TBM Article

8/3/2019 TBM Article

1/24

MANAGING

Q1.11

S h a r i n g S o l u t i o n s f o r Y o u r L e a n J o u r n e y

TIMES

It Takes a Villageto Catch the Rain

Vermeers LeanProcess MethodsSupport GreenMovement

2

Leader at ArmstrongWorld IndustriesPrepares for MarketRebound

5 8

Sigma Electric Beats Low-Cost Competitors with Focus on Service


2/24

The most important and recognizableplayer in American football is the quarter-

back. The offense must execute the coachs

play calls, yet the quarterback must be able

to improvise based upon the defensive

strengths and weaknesses to move the ball

down the field.

Like any leader, innate talent, training,

and experience contribute to a quarterbacks

success. But he wouldnt be able to do any-

thing without the rest of the teams adher-

ence to discipline and process excellence.

Such attributes enable the best teams to exe-

cute with consistency, to be responsive, andwin championships.

In this issue of Managing Times, I

noticed a similar theme among our feature

stories: Lean is playing a pivotal role by

providing a platform for improvement,

achievement and sustainability that support

the vision and passion of talented leaders

that were proud to work with.

TheWatershed Organisation Trust

(WOTR) in India is using lean to introduce

productivity-enhancing and waste-reducingprocesses that increase water levels, improve

crop yields, extend the availability of

drinking water, and convert wasteland to

viable farmland.

Vermeer Corporation, a long time lean

champion, is using lean process improvement

methods to reduce landfill waste and encour-

age recycling. The company has leveraged

lean to embrace environmental stewardship.

Read the article to learn about the seven

green wastes.In Leadership Insights, Don Maier,

Senior Vice President of Global Operations

and Supply Chain atArmstrong World

Industries talks about their lean transforma-

tion and preparation for a housing market

rebound.

PUBLISHERSNOTE

Sigma Electric has leveraged lean to

transform itself into a highly competitive

organization. They operate in a low-cost,

highly commoditized market and now com-

pete with a differentiated model that offers

high quality, flexibility and responsiveness.

As a result, the company is growing at a 20

percent compound annual rate. They have

remained price competitive by containing

costs and keeping high-value knowledge and

production assets in India. Theyve become

a problem solver for customers while main-

taining a low-cost structure.

Be sure to congratulate the team at

Milbank Corporation in Kansas City. The

electrical meter socket manufacturer was

recently awarded the TBM Perfect Engine

Site Award for its commitment to lean

excellence in manufacturing. Since 2007,

Milbank has liberated cash and space allowing

it to invest in a new alternative energy

solutions business that will ensure growth

and differentiation well into the future.

Operational excellence plays a pivotal

role in helping each of these organizationsto differentiate, grow and serve their

customers and constituencies. I was certainly

inspired. Ready. Set. Hike! Lets make 2011

a winning year.

Anand SharmaCo-founder & CEO

TBM Consulting Group, Inc.

[email protected]

You Are the Quarterback. Lean is the Game Plan.


3/24

A publication ofTBM Consulting Group

4400 Ben Franklin BoulevardDurham, North Carolina 27704800.438.5535 www.tbmcg.com

PublisherAnand Sharma: [email protected]

Executive EditorWilliam A. Schwartz: [email protected]

Managing EditorAngela Scenna: [email protected]

Featured ColumnistsCarl Deeley Gary Rascoe

David Drickhamer Anand SharmaJoe Panebianco Tonya Vinas

ContributorsTerry Butler Don MaierFred Earley Melissa Slater

Paul Hirt David Drickhamer

Art Direction and DesignIONA design

www.ionainteractive.com

PrintingCarter Printing & Graphics, Inc.

www.carterprintingnc.com

Published in Durham, NC4400 Ben Franklin Boulevard

Durham, NC 27704

TBM, the TBM logo, and LeanSigma are registeredtrademarks of TBM Consulting Group, Inc.

If you would like to receive this journal via email,send your vital information including email

address to [email protected]

On the cover: Precision casting and finishing is acore capability for Sigma Electric ManufacturingCorporation.

Mary Andringa, President and CEO ofVermeer Corporation was inducted into the

Iowa Business Hall of Fame at the Greater

Des Moines Committees annual Black Tie

dinner on December 9, 2010. Ms. Andringa

was honored for outstanding leadership and

contributions to business and community

development in IowaDave Johnson,

formerly of ConMed Corporation, is now the

VP of Global Operations and Continuous

Improvement at Steris ManufacturingAlso

at Steris, Rob Ledbetter has been named

the Director of Lean Manufacturing

OperationsJoe Gausditis, Site Engineering

Manager, will assume all responsibilities forthe development and rollout of all continuous

improvement activities at Zimmer in

Parsippany, NJTravis Jansen is now the

Lean Champion at Armstrong Industries in

Thompsontown, PADoug Shuffwas

recently promoted to Vice President Business

Transformation at Harsco Minerals. Doug

also co-presented a webinar with TBM

Consultant Gary Rascoe in August 19,

2010. The webinar title is Effective

Execution of a Business Process Kaizen and

can be found as an archived event on theTBM web site in the webinars section

Carlisle Corporation recognizes the following

new Carlisle Operating System (COS)

associates: David Nieto, Carlisle Food

Services, COS Site Manager in Chihuahua,

MexicoEric Hines, Carlisle Power

Transmission, COS Site Manager in

Springfiled, MODeb Walock, Carlisle

Industrial Brake & Friction, Global COS

Director

Congratulations to the following Lean

Certification Graduates from GEX in India:Bhavya Subbarkrishan, Sanjay

Ramachandra, Ganesh Rao.M,Vineet

Jain, Mallikarjun Vasanad, Kartick

Chanden, Bibhuti Bhusan Pradan, Mani

Sudhakaran, Ramachandran Gopal,

Kanchana, Kokesh Kumar, Karunanithi,

Nipun, Srivathsa, Karumbaiah

Congratulations to the following gradu-

ates of the TBM Lean Certification Program

LEANCOMMUNITYNEWMANAGING

Q1.11

TIMES

Managing Times | Q1.11

www.managingtimes.com

Leader course in the US: Mike Lyall, S

Williamson, Joe Cece, Tim Schmidt, a

Don Croteau of AccellentRobert Carm

and Mike Parkes from Owens Corning

Congratulations to the following gr

ates of the TBM Lean Certification Kaiz

Facilitator course in the US: Nathalie

Rajway-Tukwila, WA, Ryan Boyce-Tuk

WA, and Shawn Jutte-St. Augustine, FL

from Carlisle Interconnect Technologies

Kenneth Carmeron-Fort Scott, KS from

Carlisle Power Transmission Products

Robert Dodson-McDonough, GA from

Carlisle Tire and WheelAlan Pennells

Pontypol, Wales and Tom Hall-BloomingIN from Carlisle Industrial Brake &

FrictionMelinda Barbour and Ian Eck

from Carlisle Construction Materials in

Carlisle, PA

Congratulations to the following TB

Lean Sigma Green Belt Graduates:

Nicholas McCoyand Ray White from

Owens CorningScott Lancaster and

Todd Bullington from Hayward Pool

Products and Renee Smith from Sealy

Congratulations toAlbert Schottfr

WIKA Germany for earning his LeanSigBlack Belt Certification from TBM

TBM consultants Doug Bonner, H

Brown, Mike Serena, Nero Haralalka,

Jonathan Wheatley have earned an AAM

Certification in the FDAs Quality System

Requirements and Industry PracticeT

added two new members to its Board

of Directors: Ron Wince, President

and CEO of Guidon Performance

Solutions and Mark Gottfredson,

senior partner and board member of

Bain & CompanyNicky Fletcherrecently joined TBM as Marketing

and Business Development Manager

for the United Kingdom. Suman

Jasrai recently joined TBM as

Marketing and Business Development

Manager for India.


