People Are the Key!

Mark A. Gossoo

Senior Industrial Engineer

CMS Consulting Group, Inc.

Mendon, New York, USA

Abstract

Companies often underestimate the importance of involving the entire workforce in a lean conversion. This case study examines one company that did almost everything right. They abandoned their traditional methods in favor of lean techniques. Traditional department supervisor and operator roles were replaced by teams and team facilitators. The teams were given full responsibility in the areas of waste reduction, visual controls, setup reduction, and Total Productive Maintenance (TPM). Management supported and encouraged them all along the way. The teams’ first year results included a $550,000 reduction in waste and a 75% reduction in changeover times.

Keywords

Teams, setup reduction, documentation, empowerment, employee involvement.

1. Introduction

How can you ensure the success of your lean implementation? Get everyone involved! In his 1986 book Kaizen, Masaaki Imai refers to the three building blocks of business: hardware, software, and “humanware” [1]. As consultants, we often work with companies that have been unsuccessful converting to a lean environment. We frequently find that these companies paid considerable attention to hardware and software issues, but the “humanware” aspect was an afterthought. By focusing too much on the tools and techniques (Kaizen events, 5S, Kanban, etc.), they overlooked the importance of involving the entire workforce. These companies may have had some early success with Kaizen events, but the improvement process stalled.

In most of these cases, the depth of culture change needed to implement lean was greatly underestimated. Lean is often viewed as a silver bullet that will quickly solve all a company’s problems. In fact, it is an ongoing process that requires major changes in organizational structure and company culture. Accomplishing the transition to lean hinges on including people in the process. Management, support functions, and hourly personnel are essential elements in the equation, and unless all of these groups are on board and actively involved, the process will grind to a halt.

While this may seem obvious, our experience has shown that many companies fail to attach enough importance to the people aspect, or don’t get various functions involved to the proper degree. The following case study illustrates how one company avoided these mistakes while becoming lean.

2. Background

A snack food manufacturer began experiencing increasing price competition during the mid-1990’s. Plant management recognized that they needed to substantially improve the operation and that current production methods were not effective. Scrap and waste were high, mistakes were frequent, and line changeovers took as long as two hours. The plant was organized along a traditional structure with supervisors and limited authority delegated to production workers. There was little process documentation and operator training was uneven and inconsistent. The product’s seasonal nature required a large temporary workforce for several months of the year. Lacking training and with limited guidance, these employees often walked off the job after a day or two. The recent sell-off of another product line had left morale low and the workforce was uncertain about the future.

3. Management’s Role

It all starts (or ends) with top management. The transition to lean demands a significant culture change that must be supported by top management in a number of ways. In traditional manufacturing, people expect to be told what to do, when to do it, and how it should be done. The traditional company has many levels of management, each with varying goals, expectations and philosophies. Communication throughout the organization is fragmented, and people hoard information to protect their own interests.

Successful lean conversions need strong top-down leadership, especially at the beginning of the process. To support their people in achieving lean, management needs to do several things:

1. Provide the vision so that everyone in the workforce understands the reasons for change

2. Create the correct organizational structure

3. Help create and support culture change

4. Share information regularly

5. Provide incentive and recognition for employees’ efforts

6. Establish appropriate performance measures in terms people can relate to

7. Visibly display their commitment

8. Follow-up on improvement measures regularly to prevent backsliding.

9. Ensure new procedures are in place to support the changes (Kanban, etc.)

10. Train everyone

11. Furnish adequate resources

12. Resolve issues quickly

13. Step back – let them do it!

14. Recognize that change won’t happen overnight

In this case, plant management decided to try a new approach based on lean methods being used successfully by a sister company in England. In preparing to make changes, management quickly realized they needed several things to ensure success.

First, the existing organizational structure would have to be changed to support a lean philosophy. They chartered operating teams for each product line. The old production supervisors were reassigned as facilitators for the operating teams. An operator was selected from each shift to serve as team leader for each line. A new staff member was brought in to focus on the development of the teams.

Second, a heavy investment in training the workforce was necessary. Initially, three teams were assembled to address specific issues on the production lines. These cross-functional teams were comprised mostly of hourly workers, and both shifts were represented. Each of the teams received hours of training in several areas, including basic skills, lean techniques, team building and problem solving. Eventually, additional teams were added and new members were introduced to maximize workforce involvement.

Third, outside help was needed to support management in their new roles as team facilitators and coaches. CMS Consulting Group was selected to work with the company and facilitate the improvement teams. With these three elements in place, performance measurements were established and the teams began their work. Company-wide meetings were held to share the vision and explain changes to the workforce.

