Art Byrne is an execute that has been implementing lean in several companies around the world. He started our with GE and gained experience with Danaher Corp before becoming the CEO of Wiremold where their lean turnaround is featured in the book “Better Thinking, Better Results“. Since leaving Wiremold Art has used lean to turnaround companies as a partner with J.W. Childs Associates. Art brings his vast experience to the readers.
Name of the Book: The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company
Author: Art Byrne
Publication Date: 2012
Book description: what’s the key message?
Art really drives home the message about a company can only be truly lean if the leaders are setting an example and leading the way. A lean executive does not dictate what others need to go do. A lean executive does it himself.
Also, the executives have to transform the people. Get everyone to buy-in from the shop floor to the executive suite. There is no room for people that won’t buy-in. In order to do this, as the leader you need to engage in the change and lead it. Not support it.
Art lays out his principles to follow to becoming lean:
- Work to Takt Time
- Create one piece flow
- Utilized Standard Work
- Connect Customers to Work by Using a Pull System
What are the highlights? What works?
Art does a fantastic job of giving multiple examples of how he engaged employees and led the change even as a CEO. This brings to life how it can be done and the thought isn’t some dream a consultant made up.
I really like how Art lays out obstacles to achieving his lean principles. Accounting and standard costing is the biggest obstacle because it can show a negative result or cause bad decisions when doing things that are helping. He then explains the changes that are needed and gives examples of the changes and how the finances would look different.
There are more examples of other metrics that Art recommends for a lean company.
Another powerful section of the book is how he used lean to grow businesses and profits even during tough economic times. Art even lays out a strategy for looking at companies when thinking about acquisitions.
The real life examples as a CEO and board member of companies really drives how a lean turnaround can be achieved. A CEO must do a 180 from the traditional methods to do it and a leap of faith will be needed, but the reward is very high.
What are the weaknesses? What’s missing?
This is a really good book, but I do see one thing missing. Art speaks from a CEO or executive viewpoint, which is great, but what if you aren’t an executive?
One question I would like to see answered is how do lower level employees help executives want to do a lean turnaround? Sure, one answer could be give them the book, but that probably won’t change everyone’s mind with just a single read. How do you help an executive that seems to want to do it, do it? Give them that final push and really start to see the benefits?
The book can also give the feeling that if you don’t have an executive leading and doing everything in the book then you might as well not go through with lean because you won’t be successful. Art does not say that explicitly. The book just gives that feeling.
How should I read this to get the most out of it?
I recommend this book for anyone but especially high level level executive or CEO. Art lays out a great game plan and a compelling case for the executives to transform their work and create a lean turnaround. Read the book straight through and then re-read it as you develop a plan to change your company.
I would also recommend it for more Wallstreet and finance people. It would enlighten them on how to look at companies that deliver long term value to their customers. Not just short term gains.
Company Background / History
Milbank Manufacturing is a 3rd generation family owned and ran business. It was founded in 1927 by Charles A. Milbank. The 1920’s was a rough time to start a business but with the philosophy to provide their customers with high quality products at a fair price in a timely manner and Charles’ network of friends and determination, Milbank built a strong base of customers. Today, Milbank is the industry leader in the manufacturing of electrical meter sockets.
Milbank provides wholesale electrical distributors with quality electrical products for the utility, contractor industrial and OEM markets. Their products are divided into three platforms: Core Products (primarily meter mounting equipment and pedestals), Commercial and Industrial (electrical enclosures and commercial meter pedestals), and Power Generation (standby generators and wind turbines).
Milbank has over 500 employees and four manufacturing facilities (Kansas City, MO; Concordia, MO; Kokomo, IN; and El Dorado, AR). This post focuses on the lean efforts and success of the Kansas City, MO manufacturing facility and the Plant Manager that lead the transformation process during the last 6 years, Mr. Trace Tandy.
Trace Tandy’s Background in Lean
Mr. Tandy is currently the Vice President of Manufacturing for Milbank. His first exposure to the concepts of Just-In-Time manufacturing ocurred in the late 1980’s while working for a Tier 1 automotive component supplier. He joined Danaher in 1990 where he learned the Toyota Production System from the Shingijutsu Co.,Ltd. consulting company. Later that decade he had the opportunity to receive further training and development in the Lean principles through the Toyota Supplier Support Center (TSSC). Mr. Tandy has lead nine manufacturing sites through the Lean transformation process with the most recent site, Milbank’s Kansas City plant, winning the TBM Consulting Group’s 2010 Quest for the Perfect Engine Site Award.
How Millbank Started It’s Lean Journey
Elements of Lean manufacturing or similar philosophies had been attempted between 1998 and 2004 with little or no sustainment and with no evidence of a plan. In 2004, Milbank re-engaged with a commitment to the Lean principles on an enterprise-wide level. Milbank partnered with TBM in 2007 and began using Lean Sigma tools, including Shop Floor Kaizen Breakthrough (SKB) and Business Process Events (BPE) and later, the policy deployment x-matrix process. Employees at the shop floor level became more engaged in the improvement process and there was an unwavering commitment from top management to truly transform Milbank using the principles of Lean.
Results from Lean Efforts
Before the lean efforts, the manfacturing in Kansas City was spread across two buildings plus a third that was used for warehousing. Now everything is done in one building. Using the Lean Sigma methodology during the couse of 2007 – 2009 they were able to:
- Completed 38 SKB / BPE kaizen events
- Created a 3 year plan / vision for consolidation of the two Kansas City manufacturing sites
- Implemented a policy deployment process based on the TBM x-matrix
- Implemented a War Room / Managing for Daily Improvement (MDI) process
- Implemented visual management systems such as Leader Standard Work, Maintenance Scheduling, etc…
- Implemented U-shaped, one-piece-flow assembly and fabrication cells
- Implemented visual scheduling / shop-floor-control systems eliminating the use of MRP in many areas
- Reduced floor space utilized by over 47% (60,000 square feet of manufacturing space opened up for future expansion, no brick and motar required – eliminated the need for a 30,000 square foot remote storage facility – property was sold)
- Reduced lead time by almost 53% (reduction of 30 days)
- Improved stock availability from 90.6% to 95.6%
- Improved sales order on-time performance by nearly 50%
- Reduced FG inventory values by over 50% ($2.42 million in cash generated)
- Reduced WIP inventory by 83% ($1.14 million in cash generated)
- Improved FG Units / Employee by 12.3%
- Implemented annual cost reductions averaging $1.22 million
Milbank will not tell you they are done. In fact, they have plans laid out to improve even more over the next few years. Their mindset is to keep improving and never be satisfied.
As you can see Milbank Manufacturing is a great example of how lean is helping manufacturing in America not only stay viable but become the industry leader.