4/24

GIVINGBACK

2

The Watershed Organisation Trust(WOTR, www.wotr.org) works with villages

in drought-prone regions of India to restore

the water supply and reduce the need for

people to migrate to the cities during the dryseason. The non-profit organization provides

technical guidance and some funding. The

villagers provide the collective will and labor

to terrace and trench the land to catch the

rain when it falls during the monsoon.

The idea is simple: Increasing plant

cover, cutting fewer trees, diverting runoff

and slowing the flow of rainwater, allows the

soil to absorb more moisture. As a result ero-

sion is reduced, soil nutrients are retained,

the water table rises, and wells are less likelyto run dry. The benefits flow down from

there.

The first thing people do when their

watershed regenerates and their income goes

up is to take their kids out of the fields and

put them in school, one of WOTRs

founders reported in a November 2009

National Geographic magazine article.

Through 2009 WOTR had implemented

over 200 watershed projects in the states of

Maharashtra, Andhra Pradesh, MadhyaPradesh and Rajasthan, covering an area of

more than 350,000 acres. In comparison to

other non-profits WOTR has always been

very efficient in terms of how much of the

funding it raises goes directly to support

village projects.

Last year TBM Consulting Group

provided LeanSigma certification

training to some of the organiza-tions managers so they could

make it even more efficient.

Their objective was to increase

the assistance that they can provide

to villages without incurring any

additional expenses.



It Takes a Village to Catch the Rain

By Gary Rascoe, Senior Management Consultant and Trainer, TBM

GIVINGBACK

You think you have trouble getting some people in

your organization to get on board with your change

initiatives. What if you had to convince a whole village?

By Gary Rascoe

Senior Management Consultant and Trainer, TBM


5/24



Among other tools we taught them how to

create value chain maps and business process

flow maps for administrative processes in

order to identify wasteful steps and processes

that could be eliminated.

Over the years WOTR has learned that

the technical knowledge required to reshape

the land and improve the watershed is only

the beginning. For any changes to remain in

place from season to season requires cooper-

ation and careful attention to the social

dynamics of the farming villages. This is

where lean program managers and kaizen

promotion officers might learn a lesson or

two about building consensus to drive

sustainable change.

In this region of India water is usually

in very short supply during the months

before the monsoon arrives in June, which

causes families to migrate or to wait for the

government to send in tanker trucks of

drinking water. Besides the obvious impact

on family cohesion, the forced migration has

a negative impact on access to healthcare

and childhood education. WOTR helps

solve this problem at the beginning of a

project by paying villagers a modest wage to

stay home and move dirt around for three to

five years. As attractive as such an offer

might be, it comes with a number of condi-

tions.

First, WOTR will not begin a project

without the agreement of everyone in the

village, including women and members of

lower castes who are ordinarily excluded

from such decisions. Another requirement is

that villagers must have a personal stake in

the success of the project in the form of

sweat equity. WOTR pays people for 80

percent of their hours worked and every

family is required to contribute free labor to

the project. In addition, to give plants the

opportunity to recover and grow, the villagers

must agree to stop free-grazing cattle and

not cut down any trees.

In addition to the farming benefits,

WOTR simultaneously works to improve

the cleanliness of the drinking water, which

can dramatically reduce childhood mortality

in villages where many children die from

illnesses caused by waterborne pathogens. In

addition to a year-long supply of safe drinking

water, other improvements include increased

milk production and higher income levels

from growing cash crops. Despite such harsh

realities and obvious benefits, the social

realignment and other conditions can be

very difficult for some people to accept.

In the beginning of a project WOTR

representatives will explain the requirements

for collective participation and labor in a

series of communication meetings. Many of

these representatives speak from persona

experience having once lived in other vil

that have been transformed by the rain

harvesting practices. But just as many

manufacturing executives dont understa

what lean is about until they visit a facto

that is doing it, the real buy-in comes wh

villagers visit other successful projects an

see the results of the work for themselves

After everyone agrees to move forwa

WOTR teaches villagers how to plan an

track their work, including a large scorebo

similar to an hour-by-hour chart that disp

overall progress. All of the work is perfor

by the villagers without the help of any

outside contractors. Tracking and calcula

how much each person earns is controlle

the villagers as well. As a project nears

conclusion, while some are always reluct


6/24

GIVINGBACK (continued)

to finish up and give up the steady source of

income, people typically move on to higher-value work such as crop production that

offers higher income levels.

WOTRs holistic approach yields

holistic results:

Ground water levels typically increase 25

to 60%

Cultivated areas increase by at least 80%,

and irrigated agriculture areas increase

five- to ten-fold. Crop production climbs 90% to 145 %

Village school enrolment increases by 25%

to 40% (to between 75-100% of all

children).

Clean drinking water becomes available

year round or for a greater part of the year

Milk production increases by at least 200%

Former wastelands are replaced by tree

and grass cover thats plainly visible in

overhead before and after photographs.

And finally, social harmony improves aswomen and the downtrodden gain a

meaningful voice in local decision-making

processes.

At TBM we are proud to contribute to

the future success of an organization that has

already made such an impact on peoples

lives. During our visits the villagers have

always been open, friendly and immensely

appreciative of the guidance and support

that WOTR has provided. In its most recentannual report, WOTR states that the Lean

Sigma trainers taught and certified by TBM

are introducing the productivity-enhancing

and waste-reduction processes across the

WOTR group and its projects.

The benefits have been observed in

that the various wastes have been identified

and are in the process of being reduced,

4



GIVINGBACK

without reducing the quality of social mobi-

lization. The projects can now be completedin a much shorter period than before, the

report states.

Many watershed development projects

in drought-stricken areas around the world

have failed not because of a lack of funding

or technical expertise. They have failed

because organizers failed to manage the

social aspects of such initiatives. The same

could be said for the lean initiatives at many

companies. By communicating the potential

benefits and getting everyone on board byshowing examples of the future potential,

lean program leaders and kaizen organiza-

tions can avoid future hiccups that might

delay or otherwise derail progress.

TBM commends the staff of WOTR

for the work they have done, for the sus-

tained impact of their programs, for the

recognition that they have received, and also

for their spirit of continuous improvement.

Beyond watershed and land improvements,

WOTR works with the villagers to think

about a future that includes better health-

care, new schools, more efficient farming

practices, replacing kerosene with pellet-

burning stoves, and solar lighting. As theyve

learned, with collective participation and

hard work, anything is possible.

------------------------------------------------------

Special Note: TBM Consulting Group Co-

Founder, President and CEO Anand Sharma

serves on the WOTR board of directors.


