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Application of Lean Operations Improvement Projects in Printing and Packaging Enterprises

2022-03-15 创始人

Looking at domestic and international printing and packaging markets, there has been a continuous shift toward discrete order products characterized by "small batches, multiple varieties, short lead times, and low costs." Labor costs have gradually replaced raw material costs as the primary cost, placing increasingly higher demands on labor-intensive packaging enterprises. How to maximize profits for printing and packaging enterprises, how to respond to rapid market changes and ever-evolving customer demands, and how to achieve the national intelligent manufacturing goals for 2025 are critical issues that printing and packaging enterprises must contemplate and immediately put into action. Traditional mindsets, bottlenecks in processes, and management shortcomings have severely constrained the improvement of management levels and the achievement of cost reduction and efficiency enhancement goals in printing and packaging enterprises. Management challenges such as weak management foundations, low operational efficiency, and insufficient attention to detail urgently need effective solutions. Therefore, promoting operational transformation and management improvement is a crucial initiative for companies to seize opportunities and enhance overall operational governance levels. It is a matter of long-term and fundamental importance for corporate management, adapting to the demands of the era's development and possessing significant practical and far-reaching strategic importance.

Driving operational transformation and management level improvement in printing and packaging enterprises, ensuring that project management does not become merely formalistic, breaking away from the constraints of traditional management thinking, and applying lean operations projects to improve management performance are excellent choices. By advancing operations management improvement projects, with a management philosophy of continuous refinement and improvement, starting from backward mindsets of complacency with the status quo and lack of proactive continuous improvement, eliminating waste and reducing variation, firmly establishing lean awareness, cultivating lean capabilities, shaping lean culture, and forming lean characteristics, enterprises can explore and establish lean management systems with their own distinctive features. This systematically enhances the refinement, precision, intensification levels of management and the "soft" power of management, shaping low-cost and differentiated competitive advantages. Therefore, improvement projects to build lean operations management systems are imperative. Driven by operations management projects, improving management systems, advancing process design, and perfecting long-term safeguard mechanisms will standardize operations management throughout the entire process and in all aspects, achieving institutionalization, process-orientation, standardization, form-based management, and informatization of operations management. This thereby promotes operational transformation and management level improvement in printing and packaging enterprises, laying a solid foundation for sustainable, high-quality development of packaging enterprises.

1. Connotation of Lean Operations Improvement Projects

1Connotation of lean operations improvement projects: With value creation as the goal, focusing on the core themes of cost reduction and efficiency improvement, loss elimination and profit generation, following the approach of "target indexing, index parameterization, and parameter precision," establish a precise index system to achieve comprehensive breakthroughs in operations system improvement, organizational structure optimization, and employee mindset and quality enhancement.

2Connotation of lean operations improvement projects: Guided by lean management thinking, with cost reduction and efficiency improvement, loss elimination and profit generation as objectives, and mindset transformation as the prerequisite, effectively apply lean diagnostic methods and tools to identify management shortcomings, analyze problems, and tap potential, achieving a comprehensive project management methodology system covering the entire process from diagnosis and project initiation, process control, project completion and acceptance, institutionalization and improvement, evaluation and assessment, to knowledge management.

2. Characteristics of Lean Operations Improvement Projects

1Achieving closed-loop project management. Form a closed-loop management system including diagnosis and project initiation, process control, project completion and acceptance, institutionalization and improvement, evaluation and assessment, and knowledge management, embodying the PDCA closed-loop management philosophy. This is the practical application of Deming Cycle (PDCA cycle) theory, the specific implementation of MBO (Management by Objectives), and the practical application of BPM-CBOK (Business Process Management - Common Body of Knowledge) theory.

2Breaking traditional thinking, discovering and solving problems from multiple levels and perspectives. Lean operations improvement projects enable organic integration of company-supervised projects with self-managed projects and various professional division projects, promoting overall improvement in performance and management.

