5S - To be or not to be

Sometimes back, in the bustling operations of a manufacturing company, a team of enthusiastic employees were embarking on a mission to implement #5S. They were guided by the principles of organization, efficiency, and improvement. Leading the charge was Rahul who was ?and the operations manager, who firmly believed that a clean and streamlined workspace was the key to success.

As the team reached the first step of 5S, #Sorting, they began to assess the factory floor. Old machines, unused tools, and piles of outdated equipment were scattered across the space. Rahul declared, “Let’s sort these out! Anything that’s not useful or essential must go. Only then can we achieve true efficiency.”

The team enthusiastically started marking items for removal, but soon, they hit a roadblock.

In the corner office, sat Mr. Gupta, the meticulous finance head. When Rahul approached him with a list of obsolete items to be discarded, Mr. Gupta adjusted his glasses and frowned. “Rahul, these machines still have a book value in our accounts,” he said firmly. “We can’t just throw them away! They are still considered assets.”

Rahul was puzzled. “But Mr. Gupta, these items haven’t been used for years. They take up valuable space, and some are even rusting. Surely, it’s better for the company to free up this clutter?”

Mr. Gupta sighed and leaned back in his chair. “Rahul, I understand your perspective. But from a financial standpoint, it’s not that simple. You see, every piece of equipment here is recorded in our books. Even if it’s no longer in use, it has a depreciated value. If we dispose of it without proper documentation or write-offs, it will create discrepancies in our financial statements. It could even raise questions during audits!”

Rahul scratched his head. “So, you’re saying we can’t get rid of these unless we officially write them off?”

“Exactly,” Mr. Gupta replied. “And writing them off isn’t easy. It requires board approval and proper justification. Plus, reducing our total assets on paper might not look good for investors.”

Rahul realized the gravity of the situation. On one hand, the cluttered workspace was hindering productivity. On the other, financial rules and procedures couldn’t simply be ignored. It was a classic dilemma—efficiency versus compliance.

Determined to find a solution, Rahul gathered the 5S team and proposed a plan. “We need to work together with finance. Let’s conduct an asset audit to identify which items are truly obsolete. We’ll document their condition and demonstrate how keeping them is costing us more in space and inefficiency.”

The team worked tirelessly, listing each unused item, its age, condition, and the impact of retaining it. They presented their findings to Mr. Gupta, who appreciated their effort. “This is exactly the kind of data we need for a proper write-off process,” he said.

Next, Rahul and Mr. Gupta proposed a joint policy to the senior management, streamlining the procedure for removing obsolete items. The new policy allowed the finance team to write off certain items more efficiently, provided there was clear justification and operational backing.

With the policy in place, the 5S team finally cleared the workspace, discarding outdated machines and equipment responsibly. The factory became more organized, safer, and efficient. And Mr. Gupta, once seen as an obstacle, became a trusted ally in the 5S journey.

This not just a story but the real life experience of my team when we were implementing 5S as a part of lean initiative in a mid-sized manufacturing company.

Learning is whenever we are going for any ?#improvement or #kaizen initiative, do involve finance in the beginning itself. Collaboration and understanding between operations and finance team can turn roadblocks into stepping stones