the impact of a company's culture on lean intiatives - sme

The impact of a company’s culture

on Lean initiativesKirk Hazen, P.E.

Continuous Improvement ManagerLincoln Industries

• Who we are• Building a culture of trust• Architecting a Talent Based Organization• How a great culture impacts Lean• Lincoln Industries Approach• Lessons Learned

Who we are

• One of the largest US independent finishing company• Founded in 1952 • 530 PEOPLE in a 24/7 operation• Revenue in excess of $100 million• A decade of over 15% annual growth• 40+ finishing processes

• Process and quality driven• TS 16949 and ISO9001 certified• ISO14001 certified

• Blue chip customer list:• Harley-Davidson• Pella Corporation• Maytag• Tenneco Automotive• PACCAR• Freightliner

“No one cares how much you know until they know how much you care.” Author Unknown

Wellness Program

• “Go Platinum” – medal categories for wellness achievement including a platinum invite for 14,000 ft mountain climb

• Wellbucks – financial incentive for wellness participation

• Weight management (continuous offering)

• Tobacco cessation (continuous offering)

• Mayo Clinic newsletter for all people

• “Wellness Wednesday”

• Gym reimbursements

• Consumer driven health care

• Tobacco-free health insurance discounts

Communication

• One Company - One Voice meetings

• Roundtable meetings

• SHINE Newsletter

• Profit Sharing Letter

• The LINC

• Pre-shift meetings

Photo from one company one voice or roundtable

Measurement tools

• Individual Opinion surveys

• Departmental surveys

• Strategic supplier survey

• Gallup customer survey

• Great Places To Work® Trust survey

Recognition programs

• Monthly Champions events• Annual Night of Champions• Bright Ideas• Service recognition• Safety recognition• Environmental• Wellness• Quality• Birthdays and anniversaries

2004 (25), 2005 (20), 2006 (11), 2007 (11), 2008 (20)

Growth

190

530

475

550

450425

350300

240

160

0

100

200

300

400

500

600

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Personnel Growth

104

96

82

18.2

7770.1

53.645.5

35.328.3

23.919.815.9

0

20

40

60

80

100

120

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Sales Growth

• Achieved a 8% growth in sales with a 4% decrease in personnel in 2008

• Since starting our Lean Journey in 2006 Sales Growth = 26%

Personnel Growth = 12%

Personnel Growth Sales Growth

Financial results

Companies with great cultures out-perform

other companies.

Financial results“100 Best” vs. Stock Market 1998-2005

0%

5%

10%

15%

20%

"100 Best"Reset

Annually

"100 Best"Buy and Hold

S&P 5000 Russell 3000

Lean Enterprise

Lincoln Industries Lean Vision Statement:Lean is the relentless pursuit of eliminating waste as

characterized by the ability to SEE it, the courage and willingness to CHANGE it, and the discipline to SUSTAIN improvements.

Lincoln Industries Lean Mission Statement:Lean Enterprise will be accomplished through Educating to

SEE waste, providing the System to CHANGE it, and the Leadership to SUSTAIN improvements.

Lincoln Industries people

“People making a difference.”

“Those who build great companies understand that the ultimate throttle on growth is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.”

Jim Collins, Good to Great

Talent Based Organization

Vision:

“An organization with the right people, in the right seats, fully engaged andsuccessful in what they do to achievegreat results.”

“Selection vs. Hiring”


Individual Lincoln Industries Opportunities1. Fit = Culture: Beliefs & Drivers

2. Talent = Hardwiring, Natural Strengths

3. Skill = Teachable, Experience, Education

Project Engineer“Miss”

Business Development“Miss”

Area Leader“Hit”

Individual Opportunity

Area Leader

• Fit, talent and skill – in that order• Select before hiring – all the time, every time• Become obsessed with getting and developing talent• Develop a talent mind set with those you manage• Play offense


Weak Talent Literacy Strong

Talent Audit

• A formal process and tools for conducting an audit of Fit, Talent and Skill for all Lincoln Industries people.

• Drive decisions and actions that better align people to positions to increase organizational effectiveness.

• “Fit” with other people systems – Selection, Performance Management, Vision College – skill training and talent development.

