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Minnesota Technology Magazine - Winter 2007

Chapter Two

Getting lean isn’t always easy. But taking the approach to the next level can often prove profitable for businesses willing to make the commitment. And once the extra fat has been trimmed, there’s room for more healthy growth.

In the printing industry, a company is considered quite successful if it can do $100,000 worth of sales per employee. And Mankato- based Corporate Graphics International was doing that. But thanks to more than a decade’s worth of efforts to improve quality, shorten lead time, and improve customer service, it’s now passed that figure. “We do $185,000 per employee,” reports Randy Dombrovski, the president of the company. “That’s pretty unbelievable.” That’s also pretty lean.

BY SARA GILBERT
Sara Gilbert is a Mankato-based freelance writer.

Image of Bob Buland and Randy Drombrovsky

Bob Buland and Randy Dombrovski,
Corporate Graphics International

Over the last few years, Corporate Graphics has worked extensively with MTI to get lean—eliminating waste, enhancing productivity, and focusing on continuous improvement—as part an initiative to implement quality management systems. Bob Buland, the company’s director of quality management systems, says it has used lean tools to streamline production lines and to free up significant square footage in its facilities, for example.

But unlike other firms that start a lean program and then lose interest, Corporate Graphics has made a full-scale, top-down commitment to the concept. That’s the only way to sustain and maximize the gains, Dombrovski notes. “If you take the lean tools and try to just drive them in, you’re doomed to fail,” he says. “You need a cultural shift to make it work.”

“Getting the tools and the knowledge is only about 20 percent of the challenge in lean,” explains David Ahlquist, an MTI business services consultant who has been the organization’s Lean Enterprise team leader for the past three years. “Changing the culture—the communication, teamwork, and management— is the other 80 percent of the challenge. Learning the tools is the easy part; getting them ingrained in the culture takes more work.”

But the work is worth it. Taking lean to the next level can often prove profitable for businesses that are willing to make the commitment. With the fat gone, there’s room for growth. “You’re only part of the way there if you just target the waste,” Ahlquist says. “Once you get that out of the way, you can free up capacity, generate more sales, and flow more value to your customers.”

A PEOPLE PROJECT

The first key to a successful lean implementation is buy-in from all the people involved—from the very top to the very bottom. Although lean tools often have the most visual impact on factory floors, they can only be successful if they’re understood and appreciated by the company’s leaders. And at the same time, implementing lean changes will be most effective and have the most impact if the workers on the floor have been both involved in the process and empowered by the changes.

But it may be the people in the middle who matter the most. “The middle managers are the ones who get all kinds of requests and questions from below, and at the same time they get pressure from the top,” says Mike Braml, an MTI business services consultant. “I believe that once you’ve learned the basic tools of lean, the next area of focus needs to be an investment in that first tier of management, helping them to sustain the gains and providing them with additional motivation to move forward and get people excited about the prospects.”

This is where Braml introduces the concept of Training Within Industry (TWI), which provides a framework for managers and employees to apply lean principles. “It’s a natural complement, and an integral fit with lean,” he says. “Lean tools attack the processes; TWI addresses the people. You need to have both.”

TWI involves addressing three modules in a multistep process: 1) job relations, which focuses on unifying a workforce to work together and direct its energy into solving problems; 2) job instruction, which teaches managers how to quickly train employees to do their jobs correctly, safely, and conscientiously; and 3) job methods, which train supervisors to continuously improve the way jobs are done.

Braml likens TWI to mortar. “When you think about the lean tools that people are familiar with, then TWI is what holds it all together,” he says. “It’s the investment in the people that makes the improvements stick.”

Braml adds that lean has a better chance at long-term success if it’s supported by a program like TWI. “Lean can sometimes get a bad rap because companies start on it and then lose focus or management gets off on another flavor of the month,” he says. “That’s when things fall down. But by reinvesting in this level of management, you can sustain those changes.”

LEANER MEASUREMENTS

For any gains created by lean processes to be sustained, they need to be woven into the company’s strategic plan. “You want to be sure that each company looks at its business objectives and at how lean will support those,” Ahlquist says. “You’re going to invest a lot of time, money, and energy into going lean, and if it’s not supporting the business objectives, it will be hard to maintain.”

The key, then, is to set up metrics that demonstrate the importance of lean processes to achieving business objectives. Can you show that lean helped shorten lead times? That it helped cut costs? That it helped improve delivery times and enhanced customer satisfaction? That, in the end, it contributed to the growth of the company over time? “You need to set up your metrics around lean,” Braml says. “They have to be simple, but they have to be tied to your business strategies. Most companies have to completely redefine their whole measurement system.”

