The Herman Miller Performance System

Story and the Development of the Next

Generation of Operations Leaders

Ray Muscat

Herman Miller

Performance System

“Inspiring Designs to Help People Do Great Things”

Herman Miller’s Vision

• 114 Year Old Company

• $2.57 Billion Annual Sales in 2019

• 14 Manufacturing Sites, 2 Distribution Centers

• 7,600 Employees

• Sales in over 100 Countries, on Seven Continents

Global Company

• Products are

option rich

• Build to order

• Orders made from

multiple product lines

with 10 and 20 day

lead-time

• Installation

assembly done at

customer’s site

• Growing segment of

Consumer business

Facts About Our Business

…if your primary customer

demanded Lead Time

reduction of 70%, Price

reduction 30% and

minimum order quantities

of 1 or you would lose half

of your business?

What Would You Do…

Section Title

Needed to fundamentally

change our manufacturing

model

The Story begins with Tu

Tu Pedestal Value Stream

Tu Initial Condition

PLA

NNED

$6

M A

DDIT

ION

Initial Floor Condition—Plant Layout

+60

• 6000/wk

• 2 lines + 4 cells

• 3 shifts

• 126 people

• 20 min changeover

1996 Tu Pedestal Value Stream

Mr. Ohba’s challenge: 1

line, 2 shifts, 16 people

Tu Initial Condition 1996

Current Condition

• 6,000/wk

• 2 lines + 4 cells

• 3 shifts

• 126 people

• 20 min changeover

• 62 hours

• 6,810/wk

• 1 line

• 2 shifts

• 30 people

• Instant changeover

• 4 hrs

Today

1996 (Tu Only) 2014 (Combined)

Results

Results

WKS

Results

Results

Who is Herman Miller?

Our Lean Journey

Our Lean Journey

Our Lean Journey

Growing and Spreading—Model Lines

Corporate Results

Quality (ppm)Reliability

Inventory Turns

Mfg. &

Dist. Sq.

Ft.

-

3,000

6,000

9,000

12,000

15,000

18,000

1996 2000 2005 2010 2012 2013 2014

60%

70%

80%

90%

100%

1996 2000 2005 2010 2012 2013 2014

0

10

20

30

40

50

60

1996 2000 2005 2010 2012 2013 2014 1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1996 2000 2005 2010 2012 2013 2014

Continue to Expand the Value Stream

• People Development and

professional challenge

• Safer working

environment

• Reduce operator

struggles

• Job security

• Provide jobs that

add value

It’s as much about

the people as it is

the process!

Benefits for Our Employees

• Improved Reliability

• Shorter Lead Times

• Improved Quality

• Improved Flexibility

• Commitment to

Continuous

Improvement

Benefits for Our Customers

• Establish Serious top-

down commitment

• This is “HARD WORK!”

(Lace up your shoes

every day)

• You are changing your

culture—takes time!

Lessons Learned

• Established a LEAN

department led by top

management—they get

51% of the vote

• Need to find a good

coach—you will

eventually create

coaches in your

business

Lessons Learned

• Focus on the struggles

of the employees

• What can you do to

help them succeed?

—Don’t just focus on

the result you want

Lessons Learned

• Role of Leader changes

• Go and See—with your

own eyes (get out of the

conference room!)

• Zoom in and zoom out

—details and big

picture

• Become problem

solving coach

Lessons Learned

HMPS—Management System

We HATE investing in

expensive equipment!

Deep, time-consuming,

expensive investment in

developing all levels of the

organization

We have an unshakable

belief in our people, having

committed over 70 people

to our 6 month “Bridge

Program”

The Key to Our Success…

• Capture the gains &

reinvest in people

• Long term success

depends on it!

• Don’t underestimate

what they can do

when engaged

Lesson Learned

Ownership and engagement is needed from top level

leadership as a pre-requisite for success.

HMPS is a journey; it’s about singles not homeruns!

A Way of Life—Instill culture at all levels of the organization; HMPS is

flexible, living process of problem solving where you meet your customer’s

needs by engaging your workers and solving their struggles.

Reflection and learning at all levels of the organization

Here’s What It Takes

Home to Excellence in Operations

Education

Effectively Preparing Students for Careers in Operations Management

Founded in 1993: a collaboration between RSB, the College of Engineering, and Industry partners

Students:

• MBA• Engineering

Industry:

• Sponsoring Companies

• Industry Advisory Board

• Alumni (>1,400)

*

Industry Advisory Board (April 2019)

3M Company CPP Global Microsoft

A.T. Kearney Inc. Dell Inc. National Center for Manufacturing Sciences

American Industrial Partners The Dow Chemical Company Pfizer Inc.

American Securities DTE Energy Company Steelcase North America

Amazon Ford Motor Company Tauber Enterprises

Arconic General Motors Company Target

The Boeing Company HERE, Inc Tesla

BorgWarner Inc. Infosys Technologies Whirlpool

Cardinal Health Mayo Clinic

ConAgra McKinsey & Company

Larry SeifordProfessor of Industrial & Operations

Engineering

Industry Director

Ray MuscatHerman Miller

(retired)

Damian BeilProfessor of Technology &

Operations

Innovative Elements

Awarded the first George D. Smith Prize

for excellence in operations education

in 2012

Team Project Collaboration

Tauber

Leadership

Team

MBA

StudentEngineering

Student

MBA

or

Engineering

Student

Engineering

Faculty

Advisor

Business

Faculty

Advisor

Sponsor

Supervisor

Ross

Librarian

Team

Dynamics

Coach

Executive

Sponsor

Communication

Coach

Partnering with the World’s Top Companies

30.00%

16.67%

16.67%

10.00%

10.00%

6.67%3.33%

3.33% 3.33%

Operations-Focused Across All Industries

• 30 Projects (20 companies)• 72 Students

– 2 project based outside of U.S.

– Projects located in 9 states w/travel to 9 countries

– 52 Faculty Advisors– 4 Communication Coaches– 2 Team Dynamics Coaches– 6 Librarians

Per project saving and revenue generation was >$28M*

*Takes only 19 projects into account

Healthcare

Tech /Telecom Energy

Aerospace

Financial Services

Retail

Food & Beverage

Other Manufacturing

Automotive

2018 Projects By Industry 2018 Team Project Statistics

Substantive Results for Sponsors

YearNumber of

ProjectsRevenue Generation and

Savings over 3 years

2018 30 $564M

2017 31 $575M

2016 32 $460M

2015 35 $500M

2014 35 $450M

2013 35 $500M

2018 Employment Profile

The following statistics reflect input from 41 of the 50 students:

Engagement Opportunities• Spotlight! Judge

– Evaluate Tauber student team presentations of summer project results (operations experience highly recommended)

• Leadership Speaker Series– On campus speaking engagements for corporate

executives to discuss leadership or operations topics with our students and the general public

• Global Operations Conference– Annual conference, led by our students, takes

place in November with opportunities for executives to attend the event, serve on panel discussions, and sponsor activities

• Facility Tours– Opportunities for our students to observe

"operations in action“.– Companies are encouraged to sponsor tours to

support student development and to increase company awareness among student population.

– International Spring Break Trek support

Leading from the classroom to the

boardroom