HT

HK/S

HT

LK/S

LT

HK/S

LT

LK/S

Low High

High


Talent

Kno

wle

dge/

Ski

llsTalent Audit - Human Capital Balance Sheet

HT

HK/S

HT

LK/S

LT

HK/S

LT

LK/S

Hardwiring talent audit

• Right seat discussions

• Aggressive Performance Improvement Plans

• Manage out

• Leverage skills

• Technical/Functional

development

• Teacher

• “Step Up”

• PPAT

• IDP’s

• Plan next move(s)

• Compensation

• Skill training and development assignments

Culture Change

How nimble is your organization to change?

Will the team respond quickly to clear expectations?

**Patrick Lencioni – 5 Dysfunctions of a Team

How does a great culture impact Lean?

• Right people on the bus — people that fit and can bring innovative ideas to the

table

• Strengths-based management – provide people with the ability to do what they do

best

• People engaged at all levels

• People ready to make a difference — ready to implement Lean tools

• No fear of displacement due to improvements – managements commitment to our

people

• Collaborative commitment to Teamwork

• Open Door/Open Book

• Removal of Assumed Constraints

Decision Making Hierarchy• SAFETY

– Our people’s well-being is of the utmost importance– Safe processes are paramount to our business

• QUALITY– Robust and repeatable processes will provide quality products

• DELIVERY– We must meet our customers needs with the right parts at the right time and in the right

amount

• PRODUCTIVITY– We must continue to strive to produce a product that meets our customers expectations at

the best cost possible

Lean Principles

Lean focuses on: – The creation of value through the elimination of all

types of waste. – The value stream. All the activities required to put a

finished product in the hands of the customer.– Improving process flow to reduce lead times and

inventory.– Producing based on pull instead of push-based

scheduling. – Perfection of all processes and tasks

Value

efective Products

verproduction

aiting

on-utilized resources

ransportation

nventory

otion

xtra Processing

DDOOWWNNT T II

MMEE

Value Stream - MCpT

Flow

1. Strive for One – Piece – Flow

“Handle each part ONLY once and ONLY handle one part at a time.”

2. Create continuous flow to each process and through each process

Pull

1. Build based on customer demand

Your customer may be external or internal.

Work to eliminate overproduction and the assumption of good quality.

2. Replenishment of ONLY products that are required

Perfection

1. Safety

• Zero – Injury

2. Quality

• Zero – Defects

3. Delivery

• 100% On-Time Delivery

4. Productivity

• Best Cost Method

Standard Work

“Without standard work, there can be no Kaizen.” Taiichi Ohno

LI Lean Enterprise

Voice ofCustomer

CustomerSatisfaction

ProfitableSales

Growth

Safety Obsession

Lean Manufacturing Value Stream Analysis Visual FactoryBreakthrough Deployment NPD/Integration SKU Rationalization Kanban

Sales/Operations Mgt Kaizen/6 S/TPM/SW Supplier Development

TotalPeople

Involvement

World Class Quality

Unparalleled Customer Service

Best in Class Productivity

• Who we are• Building a culture of trust• Architecting a Talent Based Organization• How a great culture impacts Lean• Lessons Learned

Successes

• 2006– (6) Kaizen Events– Approx. - $300k Savings Realized

• 2007– (27) Kaizen Events– Approx. - $650k Savings Realized– Over 75 participants in Kaizen Events

• 2008– (33) Kaizen Events– 50% Scrap Reduction– Approx. – $1.7M Savings Realized– Over 150 participants in Kaizen Events– EVERYONE in the company through at least 2 hours of Lean training

Lessons Learned• It takes a CRISIS to change

– What is your crisis?

• You must gain the TRUST of your people – What is in it for everyone?

• Attain COMMITMENT at every level– How does senior leadership demonstrate their commitment?

– Gemba Walks, Kaizens

• Set clear EXPECTATIONS– How do people know what they need to do?

• Hold everyone ACCOUNTABLE to what they say they will do– What mechanisms do you have in place to facilitate this accountability?

• We must be able to MEASURE the improvement– What are the metrics that will set the direction and show improvement?

• Continually CELEBRATE successes and learn from mistakes– How do you celebrate positive changes that are made?

Conclusion

Questions or Discussion

the impact of a company's culture on lean intiatives - sme

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