Dave Ahlquist, MTI Business Services Consultant

THE THREE RULES OF LEAN

That’s because lean measurements are by their very nature different from traditional measurements, says MTI Business Services Consultant Kent Myhrman. He encourages businesses to focus on what he calls “the three rules of lean:”

flow is more important than efficiency
finishing is more important that starting
improving is more important than starting

It helps to understand the three rules first, of course. Flow, Myhrman explains, is a measure of a company’s efficiency, but one that emphasizes tying all the different pieces of a process together. “It’s about how to have a constant emphasis on improving flow of work through an organization,” he says.

Finishing is more important than starting because a project that starts and stalls wreaks havoc on a lean system. “It’s better to keep it out of your flow until you’re ready to actually finish it,” he says.

And improving is more important than perfection because it allows companies to take advantage of lean’s bias toward action, even if that action includes two steps forward and one step back. “At the end of the day, that’s still progress,” Myhrman says.

One way to measure such a system’s success is through value stream mapping, a tool that demonstrates how the flow of work affects products and services. The goal, Myhrman says, should be to continue implementing new value streams until the entire company is organized by value streams instead of departments. One value stream should be complemented by another within a set matter of months. “If I go back into a company in three months and it hasn’t started the second version of a value stream, I consider [the project] to be a failure,” he says. “The goal is to get it to a model of continuous improvement.”

Eventually, every process should be organized through a value stream. “When you’re very high end, department names become value stream names,” Myhrman says.

Another good measurement is the ratio of lead, or nonvalue- added, time, to value-added time. “If it takes a whole day to process a part, it may take one month to get that part through the facility,” he explains. “That’s a normal, and in some industries, a very good ratio. I would like to see the ratio being 10 to 1, so that if you would spend one hour working on the part, then it would be finished in one day.” That number, he adds, should be continuously improving.

Finally, Myhrman suggests that companies should measure the number of improvement projects that have been implemented per person. “That tells you that you’ve got everybody involved in making improvements to the entire organization,” he says. “You want to do whatever it takes to get the most improvements you can.”

CONTINUOUS IMPROVEMENT

The overarching theme to staying successful with lean is to keep improving. The MTI team of lean specialists think of it in terms of “the house of lean:” the tools form the structure, but the roof over it all is continuous improvement. “It’s an ongoing process,” Braml explains. “It more of a philosophy than a set of tools. You need to do assessments on an ongoing basis.”

Those assessments might mean using new tools in new places. Most firms, for example, introduce lean on the production floor. “Often, people start on the floor and just analyze it to death,” Braml says. “But they stay pretty hands-off in the office. When you apply lean there, however, you’ll see significant reductions in turnaround times and you’ll see prices start to drop. Then margins go up, and everyone is happier about the outcomes.”

Everyone will be happier if they can actually understand the benefits of lean. And that goes back to making it part of the corporate culture, as Corporate Graphics has done in Mankato and at its five other facilities across the country. When the company made a commitment to quality management systems, including lean, more than a decade ago, the most difficult step was to first persuade the leadership and then the people on the floor to buy in. “It’s a change, a different way of thinking,” Dombrovski says. “We realized that what had to happen was a cultural shift. We had to build an environment where this could succeed.”

The process took a full two years and resulted in several staffing changes, but by 1997 the Mankato plant was ISO certified; three more of the plants will be certified by the end of 2007, Dombrovski says. The application of lean concepts has played an important role in introducing quality management systems to each facility. “Applying lean concepts at each plant helps us get a barometer for where our leaders are and for who might be willing to jump on and embrace the idea,” Dombrovski says. “It has helped us introduce the entire environment to the concept of quality management systems and to start getting a feel for which employees and leaders will jump on board with this.”

It isn’t hard to get leaders to jump on board in the midst of highly visible gains. Buland lists examples of the “wins” the company has seen: streamlining three production lines down to two at a fulfillment facility in the Twin Cities, freeing up 4,000 square feet of floor space at a California plant, and reducing downtime for both machines and operators at other locations. “It all depends on the facility, on where they’re at with things,” he says. “We try to apply the right tool at the right time and place.”

That may be the essence of integrating lean into the fabric of an organization. Eventually, the goal is that it perpetuates itself. “The gist of it is making lean ingrained in the culture so that it’s self-sustaining,” Ahlquist says. “You have to get the employees to embrace the idea of continuous improvement. Because if there’s one thing about lean, it’s that it’s not about a few big wins; it’s about a lot of small wins and a lot of small improvements that add up to make some big changes.”

Note:
To find out how MTI’s Business Services can help with your lean initiatives, click here.

Photograph of Dave Alquist taken by Jason Wachter.