Going Lean: ‘A Million Little Changes’

Ross found this out the hard way. The company began its journey toward lean as many companies have—by focusing on just the manufacturing end of the business. “We were not concerned about lean outside the plant floor,” he said. “But our culture did not match what we were trying to do,” he explained.

What Ross found out, and what the company has put to practice, is that lean begins at the very top of the organization, and then it permeates throughout the entire organization including aspects of manufacturing, engineering, marketing and even accounting/finance.

“Imagine lining up all these silos [the different aspects of the business, which often operate as separate entities], and having a base.” Once those silos and the people within them understand what goes on in the other silos “eventually the silos themselves go away,” he explained.

The new way of lean for Ross, then, became building a culture within the entire structure, he adds. One of the first steps was creating a learning organization so that everyone was viewed in the same light, everyone’s daily job was understood and everyone was looking for lean, he said.

To implement a companywide lean ideal, Ross created a PATH team: People who report directly to the president on: the best Processes for what the company does, Accountability for everyone, better Throughput (speed at which things occurred) and High agreement (getting buy in throughout the organization). The PATH team then directs PATH plus, which are all the people who report to the team members.

Some examples of specific action Ross took or that Smith espoused as lean practices were:

Processes. Establishing standard costs for specific labor hours reported “is a big pain. We are a high variation company doing lots of different jobs so we got rid of it” (labor reporting/standard costs), Smith said. The company now measures levels of success by taking sales and dividing it by inventory. It also measures what gets done on the floor, as well as safety, quality, costs, delivery and morale in the manufacturing process lines.

Communications. Some of the simpler ways to make improvements have to do with communicating. For example, the company asked employees sending emails to consider the “to” line only for those who must take action, while “cc” is for informational purposes. This eliminates a vast number of unnecessary emails such as those that read: “I’m away for half a day.” The company also cut way back on financial reports since most end up in files without being read.

Considering the intangibles. The goal when it comes to supervision of people is not to eliminate individual personality, but instead to find ways to use that personality more advantageously, Smith pointed out. Ross also looks at employees as its intellectual assets and seeks to listen to their ideas.

Motivation. When it comes to what motivates employees, Smith pointed to some traditional views such as: employees are averse to effort, they need rigid rules, they are driven by pay, they need minimal amount of communications, they operate best with narrowly defined rolls, etc. Instead of following those views, the company motivates its employees by taking a different approach, such as:

• Eliminating the “I’m the only one who can do that” mentality through cross training and other efforts.
• Discouraging “malicious obedience” by letting staff know that those who move up are not those that do something just because it’s easier than fighting it.
• Encouraging empathy. “If someone is not good, you put your arms around them and ask: how can I help? If you’re grumpy, the people around you will be grumpy,” Smith pointed out.
• Creating an atmosphere of teamwork: As Smith noted, most people are intrinsically motivated if they feel they are part of a value team that strives for excellence.

Smith explained that the company has seen tangible improvement each year of the program including double-digit productivity improvements, drops in cost of sales, improvements in sales-to- inventory rates and improvements in delivery times.

Still, “the journey continues,” Smith says because going lean means “a million little changes, not one big hit.”