7/24



By combining its operational excel-

lence initiatives with a proactive environ-

mental program, Vermeer Corporation has

made dramatic waste and operating cost

reductions. Headquartered in Pella, Iowa,

Vermeer manufactures heavy equipment

serving agricultural, forest, environmental,

underground and specialty excavation cus-

tomers. Employees cut, bend, weld, clean

and paint hundreds of tons of steel every

year.

Vermeer conducted its first kaizen eventin 1998 and hasnt looked back. Over the

intervening years it has leveraged lean manu-

facturing methods and Six Sigma tools to

transform the company and dramatically

improve production efficiency and quality,

reduce lead times, improve safety, minimize

inventory and boost profit margins. The

company has found that efforts to eliminate

wasted energy, water, trash and emissions are

a natural addition to its continuous

improvement processes and culture.If youre going through a kaizen event

and youre thinking about eliminating waste,

it doesnt take any longer to think about

eliminating green waste as well as process-

related waste, reports Terry Butler, Vermeer

Director of Environmental Health and

Safety.

Like a lot of manufacturers, Vermeerplaced recycling bins in production

areas many years ago. But when

Vermeer Environmental Engineering

Manager Fred Earley and a dump-

ster diving kaizen team analyzed

the program, they found that recy-

cling procedures were not very clear,

and that there were many more

trash cans than recycling containers.

When the team sorted out one daystrash on a tarp on the lawn, they

found that 70% of what was then

being sent to the landfill could in

fact be recycled.

The kaizen team subsequently defined

new recycling procedures and trained every-

one on the site. They introduced segregated

recycling bins on carts that operators must

empty after every shift in a central collection

area. And they reduced the number of trashcans to make it easy to recycle and less con-

venient to just throw stuff away. Supervisors

have reinforced the recycling habit by mak-

ing it a part of each work areas weekly 5S

audit.

Its been embraced very positively by

our employees, says Earley. Who doesnt

want to create a better environment in

which to live and work?

TECHTASaving GreenAt Vermeer lean process improvement methods naturally support green

objectives while simultaneously lowering operating costs.

By David Drickhamer, independent business journalist and former editor of Industry Week magazine

A kaizen team at Vermeer pick through one-day's trash revealing that 70 percent could be recycled.


8/24

6



Prominently placed recycle carts make it easyto recycle.

As a result of these renewed recy-cling efforts Vermeer has reduced

off-site trash disposal by over 760

tons per year. By finding beneficial

uses for materials that were once

thrown away, the companys landfill

waste has fallen from more than

60% of total waste to less than 30%,

and its still falling. The lean and

green program has produced hard

dollar savings of $230,000 per year

n the form of disposal fee savingsand recycling credits.

Reducing wastewater is another environmental priority at Vermeer. Just as they do when spot-

lighting non-value-added time in order-fulfillment processes, continuous improvement teams

make the opportunities for environmental improvement more visible by mapping the amount

of energy and water consumed, the amount of scrap generated, and how much pollution is

emitted at each stage of a value stream.

A value stream map that accounts for forms of environmental waste.

After applying such techniques to analyze a parts-washing line, a team rerouted overflow

pipes, eliminated heated water, and converted paint-prep coating systems from a phosphate to

a zirconium-based process. Changing the overflow configuration reduced the amount of

water going to the Vermeer wastewater plantwhere its treated before being released back to

the cityand reduced water usage from 11 to 4 gallons per minute. Total reductions in water

usage and emissions now save Vermeer $114,000 annually.

TECHTALK (continued)

TECHTALK


9/24



Wastewater reductions at Vermeer dramatically exceeded annual targets.

Other environmental initiatives have reduced particulate emissions by 62% from 6.2 tons to

3.6 tons per year through technology upgrades and the addition of new controls and collec-

tion equipment. Implementation of a laundering and reuse process for personal protective

equipment has saved $43,400 per year in replacement and disposal costs.

Much of the environmental progress made by Vermeer can be attributed to changing how

people think and making environmental waste more visible. In addition to the seven wastes

familiar to anyone applying lean manufacturing principles, trainers now talk about applying

the three Rs (reduce, reuse and recycle) to the seven green wastes.

Seven Lean Wastes Seven Green Wastes

1. Overproduction 1. Energy

2. Waiting 2. Water

3. Excess Inventory 3. Materials

4. Defects 4. Garbage

5. Transport (Conveyance) 5. Transportation

6. Over Processing 6. Emissions

7. Excess Motion 7. Biodiversity

Source: Vermeer Corporation

Many manufacturers, motivated by both growing customer demands and a genuine concern

for the condition of the world we inhabit, are making environmental stewardship a core part

of their company values. Earth-friendly manufacturing starts where value is created: on the

plant floor. As Vermeer has demonstrated, incorporating lean and green priorities into process

improvement programs can translate those lofty values into quantifiable improvement to the

environment, and your bottom line.

Over the years Vermeer has

applied lean to all areas of oubusiness, notes Earley. Using

to improve our environmenta

stewardship is a natural progr

sion. The challenge is learning

how to see green in everythin

you do and then applying lean

principals to those opportuniti

Waste is waste. Find it and

eliminate it, advises Earley.

Applying lean principles is a

win-win and the results speak

themselves.


10/24

8



Q.You have been involved in lean sincethe late 1980s, working at some of the

first non-automotive companies to

successfully build lean cultures

(Batesville Casket Company,

Hillenbrand Industries, and Hill-Rom

Inc.). Whats different about being a

lean leader today?

Fundamentally, the tools andphilosophy are the same. Its still

about creating a culture focused on

continuous improvement and

getting up every day to improve

safety, quality, cost and delivery. I

do see two big differences in the

business environment. First, we

have significant down cycles across

just about every business sector. A key

piece of lean is freeing up and redeploying

unidentified capacities. Thats reallydifficult to monetize if youre in a down

cycle like were in now because you dont

have the opportunity to grow at the rates

you did 20 or even four years ago.

Secondly, business in general is moving at

a much faster pace, and the transformations

Ive been involved with have been moving

at an accelerated rate, creating change faster

than we would have been able to manage 20

years ago. The global success of lean philoso-

phies has created an environment that is

more open to change these days.

Q. Prior to joining Armstrong, you werewith TPG Capital, a private-equity group.

In this role, you led the lean pilots and

manufacturing due diligence at

Armstrong. What is it like to be a leanchampion in this arrangement?

The difference is not so much about private

equity as it is about management alignment

and speed of making decisions. Armstrongs

lean journey was sponsored and initiated

directly by our board of directors. With that

buy-in and support of the board of directors

matched up with management commit-

ment you can really implement radical

change rather quickly.

Q. Sounds as if it makes your job a lotmore fun. Does it?

Absolutely. I talk to so many people at the

TBM conferences, and their biggest prob-

lems relate to how do you get the leadership

buy-in and fortitude to let the lean transfor-

mation take place and not cut and run the

first time you have a setback. Its something

that people really struggle with, and the pri-

LEADERSHIPINSIGHTS Loving the Lean Lifeby Tonya Vinas, freelance business journalist and former editor of Industry Week magazine.

