Steinway Managing Times, Q3 2008

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S h a r i n g S o l u t i o n s f o r Y o u r L e a n J o u r n e y

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Developing andleveraging yourhuman assets

Conn-Selmerlean productdevelopment

8Going Offshore?Look before youleap

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Steinway & Sons: Applying LeanSigma® to the Art of Piano-Making

We are living in a new world order—one in which crisis and turmoil are the “newnorm.” This new norm includes increasingenergy costs; the economic disruptionscaused by war; climate changes that causedebilitating droughts as well as floods, earthquakes, and hurricanes; and politicaldiscontent that stirs currency fluctuationsand disturbs energy supplies. As fuel costscontinue to rise, we are going to have to findways to do business differently. If we want tocontinue to survive in this kind of turmoil,what must we do?

Following Toyota’s example, we mustlearn to apply—or reapply—lean principlesto those things we can control in our ownorganizations. The first step is to go back tothe basics—revisit and rejuvenate your ownlean efforts and look for ways to apply leanprinciples in the short term to exert controlover the variables you can control.

Do you have an enterprise-wide mindset of eliminating waste in every part of your business? The “seven wastes” are still important and should be part of a dailymantra. If weeds have started to grow, theymust be removed.

What about your supply chain? We havefor a long time taken an adversarial approachwith suppliers. Creating live, synchronouspartnerships is critical.

We must learn to get closer to our customers—to uncover unarticulated needsand the compromises they’re making. Weneed to become “delighters” again and notjust supply our customers with “me too”products. Getting close to your customers isessential to rooting out wasteful products,services, and behavior.

Get close to your own people. There’s nobetter time to let them know you care, andif you do, they will invest in helping youchange the controllable elements of yourenterprise. Remember LeanSigma meansdoing more with fewer resources and repositioning people to help leverage thegains made through lean. Make sure youbroadcast the game strategy: lean is there tohelp eliminate waste so that the organizationis right in sync with the customer’s actualdemands. Then you leverage that to growand it’s a win–win situation for you, yourcustomers, and your employees.

Energy costs in some plants are evenhigher than people costs. Conducting energykaizens will not only help you save money,but it could save the plant and, ultimately,the planet. Consider your transportationcosts as well. Lean value chain teaches us tolook at total landed costs of products. Wehave to learn how to make our work local—coupled with the local economy and usinglocal ingredients and local supplies.

The last—and most critical—element is unwavering, focused, and committed leadership. The number one factor in mobilizing a work force to optimize a business in troubled times is passion. Leadby example and focus on a few criticalthings. Don’t try to change everything today.This is where a policy deployment process isessential. It gives you the discipline to deselect and focus on only those things that

PUBLISHER’SNOTE LeanSigma®: Back to the Basics in Times of Turmoil

are going to make a difference now.Talent multiplication is more important

than ever today. You need people who arealigned with your vision, who are not afraidto make a change or take risks, and who arenot going to back off at the first sign ofresistance.

Several articles in this issue reinforce thevalue of the lean basics, including the featureon Steinway & Sons (p. 2) and articles ontalent multiplication (p. 8), lean productdevelopment (p. 12), leader standard work(p. 16), and lean management accounting(p. 17).

Whether you are working on your culture, your finances, or your design procedures, or just attempting to be moreenvironmentally sound, lean is the processthat will get you there. If you’re already lean,the tools are there and have been there along time—it’s just a matter of having thefocus and discipline to derive a strategy that supercharges the lean effort as a bulwark against the stormy sea that is newworld order.

Anand Sharma, President & CEOTBM Consulting Group, [email protected]

A publication of TBM Consulting Group

800.438.5535, www.tbmcg.com

PublisherAnand Sharma: a s h a r m a @ t b m c g . c o m

Executive EditorWilliam A. Schwartz: [email protected]

Managing Editor Julie Poudrier: [email protected]

Featured Columnists Patrick Behrendt Mike KamphuisJean Cunningham Ken KoenemannSteve Hahn Gary RascoeBill Higgins Mike SerenaSteve Kula

Contributors Stacy Aponte-Morris Bob McElroyAshwin Badve Don PedersenShipra Chopra Gary RascoeMike Herr Angela ScennaRichard Holland Mike SerenaGary Hoover Melissa SlaterDonna Hopkins Noel TempleBeth Ann Hunt Helen ThompsonPhilippe Joly

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On the cover: Being great—even being the best—wasn’t good enough for Henry E. Steinway in the19th century and it isn’t good enough for the people at Steinway & Sons today. Innovation andan unyielding resistance to the status quo are whathave kept Steinway & Sons in the forefront ofpiano design, and, as always, the Steinway philosophy remains, “We can do better.”Therefore, it wasn’t surprising that Steinway &Sons would decide to implement LeanSigma®

concepts to explore ways to refine manufacturingprocesses. With its 155-year track record of continuous improvement, Steinway continueslooking for ways to create its world-class pianos ina more efficient and productive environment.

