The Masco Mapmakers

Perhaps the American manufacturer from which the best lessons can be learned is Masco.  They are a very big building products manufacturing outfit – actually a collection of a lot of building products manufacturers that they are herding into a more orderly grouping – based in Michigan.  They have been at lean very aggressively for a dozen years and have been making money.  Masco is a public company, but the Manoogian family – the descendants of the old man that formed the company a little over 75 years ago – still swings a big enough stick to keep things going the way they want.  The descendants of the companies Masco acquired own even more then the Manoogians, so there are a lot of loud voices that don’t speak with a Wall Street accent in their boardroom. There are a couple of aspects of their lean effort worth a good long look.

For one, they are big on what they call the ‘Grand Kaizen’.  Grand Kaizens are week long events that pull executives from a bunch of Masco companies together to participate in real kaizens at one of the Masco plants.  Guys from Brasscraft or Morgantown Plastics might go to a Delta faucet plant for the event – and note that these are executives, not factory level folks – that spend the week working on the kaizens.  Of course, the Grand Kaizens are not the only ones.  Individual plants hold their own kaizens by the hundreds. The primary purpose of the Grand Kaizen is to spread the lean message throughout the company.  They learned that having the top people work hands-on in a kaizen was a lot more effective than sitting them down in a big room and subjecting them to a Power Point description of lean.  This seems like a very good way to spread the word – the folks from Ford and Delphi might want to take notice.  I think that taking away Bill Ford, Steve Miller and Rick Wagoner’s cell phones and laptops, then sending them off to an out-of-the-way plant to spend an entire week on kaizen might teach them something.

Another aspect of their lean approach is the absence of a standard lean prescription.  They know that lean includes a big tool box and that using the right tool for the right opportunity is the key to success.  They do not ‘value stream map’ everything or ‘six sigma’ everything.  They value stream map when that fits and six sigma when that is the best tool to use.  Sometimes they use tools that are not commonly thought of as lean, or they make up the solution as they go along.  The folks at Masco understood the points in Art Smalley’s insightful article before he wrote it – which means they understand the real keys to success in the Toyota Production System.  They seem to understand the difference between looking lean and getting lean results.

The Global Reporting Initiative is an idea with a few pros and cons done in collaboration with the United Nations in which the stakeholders of big companies collaborate to evaluate and publish the level of "economic, environmental, and social dimensions of their activities". There are a lot of good reasons for companies to refuse to open their kimonos to the U.N., but Masco did it a few years ago and the report is remarkable.  Among other things, it describes Masco company Merillat’s Shingo Prize winning accomplishments. How the various Masco companies recycle and reuse material once viewed as waste is like something out of Henry Ford’s book.

Masco company, KraftMaid, has a ‘total immersion’ program where they take a manufacturing person and send him or her off on a year long sabbatical to do nothing but visit other manufacturers around the world, benchmarking and picking up best practices.  They give the person direct orders to not call the plant while they are gone – they want ‘total immersion’ in the learning effort and don’t want him worrying about the day to day stuff at KraftMaid.

There is a disturbing element of the Masco story, however, that indicates that Jim Womack’s assertion that lean may not be enough might have merit in some cases.  Despite all of their lean success, some Masco units are steadily increasing their Chinese sourcing.  While there is no reason to think that the automotive industry has to find cheap labor to succeed, there is every reason to think that the rules of the Walmart supply chain are so tilted against American manufacturers and so biased toward Asian suppliers that even a lean company may not be able to succeed.  One Masco company – Alsons – noted that reducing cycle times for made to order products to three days gave them capabilities beyond customer needs, and therein lies the problem.

The logistics strategy pursued by Walmart centers around a multi-billion investment in warehouses, people, equipment and technology.  That means a lot of fixed costs.  It also means the incremental logistics cost of adding one more Chinese supplier to the Walmart distribution monster is minimal – and the incremental savings from having an outfit like one of the Masco companies offer short lead times and small quantities if also minimal.  With the lean savings from shorter cycle times off the table, it is awfully hard for an American firm to compete.  Luckily for Masco, they do as much business with Home Depot as Walmart, and Home Depot’s business model is very lean friendly. Perhaps Masco’s Chinese investment will be minimal and their lean U.S. plants can continue to flourish.

All of the lean issues of implementation, sustainability and American lean versus low labor country outsourcing seem to be swirling around the Masco folks, and they deserve a lot of attention.  So far, they seem to have laid out a pretty good roadmap for the rest of us to follow.  All we have to do is follow the map.