Don Maier, Senior Vice President of Global Operations

and Supply Chain at Armstrong World Industries is leading a

lean transformation at the global floor- and ceiling manufac-

turer as it prepares for a market rebound in the struggling

building-products industry.

LEADERSHIPINSIGHTS


11/24



vate equity environment gives you a great

backdrop to get that done.

Q. Do you think thats because the pri-vate-equity community has recognized

lean as a powerful way to create value?

You bet. There are all kinds of deals that are

done in the private-equity space. During the

diligence process, significant opportunities in

lean for both manufacturing and business

processes are usually identified. In those,

creation of a lean culture is built into the

investment thesis, so you really have buy-ineven before Day One of the transformation

process.

Q.Your first task for TPG was creatingan assessment model to evaluate improve-

ment potential, and then use it to evaluate

Armstrong. Where did you begin?

We spent quite a bit of time at Armstrong

corporate headquarters getting metrics and

data, both quantitative and qualitative. We

then took that data and, as best we could,put that into our assessment model. We then

conducted six physical site assessments. They

were done on the gemba, walking the plant

floors with the managers.

Q.What were you looking for that youdidnt get from the numbers?

With these gemba walks it is pretty easy for

someone with a trained eye to start to see

the signs of opportunity. Is there flow, or are

there islands of batch? Whats the state ofwork-in-process? Whats the frequency of

raw-materials replenishment? Whats the fin-

ished-goods inventory position? Are they

building to a schedule or customer demand?

You as well get a sense for the talent of the

team. Whats the morale of the workforce?

Whats their pace? What are they doing? Are

there tow motors driving everywhere? Or are

people working in a synchronous way?

A key thing I look at is lead time from the

time raw materials hit the dock to when fin-

ished goods are going out the other end.

Generally, that gives you an idea of total leadtime versus value-added processing time.

At Armstrong they had a strong

track record of year-over-year

improvements. I was very

impressed with the caliber of the

manufacturing leadership and

Armstrongs world-class perform-

ance in safety. The discipline and

behavioral change in culture

needed to drive their global safe-

ty performance convinced me

that they could embrace a lean

transformation and accelerate

their rates of improvement.


12/24

10



Q.And then . . .The assessment model has several sets of

questions that take the subjective observa-tions from the gemba walks and quantify

them into specific scores. These scores are

then extrapolated across the financial data

that was entered to create pro-forma P&Ls,

balance sheets, and capacity charts. While it

is an assumption-based model, it has been

proven to be fairly accurate. The two big

metrics are gross productivity and working-

capital improvement.

Q. Does the model account for chal-lenges outside of managements control

such as raw material prices or a shortage

of skilled employees?

Yes. It also estimates the cost to drive the

transformation and the degree of difficulty

to implement is it going to be tough

drilling or easy drilling, and are there other

initiatives that could accelerate or compli-

cate the progress. Thats a part that a lot of

people miss . . . how difficult is it going to

be all things considered?

Q. If the model shows a favorableinvestment opportunity, and TPG takes

the next step as it did for Armstrong

do you share the results with the

management team?

Yes, and management is usually in complete

denial and cant believe theres that kind of

opportunity. Inevitably, that prompts us to

ask, why dont we pick a couple of sites, and

well go run a couple of week-long events,

and see what we can find out? I call these

the pilots. These pilots, often involving a

number of Kaizen events, open up the door

and always show the real potential. The next

step is to do a robust value-stream model.

Q. Im betting at this stage, you havecuriosity from some managers and front-

line employees, and doubts from others.How do you take the next step to moti-

vate people and get them on board?

The next 100 days are very important. I call

it the proof-of-concept stage. You need to

pick projects that will drive results that are

visible, sustainable, and that will hit the

P&L. Then you have economic evidence of

what the lean transformation can deliver,

and you begin to get buy-in. After that, you

begin introducing lean at a couple of other

sites. I call this the ripple effect. Its kind oflike the camel getting his nose under the

tent. Once his nose is in the tent, its not

long before the whole camel is in the tent.

Q. In a multi-plant company such asArmstrong, how do you know where to

begin?

You want to stack the deck in your favor, so

I look for a couple of characteristics at each

site: Is the management team open and capa-

ble? Will the proof-of-concept be indicative

of what is possible at other sites? And is this

a middle-of-the-pack site? You pick a mid-

dle-of-the-pack site because if you pick the

worst site and show improvements, people

will just discount it, and you wont get any

credit. Conversely, if you go to the best site,

people will say it might work there, but we

dont have the skills or ability to get those

types of improvement at the other sites.

At the end of the proof-of-concept, you

want to have the management team saying

this is valid, this really works, and we can

make this work across the network of sites.

LEADERSHIPINSIGHTS (continued)

LEADERSHIPINSIGHTS


13/24

Managing Times | Q1.11www.managingtimes.com

Q. It sounds easy when you describe it,but no lean transformation is easy. Tell

me about a memorable challenge atArmstrong.

At our very first site, we had a bunch of

managers in the room for our kick-off pres-

entation. My second slide came up. The first

part of it was the definition of lean, and the

second part was the definition of kaizen.

One well-respected and very intelligent

manager, Bob, raises his hand and says

Don, is this one of these meetings where

we can only listen, or is this one of those

meetings where we can ask questions? So Itold him we wanted dialogue, and to go

ahead. He said Don, there are two words

that make me want to just puke, and one of

them is lean, and one of them is kaizen, and

theyre both up there on your slide.

So we stopped the presentation and had a

45-minute discussion about their prior expe-

rience with lean. It was a huge gift from

Bob, frankly, because I had no idea about

that. So I threw my presentation out, and

we chatted about their past experiences and

how my approach to lean was different. At

the end of the meeting, I told them that if

this team didnt want proceed, that was an

acceptable answer, but I would be very dis-

appointed. Or, we can complete the value-

stream process this week and re-assess on

Friday.

Q.Where were you that Friday?It was one of the best value-stream-mapping

processes Ive been a part of. The highlightfor me was on Friday when Bob came up to

me and said Don, I appreciate this so

much. This is so different from what we

have done in the past, and I can see all of

the opportunities that are out there for us.

Q. Have you or the Armstrong manage-ment team been discouraged by the slow

and intermittent pace of recovery in the

housing market?

Lean applies whether you are in boomingtimes or bust times. It doesnt matter. At

Armstrong, we are seeing phenomenal

results with relatively flat markets today, and

thats making us a better supplier by improv-

ing quality and delivery with a much lower

cost. When the market does pick back up,

we are going to take full advantage. I am a

firm believer that lean is a growth enabler if

you truly focus on your customer.

Q.What do you like most about lead-ing lean transformations?

Its a blast. I told my wife I feel like I havent

worked a day in eight years. I love seeing

people develop and grow. I love to see the

improvements through, and then be able to

walk away and know the lean journey will

continue.

------------------------------------------------------

Armstrong World Industries, Inc. is a global

leader in the design and manufacture of floors,

ceilings and cabinets with a focus on innova-

tion, design and environmental sustainability.

In 2009, Armstrongs consolidated net sales

totaled approximately $2.8 billion. Based in

Lancaster, PA, Armstrong operates 35 plants in

eight countries and has approximately 10,000

employees worldwide.