In the spirit of taking its lean transformation to the next level, Reviva hasreorganized its sales, marketing, engineering,and product development groups alongvalue streams. Melissa Sawin, formerly thedirector of continuous improvement is nowmanager of the newly formed RefrigerationGroup. … Tiffany Mullis-Brittain atVanguard Furniture has also taken on a newposition, moving from KPO toCoach/Supervisor in one of the company’supholstery cells. … Adrien Chabot has beenpromoted to Plant Manager at CanadianForest Products’ Clear Lake Division inPrince George, British Columbia. RossLennox is the new LeanSigma® Coordinatorfor Canadian Forest Products’ Clear LakeDivision. … Kevin Leiker has been promoted to the position of KPO managerat Graphics Systems in Witchita, KS.Graphics Systems is part of the IdentityGroup. … Carole Cocatrix, formerly theKPO at Bunge’s Mannheim, Germany,plant, is now production manager there.Andreas Vogt, formerly maintenance manager at the Mannheim plant, has beenpromoted to managing director. … Incompany news, Alexander Weigand, CEOof WIKA, likes to participate in kaizenevents for several reasons: first, he enjoysgetting away from the routine of officework; second, he is able to learn more aboutthe people and the products at the differentWIKA organizations; and third, he wants toimpress upon WIKA employees worldwidethe benefits and importance of lean manu-facturing. WIKA has acquired ProcessIndustries Ltd. in New Zealand. ProcessIndustries Ltd. has been operating in theNew Zealand market for more than 20 yearsand is being managed by WIKA Australia.… Gokaldas Exports, Ltd. in Bangalore,India, a leader in the garment industry with48 sites, has just begun another LeanCertification class. The fifteen participantsrepresent a wide range of departments and

LEANCOMMUNITYNEWSMANAGINGQ 3. 0 8

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include plant and production managers,engineers, and warehousing personnel. …Harsco Track Technologies has begun aLeanSigma® transformation at its WestColumbia, SC, site. The plant assembles railtrack reconditioning, renewal, tamping, andnew track construction equipment. … InTBM news, Mark Kohler has joined theBusiness Development Team as a globalclient manager focusing on helping clientswith policy deployment and introducingthem to the Catalyst Web-based PD Toolset.Kohler comes to TBM from Snap-On Tools,where he was vice president of operations.David Pate has also joined the U.S. BusinessDevelopment team as a global client manager. Pate joined TBM in early 2006 asa member of the process industry team.Ranjan Vasishtha has joined the TBM Indiaoffice as a senior management consultant.While working with Gokaldas in India,Mike Serena, Managing Director of theLeanSigma Institute, has been interviewedby the Times of India, Financial Chronicle,and The Financial Express. In the U.K.,Donna Hopkins has joined TBM’s globalmarketing team as marketing director-EMEA (Europe, Middle East, Asia). DianeGillatt has joined the U.K. team as officeadministrator. Helen Thompson, formerU.K. office administrator, has moved withher family to Perth, Western Australia.

CASESTUDY Steinway & Sons: Applying LeanSigma® to the Art of Piano-MakingBy Steve Hahn, TBM Director of U.S. Consulting

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Henry E. Steinway founded Steinway& Sons in 1853 with a single ideal: to createthe world’s finest pianos. And in less than adecade after Steinway opened his New YorkCity factory, Steinway pianos were the talkof the piano industry and well on their wayto dominating the music world.

Then, during the next century and ahalf, handcrafted Steinway pianos becamethe benchmark by which all other pianoswere measured. For quality. For unsur-passed sound and power. For innovation.

In fact, innovation and an unyieldingresistance to the status quo are what havekept Steinway & Sons in the forefront ofpiano design. While scores of piano makershave ceased production, generations ofSteinway descendants, designers, craftspeople,and dreamers have been granted an

unmatched 115 patents to improve andrefine what has come to be known internationally as The Steinway Sound.

But being great—even being the best—wasn’t good enough for Henry E. Steinwayin the 19th century and it isn’t good enoughfor the people at Steinway & Sons today.

Steinway’s elegantly complex instru-ments are created from 12,000 compo-nents—some massive, others delicate—thatblend craft and technology into the pianoplayed by 98 percent of all concert pianistsperforming with major symphony orchestrasin the United States.

Yet, as always, the Steinway philosophyremains, “We can do better.”

Therefore, it wasn’t surprising thatSteinway & Sons would decide to imple-ment LeanSigma® concepts to explore waysto refine manufacturing processes. With its155-year track record of continuousimprovement, Steinway was looking forways to create its world-class pianos in amore efficient and productive environment.

