Two American Manufacturing Pioneers Share their stories:
Leading the Lean Enterprise Transformation, Second Edition, by George Koenigsaecker, CRC Press, 2012 AND
The Lean Turnaround, How Business Leaders Use Lean Principles to Create Value and Transform Their Company, by Art Byrne, McGraw-Hill 2013
When George Koenigsaecker started out in manufacturing, he saw the ugly, over-inventoried results of post-World War II methods – piles of unidentified scrap, expedites, uneven flows and excess inventories. In fact, many of the clients The Mill Girl worked with at that time struggled to raise their inventories turns – the key and very revealing indicator – above 1 or 2 per year. Everyone saw big opportunities, but few managers knew exactly how to fix to problems, and even fewer leaders stepped up to the type of dramatic change that the situation required. George Koenigsaecker and Art Byrne at Wiremold did.
Koenigsaecker moved from Deere to Rockwell and then took at job in Connecticut at Jake Break (Jacobs Vehicle Manufacturing
Company). That’s where we first started hearing about his exploits. All of us had struggled with Shigeo Shingo’s little green “Japlish” book; some of us had journeyed to Mecca, in this case Kawasaki to witness “real Japanese production methods” at work in the heartland. A few pioneers toured Japan’s factories and spoke with the leaders who had learned from American quality and industrial engineering leaders how to set up and run production a better way. At Jake Brake Koenigsaecker stepped into endless opportunities for shop floor improvements. Cellular flow and something that resembled early value stream mapping allowed workers to see better and to get cycle times – shipments had always been late – under control. Each time the company attacked one problem, two others would show their heads, and very quickly Koenigsaecker and his team found themselves building a total JIT system.
It’s interesting to note that during the time of this company’s transformation rumors of the inevitable clash of American worker’s mentalities with Japanese sensei habits reached the outside world. Harsh words and physicality wouldn’t work – and they weren’t legal methods in the US – and this big difference drove more discussions/articles and even books on “culture change” than ever expected when managers first considered the mechanics of the Japanese transplanted systems.
Koenigsaecker dedicates over 100 of the book’s final pages to his Appendix of advice and useful tools, from his Lean Tutorial to a great discussion of Standard Work. The Appendix also contains a section on a product design system that uses lean principles. As one would expect from a book that marks the transition from post-WWII production methods to Japanese and lean-led systems, Leading the Lean Enterprise Transformation does not cover information systems architecture or applications. Readers will have to look elsewhere for this next big step in manufacturing evolution.
And as for Art Byrne’s masterful book, with a foreword by Jim Womack, The Lean Turnaround, I love it. Let’s put Byrne’s courage and vision in perspective. Working in the
same transitional timeframe as Koenigsaecker, first at Danaher, then Wiremold, Byrne’s leadership approach still stands out for these three reasons: 1. Byrne is a rub-elbows-with- the-people sort of guy, someone who believes you have to get out from behind the desk, walk, learn the employees names, be a presence;
2. Byrne knew private equity, the money end, BEFORE and during all his work. Knowing the potential rewards gives every kaizen activity real meaning;
3. Byrne has the eye – he sees things differently, or better, despite the fact that at one point during his career he was, ironically, stricken with a vision problem.
If you look back at the Target article we produced on Wiremold (“How Wiremold Reinvented Itself with Kaizen, “ Target magazine, Assn. for Mfg Excellence Jan/Feb. 1995), and our Kaizen Blitz book, you’ll see some gritty black and white photos and great numbers. We recognized from the beginning that although kaizen, for most companies the starting point of their transformation, is exciting and has great movement, it’s the numbers that sell. Here are the numbers Byrne offers us:
The Wiremold Company 1991-2000
*Lead-time dropped from 4 – 6 weeks to 1 – 2 days
* Customer service went from 50% to 98%
* Productivity went up 162%
* Sales quadrupled
*EBITDA margin went from 6.2 percent to 20.8%
*Gross profit went from 38% to 51%
*Working capital/sales decreased from 21.8% to 6.7%
*Machine changeovers went from 3 per week to 20 – 30 per day
*Operating income went up 13.4 times
*Inventory turns went from 3 times to 18 times
*Enterprise value went up 2467 %
The numbers continued to roll in and as basic kaizen tools – single minute changeover, group activities, shop floor redesign etc – got better, it became impossible for traditional American manufacturing to ignore these very productive methods. Although something went awry when kaizen becoming a “quota’d activity,” it’s important to look back at the beginnings and remember where American manufacturing was coming from. This was the break that we all needed, and we’ve got to credit the pioneers with putting together a methodology that would work outside of Japan.
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