Application of Lean Operations Improvement Projects in Printing and Packaging Enterprises

Application of Lean Operations Improvement Projects in Printing and Packaging Enterprises

With the continuous development and increasing maturity of the printing and packaging industry in China, along with the arrival of the post-pandemic era, competition among printing and packaging enterprises is becoming more intense. Factors such as rising business costs, price pressure from upstream clients, and increasing environmental costs are squeezing the profit margins of packaging companies. As a result, printing and packaging enterprises are facing significant survival pressures. After years of explosive growth, China’s printing and packaging industry is entering an era of industry consolidation under intense competition. "Survival of the fittest" will become the theme of this stage, and improving management levels will be the key for enterprises to survive in this fierce competition. As manufacturing enterprises, production management becomes crucial.

The Need for Lean Operations in Printing and Packaging Enterprises

In response to the challenges of maximizing profits, adapting to fast-changing market demands, and achieving smart manufacturing goals as outlined in China’s "Made in China 2025" strategy, the need for lean operations improvement is pressing. Traditional thinking, bottlenecks in processes, and management deficiencies have severely hindered the improvement of management levels in printing and packaging enterprises, affecting their ability to reduce costs and increase efficiency. To solve these problems, a transformation of operations and an improvement in management are necessary to help companies seize opportunities, improve overall operational governance, and meet the demands of modern industry.

Lean operations improvement projects are an excellent choice to move away from outdated management thinking and help companies develop more efficient and refined operational strategies. By implementing lean thinking, focusing on continuous improvement, and eliminating waste, companies can build a lean management system that is tailored to their specific characteristics. This will improve overall management efficiency, streamline processes, and enhance the "soft" skills necessary for creating a low-cost and differentiated competitive advantage.

1. The Connotation of Lean Operations Improvement Projects

1. Objective-Oriented with a Focus on Cost Reduction and Efficiency Improvement: The goal of lean operations improvement projects is to create value, focusing on reducing costs, increasing profits, and improving overall efficiency. These projects aim to establish precise indicator systems and achieve breakthroughs in operational system improvement, organizational structure optimization, and employee mindset and quality enhancement.

2. Lean Management Thinking as the Guiding Principle: These projects should follow lean management principles with a focus on cost reduction, efficiency improvement, and transforming traditional thinking. Lean diagnostic methods and tools are used to identify management weaknesses, analyze problems, and uncover potential, providing a comprehensive project management approach from diagnosis to implementation, completion, and evaluation.

2. Characteristics of Lean Operations Improvement Projects

1. Achieving a Closed-Loop Project Management System: Lean operations improvement projects require a closed-loop system that includes diagnostic project initiation, process control, completion acceptance, continuous improvement, and knowledge management. This reflects the PDCA (Plan-Do-Check-Act) cycle, which is based on Deming’s theory, and applies MBO (Management by Objectives) and PMBOK (Project Management Body of Knowledge) principles.

2. Breaking Traditional Thinking and Solving Problems from Multiple Perspectives: Lean operations improvement projects combine regulatory management projects with self-managed projects, ensuring they work together to enhance performance and overall management.

3. Using Comparative Analysis for Continuous Project Initiation: Projects use comparative analysis methods such as "two measures," "four quadrants," and "one standard" to identify areas for improvement, ensure continuous progress, and drive results in a systematic way.

• Two Measures: Comparing against historical best performance and industry-leading standards.

• Four Quadrants: Analyzing unit indicators dynamically, identifying their position, and making improvements accordingly.

• One Standard: Comparing against design standards or theoretical limits.

4. Short Implementation Cycle: Lean operations improvement projects typically focus on improving key performance indicators (KPIs) and boosting performance, with project cycles generally lasting between 6-12 months. Quick wins can be achieved in projects lasting 3-6 months.

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3. Foundations for Lean Operations Improvement Projects

A robust management framework is essential for ensuring the success of lean operations improvement projects:

1. Establishing a Four-Tier Management System:

• Leadership Group: Responsible for the strategic direction and major decisions of the improvement project, as well as providing resources.

• Implementation Working Group: Responsible for implementing decisions and organizing the execution of the lean operations improvement project.

• Project Office: Manages day-to-day project activities, oversees progress, and ensures that the project is moving forward effectively.

• Unit-Level Implementation Groups: Ensure that lean operations improvement is carried out at the workshop and team levels, aligning with the overall project goals.

4. Key Methods in Lean Operations Improvement Projects

(1) Guiding Principles

1. Two Key Orientations:

• Goal-Oriented: Focus on the target, always aiming for the best possible result.

• Problem-Oriented: Be proactive in identifying, addressing, and solving issues.

2. Five Mindsets:

• Precision Thinking: Ensure that all actions are specific, accurate, and well-executed.

• Extreme Thinking: Aim to achieve the best possible standards in all areas.

• Bottom-Line Thinking: Prepare for the worst-case scenario and strive for the best outcome.

• Flexible Thinking: Adapt to changes quickly and make necessary adjustments.

• Systematic Thinking: Take a holistic approach, ensuring all aspects of the project are coordinated and prevent fragmentation.

3. Creating a Learning Atmosphere: Encouraging knowledge exchange and creating a platform for interaction and innovation is critical to fostering creativity and continuous improvement.

(2) Building the Standard System for Lean Operations Improvement Projects

To ensure the long-term success of lean operations improvement projects, companies need to develop a "Standard System" and an "Evaluation System" that will help drive continuous improvement.