Keep in mind, however, that Steinwayofficials certainly weren’t exploring ways tocut corners on what most music experts con-sider the world’s finest pianos. But given thecompany history of innovation, finding bet-ter ways of doing things was inbred in thecorporate psyche and should be explored.

Consequently, Steinway & Sonsembarked on its lean journey in March2004. And while it was uncharted territoryfor the vaunted piano maker, LeanSigmaalready had produced noticeable operationalimprovements at Steinway’s sister company,Conn-Selmer, the nation’s leading manufac-turer of orchestral and band instruments.

Companies considering the lean philos-ophy often explain that because their prod-ucts or corporate cultures are unique, leanprinciples would be difficult to implement.Steinway was no different.

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Steinway grand pianos are created fromhandcrafted components, and each pianotakes up to a year to build—as anachronisticin today’s high-tech world as the company’s440,000-square-foot Civil War-era manufac-turing facility in Long Island City. Locatedminutes from New York’s LaGuardiaAirport, the Steinway factory is in one of theworld’s most expensive business centers, andemploys a culturally diverse workforce ofabout 500 people speaking as many as 35languages. Moreover, Steinway is the onlyunionized piano factory in the U.S.

“We had all the classic stumbling blocksand then some,” explains Andy Ho r b a c h e v s k y,vice president of manufacturing at Steinway& Sons. “Culture, language, a shrinkingindustry, a craft environment that empha-sized individual contributions, and an old-line union. And yet, we’ve been able toweave lean concepts throughout the organi-zation and be successful with it.”

That success is measured in double-digitimprovement in scrap and re-work, a reduc-tion in floor space, increased productivity,“and no one lost their job,” Horbachevskypoints out with pride.

Ever mindful that Steinway’s core valueis quality, the lean journey also helped iden-tify what Horbachevsky calls “accumulatingnickel-and-dime issues,” everything fromminor dings on piano cases during shippingto maintenance and factory organization.

“The whole lean journey is extremelyhumbling,” admits Horbachevsky, who hasbeen the driving force behind Steinway’sContinuous Improvement (CI) Program.Despite his 20 years of experience at

Steinway, Horbachevsky says each CI eventwas an eye-opener. “You think you know itall, but it’s not until you get out there on theshop floor that all of a sudden it hits you:‘Why do we do it this way?’”

People who talk about lean often usethe word transformation, but it’s importantto note that Steinway had no intention oftransforming its manufacturing process, atleast not with respect to the “fundamentalrecipe” for making a Steinway piano aSteinway.

But, after 80 CI events, Horbachevskysays, “We constantly realize unanticipatedgains with each event we hold.” Productivityhas improved dramatically, as well as cleanlinessand organization. “But, the really big thingis culture change.”

Lean concepts taught everyone to exam-ine the entire piano-building process—notjust their department or job. Where peopleand departments used to work in isolation,now there is connectivity and visibilitythroughout the whole manufacturingprocess. Where pride of craftsmanship oncewas reserved for individuals, lean conceptshave spread that pride across the entireorganization.

Steinway’s employee roster is a microcosm of immigrant waves that havelanded on U.S. shores during the past century. “Pick a period in U.S. history andon a rotating basis, whatever wave of immi-grants entered the country at that time,that’s who we have working here,” says MikeAnesta, Steinway’s director of personnel.


CASESTUDY

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However, even this cultural diversity hasnot been an obstacle because implementinglean principles doesn’t require a commonlanguage or similar job titles. In fact, thevery foundation of CI team events is dissim-i l a r i t y, bringing together people with differe n tbackgrounds from various departments anddifferent job titles, and company presidentsworking side-by-side with craftspeople andbilling clerks and janitors and marketing staff.

The primary focus is to break downbarriers between departments so that whenmembers of upper management are on a factory tour with guests, they not only knowworkers’ names, but they know what theirjobs entail. It’s an instant morale booster.

At Steinway & Sons, many CI eventsinvolved spirited discussion, Horbachevskyadmits. “Some people who are the mostpassionate don’t let language get in the way.There was vigorous debate; people caredabout their point of view.”

At one such meeting, Mike Mohr,director of assembly, coined the slogan "It’sall about the piano,” which has become thebattle cry for every decision made on thelean journey.

“Mike’s motto was liberating,”Horbachevsky says. “At the end of the day,every decision was based on the quality ofthe piano—not the cost or the operator orany other reason.” It also looks good oncompany T-shirts.

At Steinway & Sons, piano-making is asmuch about art and craftsmanship as it isabout production. As such, employee reten-tion is extremely important and the fact thatSteinway boasts scores of craftspeople thathave been with the company for 20 years orm o re is a great source of pride for the company.


