I came across an article a few days ago that described a project launched by Intel to have some of their people attend a school for auto racing pit crews. The theory is that they can learn about speed, equipment maintenance and process optimization. It struck me a s gimmicky sort of thing. I get a bit turned off by such articles that find parallels to lean in everything in the world that happens fast. And Intel is hardly lean. They are about the worst there is for beating the bushes of the world looking for people who will work for nothing. The Intel top dog recently justified that practice by saying that it cost a billion dollars (yeah, billion, with a ‘b’) less to build a plant in India than in the U.S. The only way I can think of to save a billion on bricks and mortar is to build the plant without safety and environmental equipment, and to leave some of the details like employee restrooms out of the design. But that’s India for you. This is not about Intel, though. I promised to keep the next post positive, and I will.
I don’t want to talk about Intel – I want to talk about La-Z-Boy. I can tell you from years of extensive personal research that they make an excellent product. I have also felt for a long time that they named their company and those first class products after me.
The management at La-Z-Boy has been wrestling with enormous pressure from low cost overseas competition and the furniture manufacturing business is about as decimated by the Asians as any sector of American manufacturing. In response, La-Z-Boy has gone through some plant closing and offshore outsourcing of their own, but at the same time they are changing their business strategy and getting the remaining plants very lean. They sent a big contingent to last year’s Lean Accounting Summit, in fact.
I can get downright unreasonable in blasting every company that sends manufacturing work to Asia, and I am not sure that La-Z-Boy could not have done better to keep the jobs lost here, but I have to admit that their approach is probably very practical. It certainly has been effective. The connection to Intel is that La-Z-Boy recognizes the competitive value of time. Their plant in Dayton, Tennessee has become very, very lean. Production cycle times have improved by 600% since they embarked on their lean journey, and they are that fast in quantities of one. As a result of that phenomenal speed, while La-Z-Boy has basically conceded the high volume products to the Asians, it is cornering the custom products market with American made stuff. And in the process, they are redefining the furniture business.
Another furniture maker – Vaughn-Bassett can make and get anything to anyone in their US market within 10 days. You gotta like the way their Executive VP, Wyatt Bassett, thinks. “Some companies see this [outsourcing overseas] as their only way to exist,” says Bassett. “They feel they need to become distributors instead of manufacturers. It’s a ‘throw in the towel’ philosophy.” He says passion is one of the keys to success and it has to start at the top. He also urges patience, and most refreshing, he suggests that manufacturers simply ignore all of the regulatory and economic advantages enjoyed by Asian competitors – no point in getting depressed about something you can’t change, I guess. Instead, Bassett thinks manufacturers are better off focusing on things like teamwork. "Teamwork with suppliers and customers is important. Even more crucial is teamwork within an organization. Get on the factory floor and spend time on manufacturing and operational issues. Everybody should be a part of the manufacturing team, including sales and marketing, traffic, etc. Everybody should be thinking about how the company is going to be operational today. Operational excellence is still the most important factor, so it is vital that everyone be on the same page."
And I almost forgot to mention – not only can Vaughn-Bassett get the furniture you want three times faster than the Asian competitors, their sales production volumes are up 25% without having to add a single additional person to the payroll. It looks like Wyatt and the other Bassett folks who run the place know what they are doing.
Those kinds of stories are becoming pretty common. Lean manufacturing is most powerful when it is coupled with a marketing strategy that takes advantage of the speed advantage lean manufacturers enjoy. I wrote about DeCardy Diecasting doing the same thing a few weeks back. A Chinese or Indian manufacturer can get you their products cheap. But it is going to be the standard configuration, take them an extra month and the minimum quantity is a container load. A lean U.S. manufacturer can get you one built exactly to your specifications, in any quantity you want, and it will be there a month sooner.
The problem many companies have in bringing lean results to the bottom line is in their failure to build lean manufacturing capability into their overall business strategy. They leave half their guns in their holsters by insisting on selling standard configurations in big quantities. It is insane to have the manufacturing people driving the plant to become leaner, while the sales folk are out offering volume discounts. SMED and kanbans don’t improve things much when the plant is fed order quantities of ten thousand.
That, of course, is the fundamental hole in Ford’s "Way Forward" scheme. It is built around the dream of conjuring up a car design that will sell in staggering quantities. It seems as though they, and a good many American manufacturers – looked across the Pacific and decided to emulate the wrong Asians. They want to run American plants like they are in China, instead of Japan. It’s about time somebody told ’em they don’t have to ship in container loads to customers in their own country.
On a completely unrelated note, everyone should be heartened going into the weekend by reading about the ‘lean bus’.As the old saying goes, ‘If Mohammad won’t come to the mountain (or in this case, can’t come to the mountain), then bring the mountain to Mohammad". The Louisiana State University business school has outfitted an old bus, made it into a mobile classroom, and they are roaring into New Orleans this weekend to take training – including lean manufacturing training – to the small outfits struggling to recover from Katrina.
I haven’t been much of an LSU fan in the past, but I am now. Go Tigers!