Lean Culture

Collected Practices and Cases

Productivity Press Development Team

• Publisher: Productivity Press
• Year: 2020
• ISBN:
  9781000285642
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Finanzas corporativas

The hard part of implementing a lean transformation, according to most experts, is dealing with the "soft" issues, such as culture change. Getting employees to live and breathe lean -- actively supporting and buying into lean concepts and philosophy, always searching for ways to eliminate waste, and continuously improving processes and providing greater value for customers -- is the real challenge when building and sustaining a lean culture.

Lean Culture: Collected Practices and Cases provides a variety of case studies taken from articles previously published in Lean Manufacturer Advisor: the monthly newsletter by Productivity Press. All focus on cultural issues, ranging from the role of top management, to training and development of workers and managers, to building buy-in and to sustaining the culture.

Highlights include:

• Practical, in-depth descriptions of cultural issues in a lean transformation, written in a conversational, easy-to-read style.
• Many case studies unavailable from any other single source.
• Articles categorized by specific area - all desired information is easily located.
• Real-world information about culture change collected in one handy book.

Part I
Building Support

OVERVIEW

Sometimes the most perplexing challenge facing a company embarking on a lean transformation is how to get started. Sometimes it is the question of how to expand an initial effort to get everyone in the company on board. The chapters in this section help address both of these issues.

We begin with a case study of Hartz Mountain, where strong top management support for lean was already in place. That support came from new management as they assumed leadership of a company with no history of lean. This chapter chronicles how an aggressive management style helped achieve rapid improvement while also transforming company culture.

While perhaps not as aggressive as the leaders at Hartz, top managers at Jabil Circuit were also determined to transform their entire enterprise. Their approach - training, new incentives, changes in processes - is outlined in Chapter 2.

Executives at Tigerpoly regarded culture change as being so critical to their plans for a lean transformation that they made cultural issues their top priority. Chapter 3 describes their efforts to strengthen the level of expertise among managers, provide training to the workforce and begin their transformation cautiously, with a pilot project.

One often-overlooked aspect of enabling culture change is the role of the human resources department, both from a support and management perspective, and in regard to training. Chapter 4 explains how the HR department at Aeroquip Inoac has contributed to the transformation of that company’s culture.

Employees will only buy into lean culture change if they believe that they are a part of the culture, and that their opinion matters. One way to build that belief is to have an active suggestion program, in which not only are employees encouraged to offer ideas, but the company takes those suggestions seriously and acts on them. The Sensormatic plant in Puerto Rico has developed such a program, described in Chapter 5.

Building buy-in can be especially challenging when the workforce is unionized, particularly when the union and management have not been on the best of terms. Chapter 6 discusses how union workers and managers at the Lukens steel plant overcame their animosity to transform operations and build a new culture.

Sometimes lean initiatives lack top management support. For those middle managers trying to convince higher-ups of the value of lean, Chapter 7 offers some words of wisdom from Art Byrne on how you can sell lean to your CEO. As the former CEO of Wiremold, Byrne speaks with authority.

Sunstar Butler is one of those companies that began lean without top management backing. Chapter 8 explains how a few managers there launched what was almost a surreptitious campaign to win over its leaders, using the success of early efforts to make the case for an enterprise-wide transformation.

Which strategies and tactics work best for you will depend on your particular situation. But the range of approaches described in these tales will almost certainly give you some ideas for building support within your own company.

1
Aggressive Management Builds a New Hartz Mountain Culture

July, 2003

Dr. A1 Gunneson, corporate vice president for strategic advancement at The Hartz Mountain Corporation, describes plant manager Bill Judge as a malcontent.

That’s a compliment.

In fact, it’s one of the reasons Judge holds his current job, managing the nearly 400 employees at the company’s main manufacturing site in Bloomfield, N.J. Following a leveraged buyout in 2000, and a decision to aggressively transform Hartz using lean manufacturing principles, “we wanted to promote from within,” Gunneson recalls. “We took people who were aggressive and somewhat malcontents, frustrated with the way we do business, even if they haven’t done the job before. We take bright people and put them in over their head, with the understanding that they can come to us for mentoring and it won’t be taken as a sign of weakness.”

Vice President Dr. Al Gunneson, Hartz Mountain

Gunneson likes to shake things up. Since joining Hartz in 2001 to help lead its transformation, six out of eight vice have left the company, reductions inventory were achieved within a time by rapidly closing warehouses, production lines have been redesigned raw material supermarkets created to production.

plant Manager Bill Judge

The efforts are already producing benefits for Hartz. For example, inventory was valued at about $70 million at the time of the buyout; the number has since dropped to somewhere in the mid-$40 million range, and executives hope to bring it down to around $33 million by the end of this year. That’s just one of a range of improvements achieved so far (see sidebar, page 6).