“We respect our workforce,” saysHorbachevsky, who adds that Steinwaysought and received full cooperation fromthe factory’s labor union before undertakingthe lean journey. And it certainly didn’thurt that Steinway assured union officialsthat no jobs would be lost as a result of leanactivities. The fact is, Steinway even addedpositions. A few workers have been reas-signed, but neither seniority has been lostnor pay reduced.

Achieving and sustaining the success ofSteinway’s lean transformation is the resultof management’s flexible implementation oflean concepts. For instance, shortly afterlaunching its CI initiative, Steinway management realized that elements of thelean philosophy could control productionabnormalities that directly affect quality.However, not all lean tenets applied to pianomanufacturing.

“The fact that Steinway pianos require ayear to complete may seem in conflict withlean concepts,” Horbachevsky points out.“But we won’t reduce the length of time ittakes for wood to cure because it wouldreduce quality. In the case of piano construction, that is considered value-addedtime.”

That is not to say, however, thatSteinway didn’t want to improve pro d u c t i v i t y ;it simply means that time spent on the artand craft of piano-making was not, in fact,waste.

However, implementing the concept of kitting—pulling together individual partsinto a set that is assembled at the sametime—was an excellent solution for work-flow problems, increasing productivity,lowering inventory, as well as reducing thedistance that those parts must travel in thefactory.

As the program continues to gainmomentum, lean concepts have becomedaily priorities producing tangible results inall manufacturing and administrative areas,and especially where housekeeping andorganization are concerned.

Steinway’s factory tour has been rankedamong the nation’s “Best Indoor Si g h t s e e i n g”by Reader’s Digest magazine in its annual listof America’s 100 Best people, places, ideas,and programs. “No one is more impressedby the organization and cleanliness than visitors taking factory tours,” Horbachevskyobserves. “This shows everyone who comeshere that pride and attention to detail areevident in everything we do at Steinway &Sons.”

But more than simply improving thefactory’s public image, lean concepts thatreduce and reorganize Steinway’s productionarea into cells has freed up floor space,which, while not a specific goal of any CIevent, was the natural consequence ofimproved process and work flow.

It also represents a significant source ofsavings. More usable floor space meanspianos don’t bump into each other, so thereis less re-work. The company also has consolidated the number of floors used,reducing energy costs and overhead.

For employees, greater floor-space efficiency has provided a new cafeteria and abreak room with foosball and ping-pongtables, vending and ice cream machines.

Horbachevsky vows the company willbe “relentless” in its pursuit of further leanimprovements. Thus far, Steinway has completed 80 events—36,000 hours—andprojects that sometime next year, it will havecompleted the 100 week-long events neededto make its first complete pass through theplant. But it won’t end there. Steinwayintends to revisit events to make furtherimprovements.

“We’re not just event-driven,”Horbachevsky notes. “Lean has become partof the lexicon of how we do things here, andit’s also how we deal with our vendors andcustomers.”

Satisfying customers always has been thesole focus of Steinway & Sons, but the leanprocess has helped Steinway employeesexpand their definition of customer beyondthose who purchase these fabulous instruments. They have learned that theirco-workers are internal customers who shouldbe cared for as well.

For instance, as piano components aremade, they are shipped elsewhere in the factory. Now everyone asks, “Do these partsmeet every need of my internal customers?”

For Steinway, lean is not about costreduction, unless it reduces the cost of doingbusiness. “Clearly we need to use less power,reduce overhead, and optimize our materialsto remain competitive,” says Anesta. “Butthe one thing we’ll never do is cheapen apiano.”

When it comes to producing qualitypianos, cost isn’t a consideration. “If wethink something adds value to the piano, wewill add cost back in,” Horbachevsky says.“The overarching goal is to improve ourproduct so if, for example, we must choosebetween A and B, we will always choose theanswer that’s best for the piano.”

Henry E. Steinway had three basic prin-ciples for his fledgling piano company thatcontinue to direct every decision of today’smanagement team: Build to a standard, nota price. Make no compromise in quality.Strive always to improve the instrument.

It’s interesting how Steinway & Sonsalways has found a way to dovetail suchtime-tested philosophies with it current standards of performance. In this case, ahallmark of Steinway’s lean transformation iswhat is known as standard work, which has

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taken the best practices of each Steinwaycraftsman and consolidated them into aseries of volumes known as “the bible.” Inthis way, the company has secured theknowledge of its most skilled craftsmen toensure that consistent high quality is standard on every instrument.

Steinway & Sons has a proud history ofcontinuous improvement, never hesitatingto introduce technical innovations or to trydifferent methods for the good of the product. In the past few years, lean hasbecome a force at this venerable company, alogical extension of a company culture thatprizes hard work, creativity and change forthe better.