Applying comparative analysis methods to promote cyclical project initiation. Utilize the "two rulers," "four quadrants," and "one standard" comparative analysis methods to promote cyclical project initiation for completed projects, achieving continuous index improvement, rolling advancement, and spiral ascent.

3The "two rulers" refer to comparison with one's own historical best level and comparison with industry advanced levels; the "four quadrants" refer to dynamic analysis of unit indicators, real-time mastery of each indicator's quadrant position, and according to the "dual high" standards, identifying deficiencies, formulating measures, and dynamic improvement; the "one standard" refers to comparison with design standards or theoretical limits.

4Short implementation cycles, emphasizing "short, flat, and fast." Lean operations improvement projects mainly refer to breakthrough projects that achieve performance index improvement and performance enhancement through management means. The implementation cycle is generally 6-12 months, with quick-win projects not exceeding 3-6 months. Therefore, lean operations improvement projects are generally advanced continuously on a semi-annual cycle."

3. Infrastructure Construction for Lean Operations Improvement Projects

Establish a "Four-Element" system management architecture, where each higher level controls and supervises the level below, and each lower level supports and ensures the level above, providing foundational guarantees for lean operations improvement projects.

First, establish a company leadership group, primarily responsible for researching and making decisions on major matters concerning lean operations improvement projects and providing resources.

Second, establish a company promotion working group, mainly responsible for researching and implementing major decisions on lean operations improvement projects, and organizing and advancing the implementation of lean operations improvement projects.

Third, establish a Promotion Working Group Office (hereinafter referred to as the "Promotion Office"), responsible for the daily management and consulting supervision of lean operations improvement projects, establishing platforms and mechanisms for continuously advancing lean operations improvement projects, and ensuring the solid and effective implementation of lean operations improvement projects.

Fourth, establish promotion groups at all levels of units, responsible for organizing and implementing the advancement of lean operations improvement projects in workshops and teams, and cooperating with the Promotion Office to ensure effective project implementation.

4.Main Methods of Lean Operations Improvement Projects

1Clarify the guiding ideology of "adhering to two orientations, establishing five mindsets, and creating one atmosphere."

 Adhering to two orientations: Target orientation: Lock onto targets and aim at the bullseye. Hitting an 8 on the target is because you were always aiming for 10. Problem orientation: Be sensitive in identifying problems, courageous in confronting problems, and adept in solving problems.

• Establishing five mindsets: Precision mindset: Be specific and accurate, with precise and proper actions.Limit mindset: Aim for the best indicators and carry work to the extreme.Bottom-line mindset: Prepare for the worst in everything, while striving for the best results.Variable mindset: Adapt to changes, adjust according to reality, implement flexible measures, and proactively adapt.Systems mindset: Plan holistically, coordinate advancement, and prevent piecemeal, fragmented patching.

 Creating a strong atmosphere of mutual learning and reference: Learning and reference are the foundation of innovation; build interactive learning and exchange platforms.

2Standard System Construction for Lean Operations Improvement Projects

As lean operations improvement projects continue to advance, explore and construct a standard system for lean operations improvement projects driven by the "dual wheels" of "standard system and evaluation system," supported by a "long-term safeguard mechanism."

 Standard system for lean operations improvement projects

To ensure the expected benefits of projects are realized, standardize project review processes, clarify responsibilities, accumulate practical experience, and gradually form a "five-dimensional" standard system for lean operations management improvement projects.

First Dimension: Project value is composed of two major elements—difficulty and impact.

Difficulty element: Mainly refers to project implementation cycle, scope of implementation impact, and degree of implementation difficulty.

Impact element: Refers to the degree of impact on the company's cost reduction and efficiency improvement, and management enhancement after project implementation.

Second Dimension: Project objectives are composed of two major elements—objective advancement and KPI decomposition.

Objective advancement element: Refers to the degree of advancement in setting objectives benchmarked against industry advanced levels, own historical best levels, annual budgets, and theoretical design parameters.

KPI decomposition element: Refers to the degree of implementation in decomposing KPI objectives clearly to positions and individuals with defined milestones, and breaking down objectives to monthly targets.

