Harlequin Enterprises Limited

Kaizen Event

> RESULTS

  • 50% increase in throughput
  • 29% reduction in total production time
  • 63% reduction in travel distance
  • 7% improvement in quality
  • 29% reduction in required floor space

> COMPANY

Harlequin Enterprises Limited is the world's leading publisher of series romance fiction with worldwide sales exceeding 130 million books annually. As its only North American distribution facility, the Harlequin Distribution Center in Cheektowaga, NY ships approximately half of that volume, including nearly 9 million packages directly to customers' homes and 45 million shipped to major retail customers that include such high-profile accounts as Wal-Mart and Target. The distribution facility also handles related Fulfillment Services for the Direct to Consumer division, including a call center, payment processing and new member registration. The North American distribution center is operated as a cost center and is measured based on cost control, operational efficiency and customer service. The company's operations are conducted within a modern, single-level facility of over 400,000 square feet on a three-shift basis. Permanent employment exceeds 300 people with an additional 50-150 temporaries hired during peak periods throughout the year.

> SITUATION

Customers have become ever-more demanding in terms of requesting more choices, faster delivery and lower prices. For years, the Harlequin Distribution Center utilized a basic business model that packaged and delivered high book volumes at a relatively low cost. Due to changing market conditions and escalating costs (particularly fuel surcharges), the company was forced to take measures that would maintain both profitability and competitiveness.

Significant investment was made in technologies that would improve operational effectiveness; most notable was the implementation of a warehouse management system (RF Gun, bar-code system). Although this technology was beneficial, the company's management recognized that operationally the organization's core competencies also needed to be improved in terms of inventory accuracy, streamlined material movement, space maximization, equipment utilization, increased throughput and reduced waste. It was believed that introducing elements of lean manufacturing into the organization would help to accomplish these objectives. Insyte Consulting was engaged for the purpose of introducing and implementing these concepts into the operation.

> SOLUTION

Insyte Consulting trained a core group of personnel that would be involved in the project in the basic concepts of lean manufacturing. This was presented in a full-day workshop that provided the team a foundation and common knowledge base prior to the start of the project.

Subsequently, a meeting was held with Harlequin's management to discuss the focus of the project. This discussion aligned the project objectives with the business goals. There was guidance from Insyte Consulting during the discussion to ensure that objectives would be obtainable. The objectives chosen were improvements in output, efficiency and quality. These objectives were then used to guide the team through the project. As discussions developed at each step of the project, the objectives could then be referenced to support decisions relative to specific process improvement ideas.

A cross functional team of seven people from Harlequin was formed. During the first week, Insyte Consulting guided the team through a project scoping and data collection exercise. The first step was to develop a current state value stream map of the selected packing area. Next the team spent a couple of days measuring cycle times, performance, quality, square footage and other metrics. Observations of the work in the packing area were also recorded. This data formed the team's baseline and was used to eliminate non-value added steps.

By the end of the week a future state value stream map was created, along with a Kaizen event plan for the following week. A presentation was developed by the team and presented to management. This allowed for management to review, approve and fully support the plan, which included a commitment that the necessary resources would be available to execute the Kaizen event.

Insyte Consulting's role was to guide and mentor the team through the Kaizen event as the Harlequin team members took ownership of the project. With management's full support the improvements planned for the area were successfully implemented within just two and one half days. Specific actions taken included: the packing line was moved and shortened; new line procedures were put in place; the prep area for the beginning of the process (which had been in a separate area) was moved and linked to the packing line; visual cues were introduced; a performance metric board was strategically located in the area for all participants to see. With dramatic success and satisfaction, the project was concluded with a team presentation to management inside the packing area.

Project benefits to the company included: a 50% increase in throughput; 29% reduction in total production time; 63% reduction in travel distance; 7% improvement in quality, and a 29% reduction in required floor space. An additional benefit realized by the team included a better understanding of the packing area and the influences of their individual activities on overall performance. Because of this change in attitude, the emphasis quickly shifted from individuals working to pack books to a newly formed cell where team members work collectively to expeditiously pack the order.


"The Kaizen approach to process improvement enabled us to quickly realize significant and permanent changes in the chain-packing area. We anticipate the continued use of this methodology throughout the other areas of the facility." - John Reindl, General Manager