3.1 Changing the Culture

At first, progress was slow. Team members weren’t sure what was expected of them and were hesitant to participate during team meetings. A typical example of the attitude of the workforce was the maintenance electrician who sat through a meeting with his arms folded and a bored look on his face. When asked what he thought of the new processes being initiated, he responded, “I don’t know. No one’s ever asked me what I think before.” After years of being told to check his brain at the door, he had no idea how he could contribute and no incentive to do so.

The other cultural obstacle was the deep-rooted tradition of finger-pointing. During one of the early brainstorming sessions, the team was identifying problem issues in one production area. The machine operator and the maintenance mechanic responsible for the area began blaming each other for the problems, until they were red-faced, shouting, and ready to get physical! It’s impossible to work together when you can’t even sit in the same room together.

The initial tasks of documenting the existing processes took longer than anticipated, and the teams became frustrated with the lack of progress. Rather than drop the ball, management stepped up and reinforced the importance of what the teams were doing. In spite of being nervous about how things were proceeding, the plant manager frequently attended meetings and encouraged the teams to continue the good work they were doing. Privately, he expressed concerns to about the lack of progress, but we encouraged him to persevere. Shortly thereafter, things began to improve. One of the measurements the company used to gauge progress was the net improvement in scrap and waste losses compared to the money invested in training, teams, and outside consulting assistance. Figure 1 shows the dramatic improvement that began once the new culture began to gain momentum.

4. Support Functions

The most frequently overlooked areas in a lean implementation are the support functions. Sales, Customer Service, Engineering, Order Entry, Purchasing, and all other support functions can make or break the lean initiative. Companies often spend too much time on shop floor improvements without appreciating the bigger picture. As a result, islands of lean may be scattered throughout the organization, but no real gains are ever made. Often, these are the areas that need lean the most and should embrace it; instead, they feel threatened by the conversion and drag their heels to prevent the loss of their power and control. This is why it is critical to get them involved in implementing the tools.

Shifting maintenance’s role to a TPM-oriented function is often a difficult task. Maintenance mechanics traditionally function as the hero who rides in and saves the day when the machine goes down. Suddenly, they find that they may be doing more mundane preventive tasks.

In this case, the importance of the maintenance function was recognized, mainly because maintenance represented some major productivity issues. The maintenance group needed a major overhaul, and the steering team decided to eliminate the maintenance department as they knew it to encourage the move to TPM. Ten maintenance people were responsible for building and utilities, preventive maintenance, reactive maintenance, and line changeovers. Operators were not involved in any maintenance activities and often needed a maintenance mechanic to make routine operating adjustments to the machines. Changeovers or major breakdowns were viewed as bonus break times for the operators. As part of the restructuring, seven of the ten maintenance mechanics were reassigned to fill key positions on the line as technicians, where they were available to quickly respond to problems and minimize downtime.

The team responsible for reducing changeovers began by documenting the current state. Almost immediately, people became aware of some wasteful practices, and they couldn’t wait to begin making changes. First and foremost, they realized they were not efficiently utilizing manpower. By accepting the paradigm that changeovers were the responsibility of maintenance, no one ever examined the possibility of equipment operators being part of the process. The team analyzed the changeover tasks and identified many that operators could perform with little or no training, leaving the experienced mechanics free to concentrate on the more complicated equipment.

The team broke into subgroups to evaluate the changeover processes for individual pieces of equipment and identify ways to simplify the process. They developed color coding systems, jigs and fixtures, and written instructions with visual aids. The end result was that line changeovers that previously took up to two hours were reduced initially to half an hour, and eventually even further. Similar activities were pursued with quality, material management, and other functional groups.

5. People are the Key

Production employees are often maligned and accused of being the main cause for poor productivity and low quality in American manufacturing. However, the underlying causes are almost always management practices, organization, and compensation strategies [2]. Given the opportunity, most employees will rise to the occasion. The key is to get them truly involved in the process. This means more than just asking for their input. Management must act on it in order to begin to establish some trust. Trust does not exist naturally in the workplace and is a highly perishable commodity when it does exist [3]. In addition to establishing trust, there must be a change in the mindset that management and engineering will solve all the problems. If you promote this mindset, employees in other areas will be more than happy to stand back and let you do it.

Management must encourage the workforce and support them when they take on new roles such as TPM, data recording and analysis, problem solving, source inspection, and other indirect duties. For many employees, this is a drastic (and frightening) change. Show them their opinions matter, give them the tools and training, and then get out of the way!

5.1 Overcoming the old ways

Even for this successful company, the early stages were slow and painful. People who for twenty or even thirty years had been told to check their brains at the door were now being told that they were responsible for making major improvements in the way the company worked. Fortunately, management developed ways to encourage employee involvement and teamwork. First was a formal program that urged employees to voice their ideas and rewarded them for exceptional participation. Second, management took every opportunity to reinforce the team concept and train people in teamwork. Third, they looked at new methods for team-based compensation.