“As the head of manufacturing, youthink you’ve got it all figured out,”Horbachevsky says. “If your ego preventsyou from embracing the lean approach, youwill miss a tremendous opportunity. Getpast it. Give more power to people on thefront line and you’ll make improvements.You do continuous improvement; you don’ttalk about continuous improvement.

“Probably the most valuable tool thatthe TBM team brought to the table atSteinway was providing us with a fresh set ofeyes to identify a problem, and then givingus tools to develop a solution. During theprocess of implementing lean concepts, thepeople from TBM act as guides who providepaths to improvement.

“But what has made the journey invalu-able here,” he adds, “is that all St e i n w a ye m p l oyees explored the possibilities together,generating a company-wide investment inbetter processes and systems. That’s aninvestment any company should be morethan happy to make.”

Vermeer Corporation CEO MaryAndringa was presented with the sixth annual Perfect Engine Award at TBM’sannual Executive Exchange Conference inNaples, Florida. The award was in re c o g n i t i o nof Vermeer’s commitment to a continuousimprovement philosophy and its success as alean enterprise. Based in Pella, Iowa,Vermeer is a global manufacturing leader inconstruction and agricultural equipment.

The “Perfect Engine” refers to the precision interworking of human resourcesand physical assets to achieve outstandingproductivity results that create business agility, growth, and profitability.

This annual award honors a manufactur-er that has been successful in implementingLeanSigma® methodologies, the fusion of the two most powerful business systemsfrom Toyota (lean) and GE (Six Sigma),throughout the entire organization, includ-ing its value chain.

Approaching the 10th anniversary of itslean journey, Vermeer continues to use theLeanSigma approach to extensively innovate,develop, and launch new products and hasleveraged its competitive advantages into

growth in sales and productivity. From 1998to 2007 the company has executed hundredsof kaizen events worldwide with the following results:

• Productivity improved 26 percent• Total inventory decreased 12 percent• Total of potential savings of more than

$29.7 million• 70 percent of the total employees have

participated on a kaizen team• 98 percent of their corporate

management staff has participated on a kaizen team

“Vermeer won this year’s Perfect EngineAward because of its proven ability to imple-ment and leverage cutting-edge processesthat facilitate continuous innovation andsynchronization throughout its value chain,”said Anand Sharma, president and CEO ofTBM Consulting Group. “Vermeer hasdemonstrated significant success gainingmarket share and building brand loyaltythrough its LeanSigma transformation andcommitment to investing in the workforce.”

Vermeer employs more than 2,100 peo-ple in seven production facilities and officestotaling 1.5 million square feet, in additionto the Global Pavilion training center andmuseum. Founded in 1948, the company iscelebrating its 60th anniversary, manufactur-ing a various lines of industrial and agricultural products under the vision of“Taking Care of Customers Worldwide withBetter Solutions.”


LEANCHAMPIONSVermeer Corporation Wins 2008 Perfect Engine Aw a rd

8 Managing Times | Q3.08www.tbmcg.com/news/newsletter.php

L E A D E R S H I P &C U LT U R E Talent Multiplication: Developing and Leveraging Your Human AssetsBy Bill Higgins, President and CEO, CIRCOR In t e rn a t i o n a l

CIRCOR is a global diversified manu-facturer of valves, regulators, and controls.Ours is a very distributed model, with aseries of business units that I would describeas specialty companies, all collected underthe umbrella of one company as a result of37 acquisitions over a period of time. As aresult of the diversity of our acquisitions, wehave found it easier to group the companiesloosely into four business units. Two of theseare industry-specific. One is devoted to theenergy industry—upstream and downstreamoil and gas production, which re q u i res larger,customized valves. The second business unitserves the aerospace industry, which by itsnature creates a great deal of complexity,while also being low volume and heavily reg-ulated. The third group is involved withvalves, fittings, and controls for processindustries that work with liquids, includingliquid regulation in harsh environments.The fourth group is the thermal fluids

group. Sometimes we refer to it as the steambusiness because we provide valves and controllers for the high-pressure criticalsteam loop systems underneath cities likeNew York, Boston, and Minneapolis. Part ofthat group also services the U.S. Navy, aswell as the British Navy.

CIRCOR went public in 1999, and Ijoined the company as vice president ofoperations and COO at the end of 2004with the intention of implementing lean,operational improvements, and operationalexcellence. I became president and CEO inMa rch 2008. When I first joined the company,CIRCOR had no history of LeanSigma®, SixSigma, or operational excellence. We were aclean slate, so to speak. Because we arepublicly traded on the New York StockExchange, we have great pressure at the endof every quarter to deliver the numbers, andwe have to integrate that with a lean culture.We needed to build a sustainable foundationupon which we could grow.

