Leading Recycling Company Eliminates Waste From its Own Processes

With recycling as the core service that your business offers, it might be assumed that waste is already being eliminated. But, making the best use of discarded resources doesn't mean you are making the most efficient use of your own resources, as RSR Corporation has discovered.

Headquartered in Dallas, RSR Corporation operates recycling facilities in Los Angeles, Indianapolis, and Middletown, New York. The company's business is built upon the recycling of batteries…everything from the lead components to the polypropylene plastic battery cases, even the battery acids. From the old batteries, the company produces pure lead and lead alloys, which are interchangeable with primary lead. The recycled plastic is provided for re-use to plastic compounders and fabricators, and the acid is used in the production of sodium sulfate for use in the pulp and paper industry, as well as in common laundry detergents.

RSR's growth is dependent upon the growth of the battery industry, which is very incremental . . . only about 1 percent per year. So, the company knew that the only way to improve profitability was to improve its cost structure.

Bob Finn, RSR president and CEO, recognized from the get-go that to make the kind of changes necessary for improving processes was going to involve a top-to-bottom transformation of the company culture . . . a venture that was not for the weak of heart. The key was to finding out where and how to start such a large change.

Finn and his group had been researching various companies that they thought could assist on their new endeavor. They were familiar with lean manufacturing and had spoken with a number of lean consultants when they decided upon the Lean Learning Center. The Center believes that lean -- at its most basic level -- is defined as "a shared way of thinking". It's philosophy is based upon the idea that lean tools are largely ineffective unless they are supported by the proper foundation of lean guiding principles and rules to help an organization understand how things work together and why.

As Finn says, "We found this group to be more straightforward, to be more hands-on, and they weren't what I call 'latch-on consultants'. Their goal was to get us to a level of lean training and performance where we would become self-sufficient. Plus," he added, "they did not push us."

Starting with the negative

To get started on the program, Finn did something quite out of the ordinary. Rather than assemble a team that he knew was behind the company's new venture, he selected the people he considered the most negatively opposed to working with consultant companies. This group was made up of five high level vice presidents representing a combination of responsibilities - facility, MIS, purchasing, etc. As Finn commented, "They were all leadership types, but just didn't hold consultants in high regard. We had worked with consultants in the past and they viewed this as just another flavor of the month."

This group was sent to the 5-day Lean Experience program at the Lean Learning Center in Novi, Mich. where they learned the rules, tools and philosophy of lean manufacturing systems. Here they experienced lean from basic concepts to hands-on applications, working with the traditional tools of lean manufacturing such as standardization, waste elimination and process redesign.

The Center's methods of teaching represent a distinct departure from the norm. "Adults do not learn best by listening to a series of lectures," says Andy Carlino, Lean Learning Center partner and co-founder. "Adults learn though their own discovery, through experience combined with the right questions and through interaction with other adults."

Part of the experience involves an airplane simulation exercise. On day two of the session, students were arranged into groups and told to assemble as many planes as they could. During the allotted time, most teams managed to build only one airplane. At the end of the week -- after learning lean methods, tools, and applications -- groups assembled anywhere from nine to 12 planes.

After this group of RSR employees attended the Lean Experience, they all came back with a positive attitude saying, "You know, if we adopt this and do it right, this just might get us to where we need to go."

Getting started at the facilities

But, just how do you adopt it and do it right? The next step was to figure out how to spread a program of this magnitude throughout the entire enterprise.

With the first group showing such a positive response to the Lean Experience, the company started to methodically send managerial level personnel to the class. To date, 100 RSR personnel have attended classes at the Center to get basics in lean training.

At the same time, a committee was assembled at the corporate office to develop a set of ideal state goals and to develop the program, which has come to be known as the RSR Journey To Excellence (JTE). "The ideal state goals are targets that we wanted to measure and drive toward," says Finn. "It is called our Guidance Document. From this, we then added accountability to each goal and developed a comprehensive PDCA (plan-do-check-act) process."

Each plant was then assigned to take these ideal state goals and adapt them to their particular environment. At each plant there is a core lean team with a vice president and plant manager in charge of implementing the program. Additionally there is a person assigned to become the Lean Master. This assigned Lean Master or teacher is the generator of the analysis and he reports directly to the vice president at the respective locations. Every employee is now required to go through Lean Manufacturing Training classes taught by the Lean Masters.