After the initial growing pains, the teams began to achieve significant progress, as Figure 1 illustrated. The process improvement teams were primarily comprised of hourly employees, most of whom had never worked anywhere else. Once people saw that management was behind them and would allow them to try things, some remarkable things began to happen. As the teams spent time documenting the current state, people gained an appreciation for what other people’s jobs entailed. At one of the monthly steering team meetings, the line operator who had nearly gotten into a fistfight with the mechanic stood up and said, “I would just like to take back everything I have ever said about maintenance.” Talk about a culture change!

As they progressed, they became more energized. Management posted some whiteboards so performance measures could be updated daily for each operating team. As the numbers began to improve, friendly competition developed among the teams to see who would set new performance records.

5.2 Empowerment leads to success

One of the areas that needed improvement was training. A particular machine, where the food was put into the package, was regarded as difficult to operate and often required maintenance intervention to maintain proper fill weights. Only a few people in the company were able to run this machine, and others did not want to learn. The team decided to develop its own training program. Building from the existing documentation, they drew flowcharts, took pictures, and wrote a complete operator’s manual for the area, including operating procedures, troubleshooting, maintenance, and changeover. To be sure that potential operators would be adequately trained, they developed their own training course, which was taught by the operators themselves. They included a quiz at the end to ensure that the material was understood. All of this was done by hourly employees, many of whom never finished high school. They did it with virtually no help from anyone outside their team.

5.3 Success breeds success

While developing the training program, the maintenance technician shared his knowledge of how to adjust the equipment properly to maintain proper fill weight. The “experienced” operators began to understand how the machine was supposed to operate, and as a result, they learned how to adjust it properly. Instead of placing a call to maintenance and then heading for the break room, they worked side by side with maintenance to learn what to do. After a few weeks, the technicians were no longer being called to make routine adjustments to the machines. From there, the team wrote further instructions so the operators could perform routine preventive maintenance as part of the overall TPM initiative. Soon, the maintenance manager was reporting that line operators were badgering him for their own grease guns and other tools.

5.4 The Happy Ending

Over the course of the first year, the project realized a $550,000 reduction in scrap and waste costs from the previous year. Their investment in training, labor (all team meetings were held on an overtime basis at time and half pay!), consulting, and capital equipment totaled $300,000 in the first year, resulting in a net bottom line improvement of $250,000. Several years later, the team concept is firmly in place, and the plant continues to improve and prosper. The site has now become the flagship plant within the corporation for the implementation of lean techniques. Almost all the changes originated from the teams of hourly people; the plant had no engineers on site, and only limited access to corporate engineering resources.

5.5 What Went Right

So what were some of the factors that made the project a success? Management committed to the change, developed a clear vision, and communicated it effectively to the workforce. Recognizing that the people could make or break them, they invested very heavily in up front training. They saw the need for organizational changes and made them early on, and brought in outside resources to support them where they were weak. Then, they allowed the teams to flourish, encouraged them often, removed roadblocks, and gave them time to learn. Measurements were developed that put the improvement in terms that everyone could understand. (Each minute of downtime translates into this many lost packages of product, each lost package of product translates into this many dollars, etc.) A steering team kept track of all the activities going on and ensured that the various teams were working toward a common goal.

6. Conclusion

Translating the vision into reality is a major challenge. While lean conversion requires companies to effectively implement 5S, Kanban, and other tools and techniques, the most important lean tool to remember is an organization’s “humanware.” It’s up to management to provide the proper vision and leadership. As Tom Peters said, “They watch your feet, not your lips.” Then give them adequate resources, encourage and support them at every opportunity, provide some rewards and recognition, and your people can do almost anything!

Biographical Sketch

Mark A. Gossoo is a Senior Industrial Engineer with CMS Consulting Group, Inc., in Mendon, New York. Mark holds a BSIE and an ME in Engineering Management, both from Rochester Institute of Technology. He has been helping companies implement lean principles and build strong teams for the past nine years. He has been an IIE member since 1986.

References

1. Imai , Masaaki, 1986, Kaizen, the Key to Japan’s Competitive Success, McGraw-Hill, New York.

2. Costanza, John M., 1996, The Quantum Leap in Speed-To-Market, Third Edition, John Costanza Institute of Technology, Inc., Denver.

3. Levering, Robert, 1988, A Great Place to Work, Random House, New York.

4. Byham, William C., Wellins, Richard S, and Wilson, Jeanne M., 1991, Empowered Teams, Jossey-Bass, San Francisco.

5. Martin, Don, 1993, TeamThink, Penguin Books, New York.