1. Standard System:

• Project Value: Measures difficulty, scope, and impact on cost reduction and efficiency improvement.

• Project Goals: Defines advanced goals, KPI breakdowns, and progress tracking.

• Project Implementation: Focuses on problem-solving methods, improvement measures, and the effectiveness of applied solutions.

• Project Outcomes: Measures completion against objectives, financial benefits, and overall contribution to company growth.

• Standardization: Ensures processes, systems, and standards are established, implemented, and sustained.

• This system ensures the smooth execution of the project and clarifies roles and responsibilities. Key dimensions include:

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　　A standardised system for Lean Operation Improvement projects with five dimensions

2. Lean Operations Improvement Project Management Evaluation System

Based on the "Five Dimensions" of the Lean Operations Improvement Project Standard System, this section designs a "Five-Stage" Project Management Evaluation System.

First Stage: Project Initiation Review

The lean operations improvement project consists of top-down directed projects and bottom-up identified projects. Top-down projects are directly included in the company’s regulatory projects, while bottom-up projects are divided into company-regulated projects and self-managed projects based on their importance and effectiveness. Company-regulated projects are subject to unified evaluation and assessment, while self-managed projects are evaluated and assessed by the relevant departments.

Two levels of project initiation reviews are implemented:

1. Preliminary Review: The project is initially evaluated based on its systemic and comprehensive impact as well as its annual effect potential.

2. Professional Review: Relevant professional management departments conduct a systematic review of the proposed company-regulated projects. Those that meet the conditions are included in the company’s regulatory projects for unified management.

Second Stage: Milestone Review

Projects are reviewed based on their completion of milestone goals. A classification system of "green cards" and "yellow cards" is used:

• Green Card: The project meets the monthly milestone goal.

• Yellow Card: The project fails to meet the monthly milestone goal.

Milestone reviews are conducted monthly, and quantitative evaluations are carried out. Results are communicated at representative project meetings, websites, and bulletins, ensuring that projects are implemented according to the plan. The yellow card projects are analyzed to identify delays, and necessary corrective actions are taken.

Third Stage: Final Review

In this phase, monthly project completion reviews are held, with a “four-level review” process:

1. Self-Review by the Leading Unit: The project’s monthly target completion and achieved benefits are self-assessed and evaluated.

2. Benefit Realization Review: The finance department reviews the project’s realized benefits against the annual budget or the best three months from the previous year. For ongoing projects, this evaluation is based on their final stage.

3. Professional Review: Professional management departments assess the project’s completion status and provide expert advice.

4. Centralized Review: The project office organizes a review committee for centralized evaluation and confirmation of project results.

For efficiency, the review group is established according to the project’s type and characteristics, with a team of 6-9 members, including project office leaders and relevant department experts.

Fourth Stage: Consolidation Review

To strengthen the management and consolidation of completed projects, quarterly reviews are implemented to ensure that results are solidified and that performance does not regress. The results are categorized as:

• A: Project KPI for the quarter meets the completion level and shows significant improvement.

• B: Project KPI for the quarter meets the original goal level.

• C: Project KPI for the quarter has not met the original goal for 1 month or more, due to objective changes.

• D: Project KPI for the quarter has not met the original goal for 1 month or more, but no significant external changes occurred, indicating poor management.

A four-level review system is used to ensure effective consolidation:

1. Self-Inspection by the Responsible Unit: The project team reviews the completion status and analyzes potential reasons for any deviation.

2. Professional Review: Expert departments assess the status of the project’s key performance indicators (KPIs) and reasons for any regression, providing recommendations.

3. Centralized Review: The project office organizes a review committee to confirm the status and determine the results.

4. Re-Review: The project office, in collaboration with the finance department, conducts a secondary review to ensure quality and accuracy.

3. Long-Term Guarantee Mechanism

To ensure the smooth implementation of the standard system and evaluation system, a "four-level" long-term guarantee mechanism is established. This mechanism connects the promotion of lean operations improvement projects with value creation effectively.

1. First Level: Process Evaluation and Assessment:

• The project goals must be challenging and set with milestones. If objective conditions change, the company can adjust goals, but these adjustments must be approved by senior leadership.

• For projects marked with yellow cards, the responsible unit is penalized between 1,000 to 5,000 yuan.

2. Second Level: Final Review and Evaluation:

• The project’s final goals and completion times should align with the company’s review plans.

• After a month of project completion, teams are rewarded based on the realized benefits. Calculations should be realistic and verified by the finance department, with no double counting of benefits across projects.

• Projects meeting deadlines or finishing ahead of schedule receive additional rewards.

3. Third Level: Consolidation Evaluation:

• Projects with strong KPI consolidation are recognized and promoted across the company.

• If KPIs regress after completion, penalties are applied, including reclaiming part of the reward for non-conforming projects.

4. Fourth Level: Evaluation Group Assessment:

• Evaluation and review teams are established to conduct periodic assessments of project initiation, milestone reviews, completion, and consolidation.

• To motivate the team members, evaluation group members receive quarterly bonuses based on performance.

Conclusion

The successful implementation of lean operations improvement projects is crucial for the development and efficiency of printing and packaging enterprises. These projects focus on reducing costs, improving production efficiency, and fostering a culture of continuous improvement. By establishing a structured evaluation and review system, companies can ensure that lean projects are carried out effectively, results are sustained, and continuous improvements are made. This approach allows companies to maintain competitiveness in an increasingly demanding market and ensure sustainable, high-quality development in the long term.