Hoshizaki Boosts Productivity, Cuts Costs with Georgia Tech Help

The Peachtree City, Ga. facility of Hoshizaki America -- a manufacturer of commercial ice makers, dispensers, refrigerators and related products -- recently cut its costs by more than $7 million and increased productivity by 75 percent through implementation of a continuous improvement system.

The impressive results, produced with assistance from Georgia Tech's Georgia Manufacturing Extension Partnership (GaMEP), came about after the company had labored for a number of years to sustain a continuous improvement system. These earlier improvement efforts had focused on large projects using a team-based approach, which highlighted both the existence of activities that didn't add value and the invisible walls between departments. For competitive reasons, the company felt the need for improvement was critical.

In 2007, Derek Woodham and Larry Alford, Georgia Tech lean specialists, conducted a lean assessment of the company's operations.

"When the results came back from the lean audit, we began questioning our business," said Jeff Tatum, Hoshizaki's director of manufacturing improvements. "Our CEO decided to implement the lean approach, and each person in a leadership role was required to complete lean reading material. This helped our leadership team fully understand the difference between value-added and non-value-added work."

In-house lean simulation training class for executives and other key personnel added to this foundation. By the end of the courses, Hoshizaki staff had mapped current and future value streams, identified appropriate techniques for improvement, developed a lean strategy and planned the application of specific lean techniques.

Woodham then proposed a series of kaizen events. Kaizen, or rapid improvement, focuses on a particular process or activity that identifies and quickly removes waste. Tatum and other members of the leadership team decided to focus their efforts on four product lines in the plant.

"The results of the kaizen events were so remarkable that a Kaizen Promotion Office (KPO) was established to implement lean across the organization," Tatum said. "It really became the lean training center and the change agent for the organization."

Hoshizaki also began implementing 5S in each manufacturing area. 5S (sorting, straightening, shining, standardizing, and sustaining) is a method for organizing the workplace. The "sort" phase led to the establishment of a red tag system for sorting unused items from each work area. Visual control aids were made available to each area during the "set" phase, and time was allocated for cleaning and inspection during the "shine" phase.

In 2009, Hoshizaki began to see double-digit productivity improvements that company officials expect to see continue.

"Georgia Tech training allowed each of the KPO members to understand the use and implementation method of the lean tools," said Jim Procuro, senior vice president of manufacturing at Hoshizaki. "By using employee ideas to identify and eliminate waste, we have been able to establish a successful continuous improvement system."

Tatum noted that more than 2,700 employee ideas were submitted last year and 43 percent of the suggestions were implemented. He expects that number to increase as Hoshizaki employees become more engaged and kaizen becomes a way of life.

Hoshizaki America was also the first company to join the Georgia Tech Lean Consortium, a forum for organizations to advance their knowledge and effective use of lean principles. According to Tatum, the monthly events have allowed companies to share and learn from each other and helped tremendously with Hoshizaki's benchmarking.

"The learning tours have been fantastic and the Georgia Tech training -- whether it's a value stream mapping event or a lean boot camp -- has been very useful in helping our employees understand the tools and applications," Tatum explained. "But there's a lot of activity with Consortium members that takes place outside of Georgia Tech. It's turned into a natural support function for continuing to learn."

Both Tatum and Procuro attribute Hoshizaki's success to support from the CEO and his executive team for the lean initiative and for the flexibility to adjust goals and measures as the project developed. Tatum noted that while other companies were worried about jobs and survival last year, Hoshizaki was able to give bonuses to its employees.

"Something like that encourages the employees to push that much harder, because they know the honesty and integrity are there on the part of the leadership team," he said. "Now lean is internalized and is just part of our own way of doing things in every project we do now. We are thankful that Georgia Tech continues to be there to support our journey."

About GaMEP: The Georgia Manufacturing Extension Partnership (GaMEP) is a program of Georgia Tech's Enterprise Innovation Institute and is a member of the national MEP network supported by the National Institute of Standards and Technology (NIST). The GaMEP, with offices in nine regions across the state, has been serving Georgia manufacturers since 1960. With a broad range of industrial expertise, the GaMEP helps manufacturing companies across Georgia grow and stay competitive. It offers a solution-based approach through technical assistance, coaching, education, and connections to Georgia Tech, industry and state resources designed to increase top line growth and reduce bottom line cost.

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Media Relations Assistance: John Toon (404-894-6986)(jtoon@gatech.edu) or Abby Robinson (404-385-3364)(abby@innovate.gatech.edu).