As with many other companies that starton a lean transformation, we began workingon achieving operational excellence on theshop floor and in the front offices by ru n n i n gkaizen events. Now we’ve looped back todevelop our culture and the talent requiredto run the company in an environment ofcontinuous improvement.

We launched in 2005 and throughoutthat first year we did a tremendous amountof assessment of what I call “people andprocess.” We were constantly looking at thepeople, and leadership in particular: Couldthey run a lean operation? Could they leadpeople to the next level? If a particular leaderat the vice president or general manager levelwas not an operations expert, I also asked,“Are they a learning leader? Can they surround themselves with great operatingpeople and learn and improve?”

Bill Higgins


We understood that kaizen was theorganized approach that would engageemployees and implement their ideas. WhatI really like about the kaizen approach is thatit includes people and really gives them anopportunity to come to the surface and bepart of the change. Some of the people takethat opportunity and run with it, whichhelps you uncover your leadership talent inthe organization. The people who can helplead change and are enthusiastic andengaged become evident.

Unfortunately, we really didn’t have leanleadership because people had little or noexperience with lean, particularly in middleand upper management. However, we hadg reat engagement with the employees. Myrole with leadership that first year was toreally ferret out who was a “go” and whowasn’t. It wasn’t always obvious.

One important step we took was todecide to get someone to help us with talent.We hired a corporate vice president ofhuman resources to work on talent acquisition, development, and retention.Our goal was to fill out the ranks with thepeople we wanted to lead CIRCOR for thefuture. We developed what we now call the“A Player” definition. It’s a one-page, veryfinely detailed description of what an Aplayer is in operational excellence, includingpersonal attributes and behaviors. We usedthat as a checklist when we interv i ewed peopleto see if they would fit into the culture wewere trying to build and reinforce. We usedthe definition to help us find people whohad changed product lines or changed

plants—primarily at the vice president, general manager, and operations leadershiplevels. We have since further refined andimproved the definition of an A player.

As we recruited some top-notch talent—we had three or four really skilled operationalleaders that came out of world-class companiesand brought a lot of skills to us—we lookedacross the landscape of all the business unitsand saw that we needed some sort of steering committee at the corporate level toprioritize what we were doing. So wedeveloped an Operational ExcellenceLeadership Team, which includes expertswithin our businesses who could step backand rethink how we were implementing leana c ross CIRCOR. Randy Willis, vice pre s i d e n t ,Continuous Improvement, leads that team.

Our goal was to leverage our lean talent.We had a group of lean leaders that wasmostly new to CIRCOR and we needed aplan to use that leverage to develop peopleacross the company and standardize ourapproach to doing so. The team developed acharter that takes CIRCOR to the next levelof a lean transformation—continuousimprovement innovation. The charterincludes a series of responsibilities and val-ues, and a lot of it has to do with people. Itaddresses reinforcing the right behaviors andthe metrics we must measure to drive thosedesired behaviors.

This team is responsible for developingand recruiting talent across the company.People used to say to me, “We need to getmore help to do this.” But we don’t needmore people—we just need everyone to beengaged. Sharing best practices across thecompany is a way to start that. It’s aboutincluding people, but with that inclusioncomes responsibility and accountability. Wenow tell people when we hire them that weexpect them to be on kaizen teams and be apart of the improvement process.

The longer term goal here is for thisdevelopment of a lean culture as part of ourbusiness system. Our top priorities continueto be around people, the process, stabilizingoperations, and extending kaizen from thefactory into the front office. We’ve foundthat employees generally are very enthusias-tic, but middle management’s world hasbeen totally turned upside down, and so weneed to spend a lot of time developing first-line supervisors, functional leaders, and mid-dle management. Upper management waspretty easy to assess—they were either on

board or not. At the higher levels, we did alot of recruiting, looking for talent thatcould lead our organization forward. Inmany cases, we were trying to fill positionswe’d created as we freed up people, space,and resources through kaizen. We createdpositions in areas like quality and continu-ous improvement. We now have a KaizenPromotion Office at every site, with at leastone person in each office.


We drive change by making sure thatleadership is involved with the lean effortevery day. The important thing is that theleadership team is learning. ––––––––––––––––––––––––––––––––––

“If you want one hundred years of

prosperity, grow people.” ~Chinese proverb

––––––––––––––––––––––––––––––––––Having reviewed our progress over the

past several years, one of the basic questionswe asked was if we had the know-how andtalent in place to take our lean transforma-tion to the next level. We decided our nextstep was to develop model lines at specifichigh-performing locations where we also hadstrong lean talent in place. We will trainpeople and processes around the modellines. It’s where we’ll learn how to developstandard work for everyone, and especiallyfor the managers. The model lines will beplaces where we can take other people in thebusiness to see how the process works.