14/24

12



CASESTUDY

Client >SEMCO is a contract manufacturer of

assemblies containing metal castings (con-

duit and cable fittings) and injection-molded

components (covers for protection and

weatherproofing). SEMCO consists of four

plants in Pune, India, (copper alloy gravity-

die casting plant, zinc pressure-die casting

plant, aluminum pressure-die casting plant,

and steel fittings plant); and one in Jaipur,India, (iron, copper and aluminum alloy

sand-casting plant). SEMCO distributes its

products through a centralized distribution

center in Raleigh, N.C.

Challenge >In the 2000-2001 fiscal year, SEMCO was

manufacturing in the hundreds of tons of

die castings a year and was struggling to do

so. This worried the companys senior lead-

ership, which saw potential growth opportu-nities for up to 1,000 tons a year. The rapid

rise of China as the lowest-per-unit-cost pro-

ducer of the same products added height-

ened urgency. Not only did Chinas emer-

gence as a major competitor threaten long-

term growth potential, but also current cus-

tomer relationships.

CASESTUDYSEMCO Beats Low-Cost Competitors With a Focus on Service

Flexibility and responsiveness are attracting an increasing number of custom

Tonya Vinas, freelance business journalist and former editor of Industry Week magazine

Solution >SEMCO focused on three areas to create a

model to compete with cost-driven com-

moditization of its products: controlling

costs through efficiency and quality

improvements; creating a flexible-production

model that lowest-cost producers cant repli-

cate; and building a U.S.-based lean-distri-

bution model that enables customers to

maintain adequate-yet-efficient inventories.In 2002, SEMCO started using a variety of

LeanSigma training, tools and techniques to

revamp its business model based on these

differentiators and has since become a pre-

ferred offshore producer (based on growth

performance).

Results >By transforming into a unique provider with

a low-cost/high-responsiveness/high-quality

model, SEMCO has been able to achieve a20 percent compound annual growth rate.

The companys lean foundation also

streamlines growth through acquisition and

furthers substantial efficiency gains achieved

during the past four years at its Indian

plants, such as doubling productivity with

the same assets.


15/24



SEMCO is growing at about 20% CAGR

because of its ability to compete as a

low-cost producer with flexible fulfillment

capabilities and multiple growth opportu-

nities. The company can make any of its

15,000 products during any given week in

variable order quantities.

While growing, SEMCO has remained

competitive on price through containing

costs and keeping high-value knowledge

and production assets in India.

Conversion costs as a percentage of sales

have remained the same as the company

has grown.

SEMCO is able to be a problem solver

for customers while maintaining its low-

cost structure. This is in stark contrast to

high-volume batch producers that can

grow only by selling more units per

employee. As a solutions provider,

SEMCO is open to growth opportunities

such as developing new products, entering

new markets, and gaining new capabilities

through acquisition.

A New Way of Manufacturing

When China made its entrance into

modern, global manufacturing earlier this

century, she stole the show. All eyes were on

this newly liberated producer as Chinese

manufacturing plants flooded overseas mar-

kets with low-cost industrial goods. This

baffled many manufacturing leaders, and

some companies never recovered.

But Indian producer SEMCO, which

makes fittings and weatherproof products

for rough electrical applications, recreated

itself in an Iron Man-like fashion to fight

the low-cost devaluation of its products.

According to CEO Paul Hirt, the companys

formula for success SEMCO is growing

at about 20% CAGR has three key ele-

ments: ongoing efficiency improvements; a

flexible production model; and the ability to

help North American customers manage

inventory for optimal profitability.

Another important aspect of SEMCOs

strategy is the location of its most expensive

assets: All of its plants and production-

focused intellectual property are based in

India, while customer-facing capabilities

(i.e., service and distribution) are based in

the United States. This keeps production

costs low while providing a much higher

level of service than competitors.

We make commodity products, but

because of our service and engineering capa-

bilities, we are not a commodity producer,

said Hirt, who joined the company in 2007.

Five years prior to Hirt joining,

SEMCO launched its LeanSigma-based

revamp within its plants. The two biggest

physical changes were transitioning from

batch production to cells and reducing set-

up time through standard work (going from

eight set-ups per day to about 40). This

combination alone yielded significant

improvements in quality and flexibility.

The focus on single-piece flow forced

us to get it right the first time, explained

Hirt. In addition, when a quality issue

occurs, we use the lean tools to take a sys-

tematic approach of asking why four times

to get to the root cause and then imple-

menting the corrective action to ensure that

issue wont repeat. By contrast, most of our

customers who buy competitors products

from China have had to implement rigorous

incoming inspection processes.Flexibility is also unique to SEMCO as

a low-cost producer in its market.

We reduced our set-up time for each

SKU so that we can make precisely the

quantity the customer wants, Hirt said. It


16/24

doesnt matter if it is 1,000 pieces or a half-

million pieces, we will ship it out within a

week. That allows us to maintain a four-to-six-week lead time with a low-cost structure.

This type of response is not currently avail-

able from our Chinese low-cost competitors.

Plant-Level Results

Performance improvements at the plant level

included:

Eliminating waste in manufacturing,

assembly and packing processes by

reducing work-in-process (WIP) from

22 days to less than four days. Improving quality in excess of 50%.

Doubling productivity in four years.

Doubling plant volume while reducing

floor pace by 30,000 square feet.

Focus on Customers: Flexibility and

Responsiveness

By reinventing itself as a demand-driven

supplier, SEMCO gained another key

advantage over its batch-focused competi-

tors: Being able to help customers manage

inventory for efficiency and performance

goals.

SEMCO used lean methods and tools

to re-align its supply chain. This was a cru-

cial step to increasing overall customer value

because SEMCO couldnt be demand-driven

without its suppliers being similarly aligned.

Changes included:

Moving from a monthly planning cycle

to weekly with scheduling from fore

casting based on actual point-of-sale

data.

Pushing quality improvements that

ultimately yielded a 79 percent increase

in supplier quality as measured in parts

per million.

Creating a pull system from suppliers to

production and final shipment.

With these changes, SEMCO was able to:

Improve fill rates from 65-70 percent to

93-95 percent Reduce total tooling lead time from

120 days to 72 days.

These improvements have caught cus-

tomers attention. SEMCOs share of its

major markets has grown by 10 to 20 per-

centage points over the past three years.

Today, its not uncommon for customers to

send direct, demand-driven replenishment

cues to SEMCO as product is consumed;

and other customers outright rely onSEMCO to manage a portion of their

inventory. Such arrangements take ongoing

customer engagement, another thing

SEMCO does well that its competitors dont

even attempt.

In 2009, Cooper Industries named

SEMCO Asian Supplier with The Most

Potential after one year of doing business

with the company. It was the first time the

award was given to a supplier after only one

year.

Major Hurdles and Lessons Learned

SEMCOs lean efforts met the most

resistance in its North Carolina-based distri-

bution center. Hirt said attempts to imple-

ment lean systems there outright failed

twice. Aligning finished-goods inventory

management with customer pull was a must

for the model to work. Leaders had to make

it work.

Ultimately, they made leadershipchanges, assigned a full-time continuous-

improvement specialist to the distribution

center, and invested in a new software sys-

tem that improved visibility and tracking of

inventory (and therefore accountability).