Third Dimension: Project implementation is composed of two major elements—problem focus and improvement measures.

Problem focus element: Mainly includes three aspects: first, whether advanced methods and tools are used to analyze and solve problems; second, the accuracy and applicability of diagnostic analysis; third, the accuracy and rationality of tool and method application.

Improvement measures element: Includes three aspects: first, the relevance and operability of improvement measures adopted by the project; second, the achievability of measure planning and implementation completion; third, the innovativeness of measures.

Fourth Dimension: Project effectiveness is composed of three major elements—target achievement, realized benefits, and outcomes.

Target achievement element: Refers to whether established project objectives are completed according to plan, while encouraging early project completion.

Realized benefits element: Refers to the degree of benefit reflection in financial accounting, with appropriate bonus points awarded based on the ratio of actual realized benefits exceeding expected benefits.

Outcomes element: Refers to the degree of demand and importance of management problems solved by the project for the company's overall development.

Fifth Dimension: Standardization is composed of two major elements—processes and systems, and institutionalization and enhancement.

Processes and systems element: Includes two aspects: first, whether effective control mechanisms have been formed; second, the degree of implementation and execution within the company of processes, systems, and standards established during project implementation.

Institutionalization and enhancement element: Refers to whether reliable measures for index institutionalization and enhancement have been formulated, whether target achievement has been incorporated into the performance evaluation system, and whether KPI/KAI performance dialogues have been formed.

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Based on the construction of the "five dimensions" of the lean operations improvement project standard system, research and design a "five-stage" project management evaluation system.

Stage One: Project Initiation Review. Lean operations improvement projects consist of two parts: top-down assigned projects and bottom-up identified projects. Top-down projects are directly listed as company-supervised projects; bottom-up projects are classified into company-supervised projects and self-managed projects according to importance and benefit creation capability. Company-supervised projects are incorporated into unified company evaluation and assessment, while self-managed projects are organized and evaluated by relevant units themselves.

A two-level project initiation review is implemented for lean operations improvement projects: preliminary review based on the principles of systematicness, comprehensiveness, and annualized benefit creation capability; systematic evaluation of proposed company-supervised projects by relevant professional management departments according to project initiation review principles, with qualified projects incorporated into company-supervised projects for unified control.

Stage Two: Milestone Review. Based on the completion status of project milestone objectives, design milestone review classification principles and implement green card and yellow card classification management for projects: Green card: projects completing monthly milestone objectives for the current month; Yellow card: projects failing to complete monthly milestone objectives for the current month.

According to classification principles, organize monthly milestone reviews based on milestone objective completion status, implement quantitative evaluation, and announce evaluation results at representative project report meetings, on websites, and in briefings to ensure projects are organized and implemented according to target plans and progress steadily. Simultaneously, implement network kanban management for project progress, analyze reasons for delays in yellow card projects, and resolve coordination matters required by projects.

Stage Three: Project Completion Review. According to project breakthrough plans, persistently organize monthly project completion reviews, implementing "four-level review": Self-review by project responsible unit: self-audit and evaluation of current month indicator completion status and generated benefits; Realized benefits review: Finance Department uses annual budget or the average of the best three months of the previous year as the benchmark, and for cyclical projects uses completion level as the benchmark, auditing project realized benefits according to settlement standards; Professional review: professional management departments audit and confirm project indicator completion status and provide professional audit opinions; Centralized review: Promotion Office organizes review teams to conduct centralized reviews of projects and determine review results.

In addition, to improve review efficiency, projects are classified according to their types and characteristics, with corresponding review teams formed to conduct simultaneous reviews. Review teams are mainly composed of promotion working group leaders and experts from relevant professional departments, with each review team controlled to 7-9 members, with a minimum of 6 members.