To help RSR in its transformation, the Lean Learning Center pitched in on the on-site training by bringing its Lean Experience airplane simulation exercise to the plants. This allowed every employee to benefit from this hands-on exercise, which clearly illustrates the importance of lean thinking and tools. Additionally, the Center helped RSR start Lean Learning Laboratories in selected areas, beginning with the Battery Recycling department at the Indianapolis facility. To get this going, each employee - whether salary or hourly -- had to help write and take photos of all the job function activities that occur in this department. These are then posted and analyzed in the "lab."

The labs consist of a combination of orientation meetings, on-site training, and post-training application and reflection. Module training is provided by a Lean Learning Center coach and subject areas include Scoreboards, Seven Wastes, Five S's, Standardized Work, Product Process Mapping, Problem Solving, Visual Management, Set-up Reduction and Pull Systems. Then, the people from the lab areas take the knowledge that they have gained and train everyone else. For example, Five S (sift, sweep, sort, sanitize, sustain) would be taught in the Lab. Everyone who was trained would then fan out to the plant floor and begin teaching some of the skills they acquired.

"Lean Learning Labs provide an excellent way for people to learn lean in bite-size chunks," comments Carlino. "And, they also represent a great opportunity for using visual tools such as 'Lean Learning Lab' banners and documents, which clearly illustrate what each department is trying to accomplish."

Keeping people inspired

To encourage all the employees to remain committed to the company vision, RSR also runs a program called "What Does Good Look Like." They take people on field trips to plants that have excellent lean programs, such as the Toyota plant in Georgetown, Kentucky. "We've taken about 35 percent of our workforce on plant visits to date, but our goal is 100 percent," says Finn. "We find that people who can see these facilities, experience what we've come to call 'awakenings'."

"Additionally," adds Finn, "RSR has monthly/and or quarterly JTE Reviews. This is where we discuss issues and bottlenecks that are keeping us from reaching our ideal state." Communication is key. RSR publishes a monthly newsletter called the RSR Journey to Excellence, which shares recent successes and current endeavors throughout the organization.

"Lean transformation starts with a change in the way everyone thinks about what they do, how they do it and why it matters," says Jamie Flinchbaugh of the Lean Learning Center. "RSR understood this concept right from the start, which is critical to the program. And, using a systematic approach of implementation will help them sustain these results."

Finn says the majority of his highly-tenured staff know what RSR is trying to accomplish. But, he admits "We've had to make some tough choices and even let a few people go who were not committed to the company's direction. What you have to do is remove any negativism - you can't have people out there dropping bombs or poisoning the environment. You have to get people involved . . . such as in a kaizen event so that they can actually experience a success and see what is happening."

Employee buy-in is pretty high. Since starting this program, Finn says the company implements about 65 percent of employee suggestions that are made.

The results are rolling in

Viewing the lean transformation of RSR as a continual journey, Finn insists they are just infants in this process, but the results would say more.

The Battery Recycling department, which was the site of the first Lean Learning Lab, developed a way to used recycled water on its rotating sieve or trommel, reducing cost by $4,000 per month.

The Water Quality Department, which has four pressure filters designed to remove suspended solids from the clarifiers, has experimented with different sand filter mediums to discover potential ways of reducing cost. After a well-documented study, the department was granted permission in 2003 to switch to alternative materials as a filter, saving the company $8,784 to date. As of May 2005, the Indianapolis facility had documented $220,000 in total savings for the year.

A major initiative has been started to develop a totally paperless office. This is a huge job, so as in other lean programs within the company, it is being rolled out methodically starting with the purchasing department. All the pre-printed formats at the plants and at corporate have been converted to laser generated forms. Additionally, a paperless purchase order process was analyzed where it was realized that the old "paper" PO process cost $42 pre transaction; the new paperless way, $12. Based upon annual volume, this could result in a savings of $850,000.

Beyond profitability to survival

"We have to get better," says Finn. "We are basically in a fight for our lives against third world countries. And clearly, the growth rate in this industry is not very high. We have cases where we know that the Chinese ship products to people not more than 50 miles away from our plant cheaper than we can do it. This is about job preservation."

"What people need to understand about implementing and sustaining a lean transformation program like this is that it does not happen overnight. It takes perseverance and a bit of courage. Take that first step and if things go bad, then learn from it. The mistake is to look behind you and say I can just turn around and run back down that hill and everything will be just like it was. Eventually the market will turn on you or the business will not survive because you're just not heading to a higher level."

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