CASESTUDY (continued)

14



CASESTUDY

Paul Hirt

CEO, Sigma Electric Manufacturing Company


17/24

Today SEMCO has one-half to one-third of

the employees it used to have at the ware-

house but is achieving the same productivityAND is able to offer services such as late-

point packaging to customers, Hirt said.

Hirt notes two other significant lessons-

learned about doing business in India:

Over-promising: One aspect of Indian busi-

ness culture is to over-promise what can be

delivered. Theres a tendency to tell them

what they want to hear. This makes leader-

ship gemba all that more important. Youreally have to probe as to how you are going

to fulfill the request and then you have to

really monitor to make sure that is happen-

ing.

Great debates: Lean can be successful in

Indian plants, but achieving success can take

longer because of the cultural propensity to

debate and discuss topics much longer than

is common in U.S. business. Hirt gives poli-

cy deployment as an example. Hirt, hisdirect reports and continuous-improvement

leaders have been using policy deployment

for three years, but unlike at a U.S. firm,

where strategy deployment often quickly

elicits ah-ha moments from long-time cor-

porate leaders, complete buy-in is taking

much longer.

The first year was very disappointing, Hirt

said. The second year was better, and in

this third year, its getting better.

Today and Tomorrow

SEMCO continues to be growth-mind-

ed. LeanSigma is enabling this growth intwo ways, Hirt said. First, one of the goals

of the companys strategy-deployment initia-

tive has been to support new-product devel-

opment, which is also employing Six Sigma

tools.

We have implemented a toll-gate

process that utilizes a lean voice-of-the-cus-

tomer approach to identify new product

needs, Hirt said. Our first set of new

products has been launched, and initial

results look encouraging.SEMCO also is growing through acqui-

sition. Having standard work and defined

processes has made integration of new busi-

nesses much quicker and efficient, Hirt said.

Lean has brought project-planning

rigor that anticipates potential issues and

leads to contingency and countermeasure

planning, he said.

As SEMCO grows, so will continuous

improvement in all areas of the company.

Each plant is operating day-to-day withoutmuch upper-management direction, as are

parts of engineering, tooling and site main-

tenance. Recently, lean teaching has begun

in support functions. And, said Hirt, he is

still pushing for ongoing breakthrough

achievements.

After doing lean for several years, its

not always obvious whats next to improve,

Hirt said. Were still getting improvements

at the cell level, which is O.K., but getting

breakthrough improvements is gettingtougher. So Im telling my team go talk

to people. Go talk to them about their best

practices and bring them back to SEMCO.

SEMCOs goal was to become an

offshore producer that North American

customers would think was an Americacompany, Hirt said. SEMCOs applica

of lean to change its company culture an

model was the most important factor in

achieving this vision. While many indus

manufacturers continue to struggle agai

the sirens song of lowest-per-unit costs,

SEMCO has found a path not only to

maintain market share, but also to grow

an exceptional rate.




18/24

16



STRATEGICVISION

STRATEGICVISION Making Friends with Riskby Carl Deeley, Director, TBM Consulting Group, Inc.

Staring down the barrel of the longestrecession in 100 years, two big themes popinto view, each with a huge potential impact

on many fortunes: Innovation in a time of

disruption, and the fear this strikes into the

heart of so many business people.

We know some of humanitys greatest

advances are born of upheaval and disrup-

tion, such as the 1934 invention of the laun-

drette during the U.S. depression, which

gave people the opportunity to make use of

new technology (washing machines) without

spending scarce capital. History teaches thatwhen world economies are in flux, as they

are now, its a great time to hit the market

with fresh ideas. But global economic tur-

moil tends to make executive boardrooms

more cautious than bold. Many of those

who would innovate are hearing a lot of

no and not now.

Executives worry about taking a

chance on something new, eventhough they know the inherent

risk of letting their new-product

pipeline dry up and being left in

the dust. Therefore, now is a

good time to review the disparate

meanings of chance and risk.

Lets start with a tempting bit of

Japanese cuisine: fugu. Also known as pufferfish, fugu has been served as a delicacy in

Japan for centuries. In the 17th century, a

few morsels of this tasty white fish could

leave you with a faint tingling numbness on

your lips and tongue as it slipped down your

throat. Or it could kill you. It was a chance

you took.

Chance essentially means unpre-

dictability. Anything could happen, as far as

youre concerned, because you lack some

essential information that would make the

outcome knowable.

Over the years, people found the source

of the puffers toxicity -- tetrodotoxin a

rather nasty poison that paralyzes human

muscle, leaving a victim fully conscious as

they asphyxiate. There is no known antidote

but people still wanted to eat fugu because it

was delicious. So, Japanese chefs developed

special techniques for cleaning fugu, isolat-ing the poison, and serving it up to people

interested in taking the risk.

Risk is the possibility of loss or dan-

ger, with possibility on a sliding scale. The

more skilled your chef, the better chance

you and your dinner companions will be

smiling at each other with only partially par-

alyzed grins. These days, fugu is farmed and

most of the fish now lacks the deadly toxin,

so few are taking any chance at all. But the

risky reputation allows those specially trainedchefs to charge $50 per serving for the 10,000

tons of fugu eaten in Japan every year.

Risk usually means you have information

about both the danger and reward, and you

make an educated leap. This is exactly the

kind of approach we need to new product

development in uncertain times, but it must

be based on solid, actionable information --

and most companies have shockingly little.

Surveys? Focus groups? This kind of

intelligence still leaves so many gaps in acompanys knowledge that most are taking

chances instead of calculated risks when it

comes to new products.

The problem is a lack of integration.

Lets see if this sounds familiar. A cam-

paign of intelligence gathering surveys,

focus groups conducted by outside experts

convinces your marketing leadership that

customers want functions x and y added to

Carl Deeley

Director, TBM Consulting Group, Inc.

Risk is the possibility ofoss or danger, with possi-bility on a sliding scale.


19/24



your current product, and they want it in

blue. This information is dropped onto the

desk of someone in engineering, perhaps,

who designs a new product based on his

interpretation of the data surely marketing

wanted functions x and z and passes it off

to production, who sends it back to engi-

neering for clarification. After a few rounds

of general grumbling, they come to some

agreement on what can be produced and

eventually, the object is forwarded to sales. It

might bear some passing resemblance to the

original idea, but its been passed around and

reinterpreted so many times, it is unrecog-

nizable to the original focus group. With

every iteration of the pass off, valuable infor-

mation has been lost.

In a lean business which is to say, a

business that focuses on value to the cus-

tomer above all else, without undue waste,

delivered in a timely fashion each step in

the process is integrated and all work is

accomplished by a cross-functional team.

The team begins not with a readymade

design, but with the voice of the customer.

This might include some kind of direct

interaction between team and customers, as

well as market research, field observation,

crowd sourcing, and the like. In general, the

design work occurs in phases. While cus-

tomer participation typically drops off as the

design takes shape, a lean approach keeps

them around during development in order

to qualify the actual design with real cus-

tomers.

Whats remarkable is how much an inte-

grated team reduces the dreaded rework

loops that plague most new product designs.

Consequently, lean design teams typically do

a better job of satisfying the needs of the tar-

geted market, which leads to achieving the

forecasted sales.

