Entrepreneurship and improvement journey from A – Z
Entrepreneurship and improvement journey from A - Z From a small shop to a sole proprietorship
What will 5S deliver? These are the benefits of 5S
The 5S method helps companies work more safely and efficiently. This proven method of workplace organization is recognized worldwide as the standard for the ideal and most efficient working environment. Applying 5S within your organization offers several advantages.
On this page we answer the most important question: what does 5S deliver? We do this on the basis of an explanation of 5S activities that you can apply within your organization. In addition, we have show various illustrative calculations and Return-On-Investment examples for you.
The advantages of 5S at a glance:
√ A safe working environment
√ Less waste
√ Work more efficiently and effectively
√ A tidy, neat workplace
√ More employee happiness
√ Higher profitability
The key benefits of 5S for your business
At the top of the list of benefits of 5S is of course Safety and thus the prevention of accidents in the workplace. In addition, the 5S Methode contribute daily to the reduction of wastes. This automatically provides an advantage that contributes to effective and efficient working. Although it can sometimes be difficult to determine these savings and optimizations exactly, we offer you an (incomplete!) overview below in which areas 5S strengths your organization.
Safe working conditions and safe handling
• Extinguishing tools are easily accessible
• Emergency exits not blocked
• Employees with the correct personal protective equipment (PPE)
• Use of approved tools
• Compliance with safety requirements
Efficiency
• Efficient layout and walking routes reduce unnecessary distances
• Matching stock to supply and demand
• Less waiting time for products and employees
• No overproduction due to visual (pull) mechanism
• Logical (ergonomic) workplace layout, less unnecessary movements
• Flexible workplace layout, including supply of material (fit for purpose)
Less storage of materials (reduction of working capital)
• Insight into stocks and age
• Logical place for usage
• Right amount of materials
Work more productively due to a good 5S implementation
At a good 5S implementation rises the labor productivity. A component that is of great importance to many companies, especially in these times. The challenges in the labor market make it difficult to find new employees. The 5S method ensures that you get more out of your people.
Are you curious about what 5S can bring to your company? 5S Company is happy to perform a 5S baseline assessment for your business to determine the potential yield and optimization score of implementing 5S within your organization. This zero measurement can also take place in combination with the 5S Activation package of 5S Company. This 5S starter package is an accessible, affordable introduction to 5S for your company, with which you start a 5S pilot in one selected department.
Below we have some practical examples of 5S implementations and the results of these 5S rollouts. We also outline an insightful picture of the Return on Investment (ROI) for applying 5S on a production line and within the maintenance department.
Illustrative Calculation
If we implement 5S, we realize that employees will have to search less for materials and tools. We also set up better visual control points during the process. Below we have a number of experience figures. These of course do not apply to every organization, but are conservative rather than exaggerated.
A) Searching for material costs more than you think. Suppose:
- 50 production workers:
- Each employee has 15 minutes of search time per day = 0,25 hour
- 230 workable days per year
- Internal costs per hour € 30,-
Then potential is: 50 employees x 0.25 hours x 230 days x €30/hour = €86,200 labor costs
Because the search returns on a daily basis and often happens to everyone, some more than others, this adds up to a large cost item. The adverse effect of searching, apart from these labor costs, is that you lose productivity. After all, when you are searching you can do little other work, sometimes we see that even a production line can start structurally later after a change (of shifts or product). Loss of production (turnover) of course also costs money!
This also increases the costs per product, since you divide the total sum of costs by fewer products.
This unproductivity means that if you still want to achieve the desired output, you have to use more capacity (50 x 0.25 x 230 = 2870 hours). However, capacity is currently very scarce, additional overhead ballast and costs of recruitment, onboarding, administration, etc. should also added.
B) Matching material to demand
In a good 5S environment, balanced min-max is also used, with the aim of ensuring that the materials needed in the process are available in time. Including a timely replenishment signal (=kanban) with sufficient time (calculated) to replenish in time.
If, on the other hand, you only find out that something is not there during production, it usually takes a few minutes until things are replenished. With a conveyor belt, this often means that the entire belt is at a standstill, this does not only cost production. But the quality also goes down, employees lose their rhythm, which increases the chance of errors.
Suppose the situation is:
- 50 workers in production 10 lines of 5 people per line
- Each line is stopped for 2 minutes 10 times a day due to shortage of materials or tools (= 20 minutes per line per day)
- 230 workable days per year
- Internal costs per hour € 30,-
Then potential is: 10 employees x 5 lines x 20 min per line/day x 230 days x €30/hour = €115,000 labor costs
Recurring benefits
In both realistic cases there is a lot of potential to improve, let 5S reduce 50 – 75% of this waste in the first phases, that is annually recurring benefits. In addition, 5S activates further improvement to perform the basic work (apart from the search) more efficiently. Achieving an improvement every year that yields 10 minutes a day every day is an enormous efficiency boost. 5S is often a start for further process improvements!
We can analyze in a simplified way and give an indication of the time wasted in your processes. With this, a Return On Investment (ROI) calculation can be made fairly quickly.
Return on investment - Example at production line
5S Company performed a full 5S implementation at a customer with production lines. The parts on these lines are made and assembled per batch. Each series has its own parts and specials. 5S has made a major contribution to changeover time reduction or SMED. Ensure that the right materials are available completely and on time and make this visually visible.
During the implementation, we looked at preventing waste, creating flow and working more pull-oriented (building based on customer request instead of building from stock). Employees waited less, switched batches more quickly (assembly changeover times and supplies) and had less repair work. Due to shorter changeover time, a smaller batch size can also be used.
The complexity of the product has increased extremely in recent years due to product innovations that the market demands. This has made the assembly process much more complicated, and the volume has also increased by 20%! However, this happens with the same number of employees and in the same space. Productivity per employee has increased by 10% as a result.
50% + CUSTOM MADE
By making adjustments to the delivery and assembly, more complex customer questions can be met
10% + Efficiency
By organizing the workplace in a smarter way, employees can perform their work more efficiently
20% + Output
By creating flow and a first time right process, 20% more output has been achieved
0% + Space
All these changes cost 0% more space and provide more free space in various places on the work floor
Return on investment - example in maintenance
Where maintenance is mainly a service, a calculation can also be made here in the benefits of 5S. By applying a full-fledged 5S implementation within the maintenance department of a large process industry factory, the search for material has been reduced and the 'hands on tool' time has increased. As a result, there is less machine failure, resulting in a higher machine availability. In addition, we performed 5S with the operators, resulting in less waste and more output realization. In addition, a better visual process has ensured that better visual entry control can take place, so that the quality of the raw materials that are processed has improved significantly.
All this results in a better OEE (Overall Equipment Effectiveness) and significantly improved financial returns.
-70% search time
Clear where in the installation and where the required material is located, and which tools are required.
10% + Efficiency
By organizing the workplace in a smarter way, employees can perform their work more efficiently
10% + Output
Higher hands on tool time means that more work orders can be processed. Higher OEE Overall Equipment Effectiveness (OEE)
+ Quality
Improved visual entry control greatly improves the quality of the processed raw materials
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