So how are we doing? Well it feels likechaos some days. But if you asked our customers that question, many of themwould say we’re doing much better than wedid before. We’ve made huge strides in thetypical measures of lean transformation. Topline growth has been strong. We grew by$70 million last year, all of it organic. Ourbusinesses are performing better. And ourstock price has more than doubled since initiating our lean journey.

As we go forward, we’re starting to seeone important cultural change, and that’sthe development of the next generation ofleaders. The people who were our firstkaizen promotion officers and continuousimprovement leaders are now going to othersites to help out and are mentoring newleaders. Getting to the point where we candevelop our own internal talent is an excit-ing place to be. It’s been a subtle shift fromrecruiting talent from outside to developinga world-class workforce inside, but it’s inline with our five-to-ten-year goal, which isto move forward by developing talent fromwithin.

One advantage of our early heavy recruiting is that we gained a reputation as acompany whose management “gets it”[operational excellence]. And that of courseattracts even more talent. Talented peopleare key for sustaining and building the culture for the long-term approach. There’s aChinese proverb that states, “If you wantone year of prosperity, grow seeds. If youwant ten years of prosperity, grow trees. Ifyou want one hundred years of prosperity,grow people.” Growing people is a huge partof what we’re doing and the means by whichwe will ensure continued success.

To help us obtain talent, we brought on arecruiter from Wind River Associates, andincluded him in our executive meetings totalk about lean and operational excellence.He helped us create version two of our “APlayer” definition. We also brought in anoutside expert on talent development. Thisexpert was well-versed in interpersonal skills,team development, and organizationaldesign. Basically we we re positioning ourselve sto insure that we could get the best talent,but also the best fit for the organization,with people who could work well together asteams to change and maintain the culture.We brought these experts into the huddle atthe executive leadership level to help developthe go-forward plan. Now they’re an exten-sion of us and by combining their expertisewith our A player definition we’ve been ableto create a “people brand.” This is a brandidentity we want to have in the market sowe can continue to attract the kind of talentwe need going forward.

The change has been tremendous. Everyone of our recruits has been passed througha very rigorous filter on operational excellence, continuous improvement, andlean; they were assessed to be sure they hadthe right behaviors and people skills to gowith their lean expertise. That’s nowcascaded down through the organization tothe next level. If you put a real strong leaderin place, that person can attract great peo-ple, who begin working the same phenome-non at the next levels. Overall, we recruitedaround 150 people while at the same timeworking on developing talent from insideour ranks as well.

Over the past several months, I have hadseveral requests from my clients to recommend afew “quick reads” for general employee leanawareness that highlight not only the importanceof fostering quality in the workplace but alsoestablishing everyone’s role in attaining it. Manyhave read the classic All I Need to Know aboutManufacturing I Learned in Joe’s Garage by Schenkand Miller. It is a ground-level discussion of leanprinciples and concepts told in story format thatholds the readers’ attention and provides someexcellent examples.

Recently, the same authors have published asequel to their initial effort, All that Matters aboutQuality, I Learned in Joe’s Garage. It has receivedmixed reviews with comments ranging from, “thissequel focuses more on story and not enough oncontent” to “very informative and easy to read.”Of course, perceived value is in the eye of thereader and how information is applied; however, Ifound the book to be as the authors intended,that is, a basic introduction to a topic that allowsthe reader to first understand the importance ofmaterial presented and then how it may beapplied at their particular site. I have had severale-mails from folks who have read this book andrecommended that I pass it on to all readers ofthis column.

A significant number of texts discussing theimportance of quality and customer service inexpediting both lean and cultural transformationare now surfacing. Subir Chowdhury is oneauthor who has established himself as a “leadingquality expert” according to the New York Times.He has written 12 books to date and many willrecall him by two of his most successful, ThePower of Six Sigma and Design for Six Sigma. Donot be misled that Chowdhury is all about sigmain the workplace. He does an excellent job ofillustrating not only quality in the workplace butalso how it is directly aligned with the applicationof lean principles and concepts. His latest book,The Ice Cream Maker (Doubleday Business, 2005)is a superb introduction to the importance ofestablishing quality and customer service in theminds of the workforce as an uncompromisingfoundation to realizing operational excellence andcompetitiveness in the global marketplace.

As in the books by Schenk and Miller,Chowdhury tells a delightful story of an icecream company that is quite innovative, and yetthe company is having difficulty competingindustrywide in both growth and profitability.Peter Delvecchio, the Dairy Cream plant manag-er, is agonizing over why his sales folks are unableto get the local grocery store (Natural Foods) tostock his ice cream and decides to make a visit tobetter understand the issues. What follows issome very good insight into the need for the“voice of the customer” as well as how theemployees of Natural Foods have embraced theimportance of customer service and quality in thework they perform every day. The book has manyexamples as to how the “hearts and minds” ofemployees must be won over in order to ensurerapid change and “perceived value” for all. Thebook makes the point about how peer pressurecan be a far more effective method for governingdesired behavior than trying to manage from thetop down.

