EcoLink Inc. Lean Kaizen Event Case Study

• Sort: Look through all objects in a room, remove the unnecessary ones.
• Set in Order: Find a proper place for each object, label this place.
• Shine: Thoroughly and consistently clean the room.
• Standardize: Train employees and delegate responsibilities to ensure that the first three steps continue.
• Sustain: Keep the first four steps going.

• Switched to accounting software with a duplicate order function that automatically fills in the information from a previous order, but allows the user to tweak the order. Because most of Ecolink's clients make the same order many times, this function greatly reduces manual data entry and guards against human error. Staff can also pull up the software while on the phone or just after receiving an email and add the order immediately instead of jotting down notes for later use. Putting ordering information straight into the system increases accuracy and reduces paper waste.
• Convinced 10% of customers and 80% of vendors to switch from traditional mail, faxing, and other paper-intensive communication to electronic data interchange (EDI), electronic funds transfer (EFT), and email. Ecolink is also considering a 5% discount to customers who commit to pay online with a credit card. This saved 40 hours/year, or $1,500, with the added benefit of being paid faster.
• Altogether, this software optimization saved $16,500 annually.

• Increased access to software and information technology so that staff have the authority to perform their jobs more easily.
• Made email tracking a standard procedure. The majority of Ecolink's calls are from customers who want to know why a shipment has not yet arrived. In order to improve customer peace of mind and reduce employee time spent answering calls, Ecolink now emails the customer their invoice and tracking number as soon as their items are shipped. This allows customers to check the progress of their shipment on the shipping company's website.
• Switched from "Prepay and Add" to a Customer Account. With "Prepay and Add," the customer pays for the product, Ecolink ships it and the shipping company bills Ecolink, and then Ecolink bills the customer for shipping. Customer Accounts are a much more efficient option, in which the customer pays Ecolink for the product and the shipping company bills the customer directly. Besides saving time for Ecolink, this policy greatly reduces paper waste.
• "Touches" in the inventory, billing and ordering system by Ecolink staff were reduced from 118 to 26; a 78% reduction.
• Improved logistics enabled 78% fewer pages to be printed per order. This is a total of 55,200 pages per year, and overall, about a 40% reduction, which saves 8 trees, 1,800 lbs of CO2, and 579 lb of solid waste. (Calculated from the Environmental Defense Fund's Paper Calculator,
and assuming 5g per sheet.

• Placed easy-to-read labels for each product on the shelves.
• Established a whiteboard for Visual Controls. The whiteboard lists the orders that are "ready to ship" and "behind schedule" in different columns, allowing all employees to see how operations are progressing at a glance. This greatly improved communication.
• Used 5S to organize everything and make inventory visible. The heaviest and most often shipped products are now arranged closest to the door. A spare room is now used for miscellaneous items, giving Ecolink a good visual of what items do not sell quickly and are therefore more risky to purchase.
• Relocated the printer closer to the warehouse to reduce time spent walking between the warehouse and the main office.
• Promoted alternatives to a particular shipping carrier. After realizing that 95% of damages were caused by one shipping company, Ecolink began making a point of shifting its business to other shipping companies and letting its shipping carriers know that continued business depends on their shipping products on time, keeping products undamaged, and not sending products back to Ecolink.
• Eliminated unnecessary packaging prior to shipping, which reduced shipping weight, costs, and the need for customers to manage packaging materials upon receipt of products.
• Began to routinely sign "Section 7" on the shipping form, which transfers responsibility for damages to the shipping company.
• Logistics and warehouse improvements saved 2,000 hours per year and over $65,000.

• Installed a programmable thermostat to automatically turn down the heat or air conditioning during hours when no one was working.
• Unplugged the hot water tank and signed up for the utility company's natural gas shut-off program, which lasts from May 1 to October 15. The only office use of natural gas was to heat the building and heat water for hand-washing, both of which Ecolink employees determined to be unnecessary in the summer. Now, Ecolink receives no gas bill at all (including service charges) for five months of the year.
• Replaced break room microwave and other old, inefficient appliances.
• Unplugged several unused water fountains so that they no longer cool the water.
• Transitioned the computer server to virtual hosting at a data center.
• Improved energy management amounted to savings of 15,000 kWh or about 7 tons of coal, which is 28,000lb CO2 and $6,000 in annual savings. (Assumes all electricity is produced by burning coal. Calculated from US Energy Information Administration's Voluntary Reporting of Greenhouse Gases Program, and assuming averaging the emission coefficients of all four coal types.

• Arranged for empty metal drums to be taken back by supplier for free.
• Began reusing packaging boxes.
• Switched from purchasing 0% post-consumer office paper to 100% post-consumer office paper. For Ecolink's yearly paper consumption of 80,000 pages, this conserves 11 trees and prevents 1082 lb CO2 and 317 lb of solid waste.

Annual Savings

• Environmental: Save 19 trees, prevent 31,000 lb of CO2 and decrease solid waste by 900 lb due to reduction in paper, electricity, and natural gas use.
• Time and Capacity: Save 2,600 hours and increased shipping capacity by 50% by improving logistics and warehouse organization.
• Economic: $100,000
• Human Resources: Improved employee morale and confidence in Ecolink's business, brand, and staff.