Lean Management at Hertz Car Rental – exemplified by the Service Centre of the Düsseldorf Airport
Hertz is the world’s leading car rental company with more than 7,900 branches in more than 150 countries. In the course of a worldwide transformation process, which included, amongst other things, the implementation of Lean Management in all branches and on all levels of the business, an appropriate training schedule for all German employees as well as an inspection and reorganisation of business processes by means of Kaizen events (a weeklong course) was introduced. In Hertz language, Lean Management is the “Hertz Improvement Process”, short HIP. Project manager for Germany is Business Unit Manager Joerg Feldheim. Christina Weber took over in August 2008.
Hertz Car Rental GmbH started the Lean implementation process in April 2007 at the Frankfurt Airport, followed by the large airport sites in Munich, Duesseldorf, Hamburg, Stuttgart, Berlin-Tegel, Hannover and Frankfurt-Hahn. Selected employees from all levels of the head office and operations were subsequently trained, and model projects were conducted in selected city offices in Hannover, Berlin, Aachen and Nuremberg. The aim was to train a wide base of employees to implement the philosophy of Lean Management in the business.
Current State
The following business case describes the implementation of the Lean principles at Düsseldorf airport in 2007 for the sub-process of car preparation. With close involvement by the branch management, branch employees, external service provider, the business unit manager Bernd Kiel, and the area manager and regional Lean coordinator Torsten Schreiter, a complete value stream mapping of the overall process of returning the cars by the customer, car preparation at the Hertz Service Centre, and car rental to the next customer, was carried out in a first step during the training week. An important step in analysing was the visualisation of the process and the subsequent, training recognition as to which processing steps add value and which, if looked at through Lean-glasses, do not add value in the sense of benefit to the customer.
Image 1: Value Stream Mapping Hertz Duesseldorf Airport
In the weeklong Kaizen event, carried out for the sub-process of car preparation, a detailed analysis has been carried out based on this overall picture. This showed that
- a large part of the movement of the cars on the Service Centre car park does not add value (unnecessary transport = waste);
- cars are being prepared that have not been requested by customers for the next hour (overproduction = waste);
- cars that were booked by a customer were sometimes not at all, not early enough or only after several telephone enquiries prepared by the employee at the rental desk. This resulted in a quarter of all customers not receiving the car category they had ordered (inadequate customer focus);
- cleaning of the cars sometimes takes very long (an average of 15 minutes per car). (Waiting time = waste);
- some cars had to be cleaned several times because they had been kept in the car park for too long after they had already been cleaned, thus becoming dirty again (over-processing = waste);
- waiting times resulted from the shift manager of the external provider being the only authorised person to move the car within the Service Centre (waiting = waste). These managers had to travel many kilometres each day for this purpose (travel = waste).
Another more detailed investigation using the 5-Why-Method (i.e., ask “why” so many times until the main cause of the problem is discovered) showed that the root cause of the inadequate supply of cars lies within the way the car preparation was organised. This, in turn, was connected to the Service Centre’s organisation of the car park. Both causes were confirmed through intensive onsite observation of the processes (Gemba) and in cooperation with the external service provider for the preparation of the cars. The actual movements in the car park were recorded and further analysed by means of so-called spaghetti diagrams. These highlighted the fact that there was no standardised organisation according to the different car categories. Besides, every single car was prepared, whether it was actually needed within the next few hours or not. The cleaning of the cars itself was carried out without applying certain standards and took place in a dirty, rather messy, cleaning hall.
Example images of the current state:
Image 02: Already cleaned cars, parked randomly in bad weather conditions
Image 03: Shift manager of the service provider on one of her long errands
Image 04: Missing standardisation in the parking of cars
Image 05: Spaghetti diagram for an in-depth analysis
Image 06: Washing hall
Image 07: Missing standardisation the preparation of cars
Future State
A future state was designed and discussed with everyone involved in the project from the observation of the current state and developed using the Lean Philosophy and the principles derived from the Toyota production system (best quality at lowest cost with the shortest possible processing time, taking into consideration high safety and a high employee morale – by eliminating elements that do not add value), of which everyone involved in the project was aware of by that point.
This future state consisted of a new fundamental approach: Only cars that have been booked will be prepared. A new car category-oriented car park organisation was also developed. The required cars can therefore be identified and prepared in the correct order. Standards for a synchronised car preparation were developed, which led to the average cleaning times being reduced by 50%. Revised driving and parking directional signals were created for the car park.
Rapid implementation steps via 5S-measures
The previously taught Lean Instrument 5S (sort, set in order, shine, standardise, sustain), was applied to the daily routine. The first measure was the reorganisation of the car park: All parking spaces were marked with white paint (there were no markings before) and a flexible orientation system was introduced for the allocation of the car categories to their respective parking spaces for the drivers. The new system was also tested with the employees and accepted as the new standard. This included explaining to the relevant staff that the booking list is the basis for the order in which the cars are to be prepared.
At the same time, the hall where the cars are prepared was cleaned and reorganised: Anything unnecessary was removed; everything necessary was located where it is easier and faster for staff members to access. The standard developed for the cleaning of the cars was inspected, tested and improved by staff members during the daily routine.
Results
| Key Measurements | Baseline | Achieved |
|---|---|---|
| Failure demand: wrong car category for client | 23% | 15% |
| Time Washing/ Cleaning per Car | 15 min | 8 min |
| Standard Work | No standard work | 90% standard work |
| Rework Parking | 20% | 2.5% |
| Trigger for washing and cleaning | All cars | on demand |
| Structured Parking | 50% | 90% |
Example images after the transformation:
Images 08 and 09: Structured parking according to categories
Image 10: Standardised and synchronised car preparation (one car each at the filling, interior and exterior cleaning/washing stations)
Image 11: Optimal location of the car for the cleaning and synchronised car preparation
Images 12 and 13: Washing hall after 5S measures (visual management and short distances)
Images 14 and 15: New, definite and hazard-free organisation of the driving direction in the car park
Sustainability
After the intensive Kaizen week, which included important employees and management, it was necessary to inform all other staff members of the new procedures and to train them in the new standards. The Kaizen participants performed this task. Further improvements and optimisation from ideas by other employees could be carried out in subsequent weeks and months. This created a culture of continuous improvement. Much of the success of the new system is due to the intensive commitment to this issue by the Business Manager, Mr Kiel, and the regional Lean Coordinator, Mr Schreiter. Without the daily checks and persistent adherence to the new principles, the old habits would have crept back in after temporary improvements. Thus, the new system became the new standard of operation. This success was also an incentive for further Kaizen events. The communication with external service providers was further improved so that problems could be structured and solved quickly. Hertz management also applied the positive experiences with Lean to help develop the new parking deck of the Rental Centre at the Düsseldorf Airport. It is still in the planning phase.
This business case is only a small part of the Hertz Improvement Process (HIP) to implement lean at Hertz Car Rental. All car rental and car return processes have been optimised. Also the internal processes were scrutinised and optimised by applying lean. As a result, customer satisfaction has improved considerably. And worldwide cost savings and turnover increase have become possible.
Christian Lucke from TAKT supported Hertz Car Rental in Germany during the introduction and implementation of Lean Management. His colleagues guided Hertz in other European countries.