KAIZEN Leads the Way as Sonae MC Moves from Training to Innovation
Giving employees tools for finding answers is arguably the most powerful of all training methods, and when the structure is provided for answers to become action, this can transform an entire company. Taiichi Ohno knew this when he developed the Toyota Production System, and Sonae Modelo Continente (MC) , a global leader in the retail sector, has reconfirmed it more than half a century later.
Sonae MC is part of Sonae, a global corporation employing over 37,000, and serving customers through more than 700 stores, which include Modelo supermarkets and Continente hypermarkets, as well as outlets providing health, supplies, sporting goods, apparel, and appliances.
Sonae’s MC’s KAIZEN journey started modestly. “In 2006 we wanted to retrain workers in a component process allowing us to increase productivity and efficiency,” says Jaime Maia, Human Resources Manager for Sonae MC. “This was in line with our efforts in the last few years to improve product and service skills.”
KAIZEN Institute was selected to look at the store operations and make recommendations. In 2007, senior management decided to give KAIZEN a try. The training, which eventually involved 19,000 workers, emphasized three KAIZEN tools. The first of these was 5S, which gives workers a structure for eliminating disorder in physical environments, such as stocking and receiving areas. The next area was visual management – the implementation of labeling systems, markings, colour codes, and other visual tools to provide visual guidelines for an orderly environment. Finally, there was standardization – the creation of written processes that allow the organization to not only sustain the gains made through the KAIZEN process, but also share them with other divisions.
The initiative turned out to be much more than a training exercise - through a series of structure KAIZEN events, teams quickly identified areas where Muda, Japanese for waste, was getting in the way of quality. “At the outset, people invested the time in applying KAIZEN tools in chosen areas, and quick wins were obtained,” says Rui Tenreiro, Consultant for KI.
Once workers began to see what was possible, there was no turning back. “Throughout our first year the KAIZEN impact was so intense that we realized we couldn’t hold back the improvement fever that emerged in the workplace,” says Maia. “We began this entire journey as a training program, and rapidly we evolved to a major project.”
As the momentum grew, a system had to be developed to manage the change on a wider scale. “In 2009, in order to ensure project consistency, we decided to create our Implementation Continuous Improvement System – SIM,” says Maia. “This is a framework where respective functional groups work together to contribute to a consistent system, in alignment with our mission, goals, values and principles.”
“After the first couple of months,” says Tenreiro, “instead of talking about a KAIZEN project, it was already all about a KAIZEN culture.”
KAIZEN is, of course, all about the customer, and Sonae’s SIM model focuses on a 7-stage value stream that starts with the receipt of a product and culminates with its sale to a customer. Anything in the value chain that does not contribute to customer value is considered Muda.
Transport and Merchandising is one of the steps in the value chain that was targeted. In one initiative, a benchmarking team identified a unit of work that took 80 minutes. Through a number of interventions, including reorganizing the space, developing a fast lane for promotional items, and carefully planning transport methods, the same unit of work was reduced to 50 minutes, representing a 35% productivity improvement.
“In the past three years,” says Maia, “we accomplished many gains through operational efficiency. By being better organized in our warehouses, which we’ve accomplished with 5S, Visual Management and Standardization, we’ve gained productivity time that has allowed us to offer our clients better service.
Productivity gains have, for example, freed up resources to allow replenishment tasks to take place before the stores open, reducing disruption to shoppers. When re-stocking has to occur during store hours, new processes and equipment make this invisible to customers.
Other gains have included fewer shortages, a decrease in breakages, higher throughput, and a neater, more pleasing work environment. Perhaps the greatest benefit, however, has been a growing culture of employee engagement. Employees have submitted 20,000 ideas for improvements, resulting in 2000 prototypes and 200 implementations.
The key to getting employees onside, according to Maia, was to communicate right from the start that management understood their pivotal role in the change process. “It’s not easy to tell workers that we are going to learn KAIZEN methodology to improve our working way,” says Maia, “especially because in our 25 years history, we’ve been the best in market, growing year after year. So during this process, we adopted the phrase ‘Don’t blame, don’t judge’, to actively encourage workers to share ideas and innovations. As a result, they took this project as their own, and promptly started implementing improvements that caused an immediate positive impact.”
Tenreiro credits senior management with having the vision to understand the potential power of cultural change. “From the first day, top management was actively involved, and KAIZEN was part of their agenda,” says Tenreiro. “The idea of promoting a culture that overcomes obstacles comes straight from Sonae’s founder, Mr. Belmiro de Azevedo.”
KAIZEN Institute took a similar approach, recognizing that companies cannot be changed from outside, but must transform themselves from within. “The people from KI don’t bring solutions, and don’t have secret ingredients,” says Maia, “but they indicate the path, they lead us to paradigm change, and they challenge us to improve every day, with everyone, everywhere in the organization.” This method, the most powerful way of teaching, is what KAIZEN is all about.