When design groups include the voice

of the customer into the product design

process, they move the bar from chance to

risk. And every additional piece of data

Despite the risks, the fugu fish is considered a special delicacy in Japan.

chance & risk


20/24

STRATEGICVISION (continued)

moves that bar further. A smart company

that decides it wants to make a three-

wheeled vehicle, for instance, does not startby asking whether the vehicle should be

green or blue, have retro or futuristic styling.

The smart group begins by asking what a

consumer wants in a vehicle, where they live,

and how they like to travel. Does their vehi-

cle represent a conveyance or is it a reflection

of the consumers own personality?

When we reach this far into the question

of what a customer wants and then really

listen to the answer were including the

customers view in every aspect of the product.We are, in fact, allowing the customer to

challenge our ideas of a good product. And

if it turns out they did not want a three-

wheeled vehicle after all, it may be a blow to

the ego of our visionary engineers, but, more

importantly, its a big reduction in the risk

were taking.

People are herding, collective creatures.

Our opinions and ideas change in waves. So,

when a market downturn drastically reduces

the income of a significant percentage of ourfellow citizens, suddenly it just seems better

to buy fruit from giant boxes, rather than

having each piece preciously wrapped, even

if the buyers own income was not affected.

The discount grocery chain Aldi is cer-

tainly an example of a company that knows

its customer. Its using the current belt-tight-

ening atmosphere to introduce itself to more

markets. In 2009, the company announced

its intention to build 30 new outlets a year,

plus two large new warehouses, and double

its market share while keeping an overall

strategy of stocking less variety at cheaper

prices.

A smart company is one in which every-

ones job is to serve the customer. That also

means knowing the customer, both individu-

ally and collectively, as a market. Ultimately,

the people who buy our products help us

reduce risk, if we let them. But lets be clear:

There is no such thing as eliminating risk.

We can avoid the stomach-churning carnival

ride of chance by inviting customers into the

new-product design process and integrating

our functional areas into one team, but for

every company that wants to stay relevant,

risk is a constant companion.

In my opinion, this time of turmoil

presents us with great opportunities.

Consumers are familiar with the change

thats all around them and are open to fresh

ideas for dealing with todays challenges.

Now is an excellent time to make friends

with risk.

------------------------------------------------------

Carl Deeley recently returned from a two year

engagement as Managing Director of TBM

Australia and Asia Pacific. He is a specialist

in lean value chain design and implementation.

He has over 20 years experience with lean

implementations and business process improve-

ment across multiple functional areas. He was

a featured speaker most recently at the "Innovate

2010" conference in Sydney, Australia.

You can contact Carl at [email protected].

18




21/24

TBM presented Milbank ManufacturingCompany, the industry leader in the manu-

facture of electrical meter sockets, with theseventh annual Perfect Engine Site award,

recognizing the Milbank Kansas City plant

for its commitment to lean excellence in

manufacturing.

The Perfect Engine refers to the

precision interworking of human resources

and physical assets to achieve outstanding

productivity results that create business

agility, growth and profitability.

The Perfect Engine Site award recog-

nizes individual plants or offices that havesuccessfully implemented a LeanSigma

transformation and demonstrated innovation

and outstanding teamwork.

Anand Sharma Chairman and CEO for

TBM, presented the award to Eric Krichbaum,

Senior Vice President of Operations and

Chief Operating Officer at the LeanSigma

Global Summit in Las Vegas, Nevada. Mr.

Krichbaum accepted the award on behalf of

Trace Tandy, the plant manager at the

Milbank Kansas City facility. The KansasCity plant began its LeanSigma journey in

2007 after creating an overall vision and

direction that required the facility to focus

on operational excellence in order to become

more agile and efficient. Over the past two

years, the Kansas City facility conducted

over 30 kaizen events focused on critical

shop floor and business process areas.

"We committed to a cross-functional

approach for achieving our strategic objectives.

By focusing on lead times, set-ups and stock

availability, we are now able to accommodate

customer needs for variety. At the same

time, we reduced inventory and significantly

improved our cash position in spite of the

recent recession. I am inspired by our

accomplishments and humbled by the

improvement opportunities that lie ahead.

Most importantly, weve invested in the

LEANCHAMPIOTBM Names Milbank Manufacturing Company

Seventh Annual Perfect Engine Site

Electrical Meter Socket Manufacturer Recognized for Operational Excellence



development and retention of people to

continuously improve our value delivery

system," said Krichbaum.We are very proud of Milbank because

they defined a management vision and drove

that vision throughout the organization by

embracing LeanSigma tools and rapidly

driving sustainable improvements in quality,

cost, and delivery, said Anand Sharma.

Results Summary

Milbank is now using liberated cash and

space to invest in a new alternative energy

solutions business. Lead times reduced by 53 percent

Over $3.5 million in free cash generated

from reductions in work-in-process and

finished goods inventory.

Able to support market expansion with

current facilities by liberating 100,000

square feet of floor space in manufacturing

and storage facilities

(Left to right) Eric Krichbaum, Senior Vice President of Operations and Chief Operating Officer, Milban

Manufacturing receives the seventh annual TBM Perfect Engine Site Award from Anand Sharma, Chair

and CEO, TBM Consulting Group, Inc., at the TBM LeanSigma Global Summit in Las Vegas, Nevada

September 16, 2010.


22/24

ACCELERATEDLEARNING Why Lean Programs FailBy Joe Panebianco, Director, LeanSigma Institute

The lure of a continuous improvement(CI) program is irresistible When done

right, such programs can deliver revenue

growth and income three to five times the

competition. Eliminating waste and excess

inventory can add millions of dollars in prof-

it to an organizations bottom line. There is

an added benefit of enhancing a companys

public image: Continuous improvement

and lean initiatives have become such

buzzwords over the past 15 years, that com-

panies noted for using these techniques are

frequently perceived as being cutting edgeand resource savvy. And with a weakened

economy and uncertain projections for

recovery, many manufacturing companies are

looking to CI techniques as a way to remain

profitable and weather a rough period. As a

result, many companiesalmost 67%

according to an Industry Week survey

operate some type of continuous improve-

ment program.

Do continuous improvement programs

really play such a critical role in the successof an enterprise? Some companies that

implement CI programs fail to gain traction

and quickly abandon their improvement

efforts. More commonly, a companys con-

tinuous improvement program will deliver

some type of benefitusually short-term

to the organization. Unfortunately, very few

CI programs succeed in transforming the

company. Keith Yeater, a veteran TBM con-

sultant, explains, Lean manufacturing and

continuous improvement are as much a cul-tural transformation as an operational adjust-

ment. In order for the transformation to

occur, the entire organization must under-

stand the reasoning behind the change

Without this understanding, people struggle

to drive, let alone support and sustain, the

transformation.

Implementing a truly successful contin-

uous improvement program requires trans-

forming an organizations mindset to one

that embraces a culture of continual self-

examination, review, and modification. This

type of change is difficult to implement

because it is transformational: it requires

eliminating old ways of thinking, developing

and reinforcing new behaviors, and, simply

put, is scary. It is human nature to fear

change because change requires us to move

out of our comfort zones, try new things,

and enter unknown territories. For seniormanagement teams, this type of transforma-

tion can be particularly frightening because

they are stewards of the organization,

responsible for a companys future, its repu-

tation in the marketplace, and the welfare of

its employees. Embarking on this type of

transformation journey without a guarantee

of complete success is daunting for most

companies.