Stage Four: Institutionalization Review. To strengthen effective control over completed projects, ensure outcome institutionalization, prevent indicator rebound, and continuously release benefit creation capabilities, the company innovatively conducts quarterly institutionalization reviews. According to project institutionalization effectiveness, review results are classified into four categories: A, B, C, and D. Category A: Project KPIs quarterly all reach project completion levels with breakthrough improvements; Category B: Project KPIs quarterly all reach project initiation target levels; Category C: Project KPIs quarterly have one month or more below project initiation targets due to changes in objective conditions; Category D: Project KPIs quarterly have one month or more below project initiation targets, but no fundamental changes in objective conditions occurred, mainly due to poor management.

To ensure accurate and effective institutionalization reviews, a "four-level review" is implemented: Self-inspection by project responsible unit: self-check and systematic analysis and evaluation of project indicator institutionalization status; Professional review: professional management departments analyze and identify project indicator completion status and reasons for indicator rebound, providing professional audit opinions; Centralized review: Promotion Office organizes review teams to conduct centralized reviews of project indicator institutionalization status and determine review results; Re-review: Promotion Office jointly with Finance Department conducts re-audit, re-analysis, and re-confirmation of project review results to ensure project review quality.

3) Long-term Safeguard Mechanism

To ensure smooth implementation of the standard system and evaluation system and remove obstacles, a "four-level" long-term safeguard mechanism has been designed and established to achieve effective connection between lean operations improvement project advancement and value creation.

First Level: Process Evaluation and Assessment. Project objectives should be challenging, with project milestone targets established. For company-supervised projects, milestone targets may be adjusted according to actual conditions when objective conditions change, but must be approved by company division leaders. In monthly project milestone reviews organized by the company, units receiving yellow cards will be fined 1,000-5,000 RMB.

Second Level: Completion Evaluation and Assessment. Project breakthrough targets and completion times are based on company-reviewed project initiation plans. Based on monthly project completion review results and one month after outcome institutionalization, project teams are rewarded according to actual realized benefits for the month upon project acceptance. Project benefit calculations must be realistic, strictly prohibiting fabrication, transfer, or repetition. Benefits are audited and confirmed by the Finance Department, with no duplicate calculation or assessment of benefits between projects. For projects completed according to initiation plans and rated as excellent with KPIs reaching industry best levels, rewards increase by 20%. For projects completed ahead of schedule, rewards increase by 10% for each month of early completion. For delayed projects, responsible units are fined 5,000 RMB for each month of delay. If projects cannot be completed on time due to changes in objective conditions, with approval from company division leaders, clear new completion deadlines, and ability to achieve project initiation targets, fines may be waived.

Third Level: Institutionalization Evaluation and Assessment. According to quarterly institutionalization review results, projects with good indicator institutionalization are commended and promoted company-wide. Projects with rebounding indicators after completion are exposed and strictly assessed: 50% of original rewards are recovered for the first month, 100% recovered for two consecutive months, and the main responsible unit is fined 10,000 RMB for three consecutive months.

Fourth Level: Review Team Assessment. First, the company establishes project review and acceptance teams to regularly conduct project initiation reviews, milestone reviews, completion reviews, and institutionalization reviews. Second, to enhance the enthusiasm of project review and acceptance team members and ensure high-quality, efficient project advancement and review work, review subsidies of 500-1,000 RMB per person per quarter are distributed to outstanding personnel quarterly.

The above provides a preliminary explanation of the application of lean operations improvement projects in printing and packaging enterprises. However, what is actually more important is that as managers of printing and packaging enterprises, they must promote conceptual transformation in mindset, expand perspectives, broaden thinking, and gradually open up cost reduction space. The construction and implementation of the lean operations improvement project standard system truly introduces viewpoints and concepts such as "speaking with facts and data" and "doing things right, but more importantly doing the right things" into operations management, fundamentally breaking through the constraints of traditional thinking such as "indicators have reached their peak, potential has been fully tapped" and "treating symptoms rather than root causes," overcoming "cognitive barriers," and truly experiencing the enormous potential of management and the space for cost reduction and efficiency improvement. New ideas and concepts such as "benchmarking and potential tapping, infinite potential" and "continuous refinement and improvement" have gained widespread recognition in enterprises, allowing lean operations to take root in enterprises.


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