helps alleviate the car park congestion.

The implemented board has the technician's names on one side and time slots alongside. The work is then planned for each technician the day before using magnets. It enables the department manager to see instantly if there is enough work for the day and provision any shortfall accordingly.

We also decided to make improvements on the the work bay areas. All services were installed in the work bays and the technicians were given a trolley that had all the tooling required to carry out the servicing function. Ramps had additional tools located within the bay area to limit the work downtime. A standardized walk path is now used to enable the technician to carry out all functions and wherever possible minimize the need to revisit areas already worked on.

After the success of this initial work this was then partially deployed to the rest of the workshop. 5S methodology was the main process used to create a desire for change within the workshop team and it was clear that as the team went through the process there was a huge mindset change.

The works instruction flow was improved so that all works instructions are validated for customer information and work required and then passed to parts for pre-picking. This enables the technician to follow a flow of work and to concentrate on his task in hand, minimizing disruption and the need to leave the work station.

Sustainable is Possible

We have made our improvements sustainable through 5S audits. Criteria were selected to ensure the main elements of the process could be maintained , which requires all individuals to take ownership of their part and instills a daily discipline. A checklist was created with key areas of the process and the service manager now carries out the audits to ensure sustainability. This, allied to the standard dealer key performance indicators, is used to identify potential shortfalls.

Overall the project has been a great success. This can be shown in a number of different ways:
- Hours sold throught the service departments have increased
- Technicians' overall efficiency has improved by more than 20% and productivity
by 13%
- Workshop sold per repair order increased by 25%
This helped the service department to increase its bottom line profit by 30,000 Sterling pounds and has given an increase by 60,000sterling pounds when using a year on year comparison.

The improved process has resulted in vehicles being prepared and delivered within three days. This means the funds are already in the company bank acount from the customer or finance house before the manufacturer debits the vehicle cost and there are no new vehicles taking up unnecessary parking spaces. The car park is now more fluid with "while you wait" visits encourages as the capacity is there to ensure the vehicle can be turned around within the agreed timeframe.

The improved process now covers the entire customer experience from booking the car in to collection after completion of required work. Colliers Nissan is able to offer its customer an accurate timeslot for service and reduced "turnaround" time. The customer therefore benefits from absolute certainty that his or her car has been serviced exactly in line with Nissan requirements as well s spending less time waiting and in discusion with dealership staff.

It's very rare to embrace a program and see all aspects of initiative have such a positive impact in all areas of the business including an increase in staff morale, improvement in processes , increased capacity and efficiency, improved customer satisfaction and the substantial increase in profit.


5S is the anme of a workplace organization methodology that uses a list of five Japanese words , transliterated and translated in english, start with the letter S. working with the process usually involves discussion with employees to build a clear understanding of how work should be carried out. It also aims to isntill ownership of the process in each employee.
The 5S are:

1. Seiri/Sorting- Go through all tools and materials in the work area. Keep only essentail items. Everything else should be stored or discarded.

2. Seiton/ Straighten or Set in Order- There should be a place for everything and everything should be in place. The place for each item should be clearly labelled. Items should be arranged in a manner that promotes efficient work flow.

3. Seiso/Sweeping or Shining or Cleanliness (systematic cleaning). keep the workplace clean as well as neat. At the end of each shift , clean the work area and be sure everything is restored to its place.

4. Seiketsu/Standardizing . Work practices should be consistent and standardized. Everyone should know exactly what his or her responsibilities are adhering to the first 3 Ss.

5. Shitsuke/Sustaining the discipline. Maintain and review standards. Once the previous 4Ss have ben established they become the new way to operate. Maintain focus on this new way and do not allow a gradual decline back to the old ways. While thinking about the new way, also think about even better ways.

Spaghetti Chart is a tool used to demonstrate the physical flow of an entity or multiply entity types (e.g product , information) and the associated travel distance for a single cycle of a process. It is a visual representation of travel distance and travel patterns. (The name was conceived by Jolito Ortizo Padilla- Copyrighted)

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