So what is holding back potential CI

programs? How can an organization takelean to the next level? What are the hurdles

that have to be cleared in order to maximize

the impact of a CI program?

There are as many different answers to

these questions as there are continuous

improvement approaches. Like CI programs

themselves, the problems that plague these

initiatives and the reasons why they are sus-

ceptible to failure are many and varied.

However, when you talk to experts who have

spent their careers advising companies oncultural transformations, several common

themes emerge. Though the reasons why a

given program fails to yield significant

results or gain traction are unique to that

program, the primary obstacles to success

can be classified under the following prob-

lem areas:

20



ACCELERATEDLEARNING

Joe Panebianco

Director, LeanSigma Institute

Unfortunately, very few continuousmprovement programs succeedn transforming the company.


23/24

1. Lack of Leadership. Assimilating acontinuous improvement program into anorganizations culture requires large-scale,

transformational change. Many companies

think that by rolling out a CI program to its

employees and throwing in a few incentives,

such programs will automatically take root

and employee behaviors will change over

night. This is not the case. CI programs

require a culture shift, and changes of that

magnitude need to be strongly led, with sen-

ior management fully committed to the

change and modeling the required behaviors.Without executive leadership continually

reinforcing the new CI culture, employees

will revert to old habits. Without clear

direction and leadership, the change will fal-

ter, explains senior trainer and design spe-

cialist Gary Rascoe.

2. Lack of Focus. Another common rea-son why CI transformations fail to take hold

is a lack of focus. Senior management, as

well as the entire organization, may thinkthey are committed to making lean work,

but if management cannot articulate a clear

vision of why CI is important, or the organi-

zation has other major initiatives going on at

the same time, the undertaking will fail.

Likewise, starting a continuous improvement

journey, then temporarily putting things on

hold until other conditions change, sends the

message that management is not clearly

focused on the end goal.

3. Insufficient Resources. Allocating theappropriate resources to a project may seem

like Management 101, but it is another area

where organizations frequently stumble and

fall short on their path to continuous

improvement. Ken Koenemann, managing

director of consumer products at TBM,

advises clients, If you cant resource an

activity sufficiently, then change the scope.Take two bites rather than one, or if thats

not possible, fall back and regroup until you

have the firepower to succeed. If you dont

do thisthe organization concludes that the

improvement methodology doesnt work.

Questioning the effectiveness of lean tools

and continuous improvement programs has

been a hot topic in the manufacturing world

lately. However, any program will be

doomed to failure if it is not given the

resources to succeed.

4. KPIs dont link to CI and CorporateInitiatives. Again, you may be wondering

how an organization could make this mis-

take. But in a data-driven world, companies

overwhelmingly find themselves tracking a

multitude of metrics across multiple product

lines and in various stages of the manufac-

turing process. Clear measures and clear

results, ultimately tied properly to cash flow

and profitability, are necessary to sustain leantransformation, confirms TBM Executive

Vice President Bill Schwartz. How to deter-

mine the relevant key product indicators,

and then connect those indicators in a

meaningful way to the organizations CI

initiative, is the challenge. It is not unusual

to walk into a client and find the organization

tracking irrelevant metrics. However, once a

metric is established, companies forget t

question whether the metric is necessary

if it ties to the corporate initiatives in an

meaningful way.

5. Underestimating the size of the taLastly, continuous improvement initiativ

often fail because the size of the task is g

ly underestimated when it is first undert

en. This is particularly true if a compan

has launched its CI program in response

growing market or industry pressures. I

such cases, these organizations are implementing CI as a Hail Mary Passa qu

fix to a problem that is plaguing their

processes. Such companies will have a t

dency to declare victory too soonceleb

ing success at the first signs of improve-

mentsand thinking they have mastere

fine points of a CI program, they may c

back on education and advice too soon a

fall back into their old ways without eve

realizing it.

-------------------------------------------------

Joe Panebianco is a senior management con

sultant and director and team leader of the

TBM LeanSigma Institute. He is a forme

operations manager with broad manufactu

and business experience and is sought after

his team-building and leadership skills and

ability to help clients visualize and develop

transformational plans. Contact Joe at

[email protected] or follow his blog

www.tbmcg.com/blog.




24/24

TBM

Cons

ultingGroup,

Inc.

4400Ben

FranklinBlvd.

Durham,NC27704

www.t

bm

cg.com

PRESORTED

FIRSTCLASS

MAIL

USPOSTAGE

PAID

RALEIGH,NC

PERMIT#2483

rporate Headquartersrham, North Carolina

800.438.5535

BrazilSo Paulo

55.11.5051.7490

ChinaPudong, Shanghai

86.21.6888.6671

FranceLyon

33.472.91.32.88

GermanyFrankfurt+49(0)69.710.455.172

IndiaGurgaon

91.124.437.5995

MexicoMonterrey

52.81.50.00.91.36

United KingdomDerby

44.1332.367378

TBM LeanSigma Institute

2011 Schedule Highlights

MANAGING

Q1.11

TIMES

KAIZEN TRAININGKaizen Breakthrough Experience

Participate in a live Kaizen event at a lean manufacturing site. Experiencethe dramatic bottom-line improvement and efficiency you can quickly

achieve and sustain as your kaizen team implements lean tools in an actual

business operation

February 21-25, 2011 at SSP FITTINGS in Twinsburg, OH

Go to www.tbmcg.com/kbe for more information, to select your

kaizen team and register for the workshop.

LEAN CONFERENCELean Sigma Global SummitSave the Date! Dont miss this extraordinary opportunity to immerse your-

self in innovative, strategic thinking that will transform your continuous

improvement initiatives. Breakout sessions with rich content in four tracks.

Ample time for networking and learning.

September 21-22, 2011 Las Vegas, NV at the Green Valley Ranch

Resort.

Go to www.tbmcg.com/GlobalSummit for more information about our

early bird specials.

TRAIN THE TRAINERKaizen Instructor Training Manufacturing OperationsFour days of critical shop floor kaizen instructor training that will set the

foundation for dramatic improvement and successful culture change at the

start of each kaizen event. Learn advanced instructor presentation, training

and teaching skills.

March 15-18, 2011 in Durham, NC

Go to www.tbmcg.com/kitmo for workshop details and register for

the workshop.

CONTINUOUS IMPROVEMENT OFFICE ESSENTIALSCreating an Effective Continuous Improvement OfficeThis four day workshop will give you the strategies, tools and skills required

to quickly establish a highly-effective kaizen promotion office, confidently

chart your path of lean improvement, maintain and build momentum and

achieve dramatic, sustainable results.

April 12-15, 2011 in Durham, NC

Go to www.tbmcg.com/ccio for more information and online

registration.

TBM EVENTSThroughout the course of the year, TBM is involved in several events that

may be of interest to your continuous improvement journey. Please make

note of the URL below and check back regularly to see the conferences,

webinars and speaking engagements we have scheduled.

Go to www.tbmcg.com/events for more information.

Documents

TBM Article