In addition to the financial benefits, Hartz is already well into a transformation of its corporate culture. From the corner offices to the shop floor, a striking enthusiasm is evident among employees. Production managers talk about their jobs with smiles as they describe improvements that have been made.

Such a change does not come from just one person. In addition to working closely with Hartz President Robert Devine, Gunneson is joined in his efforts by Judge, a 10-year company veteran promoted to manage Bloomfield, and Bill Martin, a 27-year veteran who was promoted from vice president to chief operations officer. They seem to share Gunneson’s passion for the business and his energy for the job. Moreover, they follow his lead in pursuing an aggressive, hands-on management style while simultaneously seeking to empower employees and encourage their efforts.

It’s all part of a very deliberate, detailed strategy to take a traditional manufacturing company facing a variety of problems and “make the elephant dance," as Martin said when he and Gunneson spoke at the 2003 Logistics Forum, a conference sponsored by Richmond Events. Their efforts to create a new sense of urgency at Hartz — which include working with several different consultants — are based on specific, clearly stated goals and objectives (see sidebar, page 8). And at the forefront of those efforts is an aggressive push for change through a direct management style designed to quickly convert employees to the new culture, eagerly welcoming those who join in — and pushing aside those who don’t.

Hartz now stores raw material in supermarkets near production lines like this one at its Bloomfield, NJ plant.

A Fearless Blitz

Hartz, whose headquarters are in Secaucus, N.J., is a name well-known among pet owners. The almost $400 million company’s products range from food for birds, fish and small animals, to flea and tick solutions, to toys for pets.

The family of founder Max Stern operated the company for more than 75 years, but then spun it off to an investment group including members of Hartz management in December, 2000. (The Stern family still operates a real estate company under the Hartz Mountain Industries name.)

Substance Along With Style

Some of the accomplishments at Hartz since the lean transformation was launched a little over two years ago include:

• The value of inventory has declined by nearly $30 million. Inventory turns have increased from around 8 or 9 to as high as 35, in some categories.
• SG&A (selling, general and administrative) expenses went down last year by about 12 percent.
• Efficiency, measured in pieces per man hour, went up from 75 percent to 98 percent.
• Changeover times have been reduced significantly — typically from a few hours to a few minutes.
• Approximately 56,000 square feet of floor space have been freed up, enabling Hartz to transfer some operations from other locations to Bloomfield. More space improvements are coming; for example, the company is in the process of consolidating six separate maintenance shops within the Bloomfield site into one.
• Shipments of products to Wal-Mart now go directly from the Bloomfield plant, rather than going first to another Hartz location in Jersey City, N.J. for further processing, saving $350,000.
• More than 85 percent of all shipments are now full trailer loads, rather than LTL, or less than trailer load. LXLs used to make up the majority of shipments. The change has yielded significant cost savings.
• Overtime is down from about 8,800 hours per month to 800 per month, equivalent to a 220-person reduction.
• Service levels improved from around 86 percent to better than 98 percent.

Without the Stern family’s support and with a new debt load, operating fundamentally more efficiently suddenly became a top priority for newly-independent Hartz. Gunneson originally was brought in as a consultant to help launch the lean transformation. However, since Judge had never been a plant manager before, and since COO Martin, who previously worked in areas such as finance and distribution, was becoming involved in manufacturing for the first time in his career, Devine wanted additional executive-level expertise in manufacturing and asked Gunneson to join the company full-time.

Redesigned production lines at the Hartz Bloomfield plant take up significantly less floor space.

“When the place is on fire, you’ve got to come in and hit it with an extinguisher,” Gunneson declared during a recent plant tour. “We had to blitz the company, to put out fires and recover ‘quick hit’ cash fast. Then we focused on the new culture, which allowed concurrent streamlining and re-engineering to be effective and lasting.”

A key principle of the new culture is making “radical change without fear of failure,” he adds. “I told people I want big, bold mistakes. They looked at me like I had two heads. But it’s because I want big successes. On the ones that don’t work, fail fast and get on to the big winners.”

Voices From the Floor

One example of how the culture change is permeating the company is Larry Cortale, a production manager, who Gunneson says used to be “always in our face” as well as “unhappy” and “cantankerous. So we promoted him.”

“The way we were going, 1 didn’t think we’d survive,” Cortale says. But today, “to me, it’s like running my own little company. We decide ...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• Introduction
• Part I: Building Support
• Part II: Staff Development
• Part III: Sustaining Change
• Citations
• Index