Readers who are both customer- and service-oriented will benefit from reading thistext. Chowdhury states that, “if you sell something, you have customers … and if youhave customers, you’re in service.” Of course, itgoes without saying that if you plan to stay inbusiness, your most important job should be to“take care” of those customers in ways that willdifferentiate you from your competitors. There isa great deal of discussion about how organizationsmust strive to differentiate themselves as well astheir products and services. Most specifically,many examples are presented in terms of listeningto both internal and external customers,consistently performing to established targets,

idea innovation, and exceeding expectations.The last section of the book discusses how

an organization can optimize its efforts in somesuccinct steps that can be understood by all, nomatter what level or job an employee may currently work.

There is much to learn in this easy-to-readshort story of a mere 112 pages. Be prepared tomake notes, highlight, and “dog ear” more than afew pages, because it will force you to thinkabout how your company and your specificefforts can significantly optimize customer service, quality, and employee satisfaction.


Note: All books that Mike Serena reviews have been recommended byclients and the readers of Managing Times. Please send your recommendations for review to Mike at [email protected].

BOOKSTOREADMaking Quality the Key Ingredient in Everything You Do By Mike Se rena, Ed.D., Managing Dire c t o r, TBM LeanSi g m a® In s t i t u t e

Mike Serena

My marketing career began back in2001 as a telemarketing manager in themanufacturing side of the band instrumentindustry. Since that time, I’ve held multiplepositions in the area of product managementand currently am a director of marketing forBackground Brass instruments at Conn-Selmer, Inc.

Owned by Steinway Musical In s t ru m e n t s ,Inc., Conn-Selmer is the nation’s largestdomestic manufacturer of brass, woodwind,and percussion musical instruments and isbest known for its collection of famousbrand-name products that include the finestband instruments in the world. Bach, Se l m e r,King, Holton, and C. G. Conn instruments,along with their percussion brand LudwigDrums, have been played by musicians likeRingo St a r r, Louis Armstrong, Dizzy Gi l l e s p i e ,Benny Go o d m a n , and Maynard Ferguson.

Conn-Selmer began its journey intoLeanSigma® in April of 2003 and has successfully improved its manufacturingprocess and product development throughthe use of lean processes. We’ve done morethan 100 week-long or point events up tothis point. A true telling point of ourprogress is shown when we give numeroustours in our Elkhart and Eastlake factories.Guests who toured our facilities before 2003see a remarkable difference. Comments are

made about the visual benchmarks, thehour-by-hour charts, and the overall organization of the cells and how focusedeveryone looks.

Although we’ve had success with the initial steps of our lean journey, at somepoint you realize that there’s more toLeanSigma than just improving processes onthe shop floor or in the back offices. In July2006 I was first exposed to something thatwas very foreign to me at that time: Designfor LeanSigma (DLS). Just the year before Ihad gone through my first product develop-ment cycle as a product manager, and fromconcept to launch, it took one year withoutusing the DLS model. This was on a newmarching tuba. We realized that we neededto be able to get new products to marketmore quickly and reliably, and with two newprojects on the table, decided to seek outsidehelp. Ashwin Badve from TBM came toConn-Selmer to train our marketing depart-ment on the fundamental aspects of DLSand what its capabilities are. The process wasthen put to use on the Bach 182 trumpetand Bach LT142BO trombone.

After going through the training sessionand studying the process and how it relatedto Six Sigma, I immediately recognized thatDLS is something that needed to become ap a rt of who I am as a marketing professional.

CASESTUDY Lean Product Development Helps You Play a Diff e rent Tu n eBy Michael Kamphuis, Director of Marketing, Background Brass, Conn-Selmer, Inc.


Michael Kamphuis


No doubt all marketing people come to realize at some point during their careersthat it’s a major challenge to achieve successin the three fundamental aspects of business:price, quality, and availability.

DLS addresses all three issues by using alean process to take a concept to market inthe shortest time possible, at the expectedquality, for the lowest cost, and at therequired volume level. Sounds too good tobe true doesn’t it? Well believe it!

How did this help me? Well, with thephase-gate process that DLS follows, ithelped me regiment myself to not jumpahead of where I am at in the process untilall aspects have been dialed in. The phasesare as follows:

Phase 0—Market feasibility/business casePhase 1—Concept feasibility, voice of

the customer (VOC)Phase 2—Product designPhase 3—Production preparationPhase 4—Launch Phase 5—Post-launch review

Phase 0—Market FeasibilityIn this phase, we create a business plan

that shows why an idea or concept we havedeveloped should be looked at further. Inthe business case we show target costs, financials, market trend data, and potentialmarket share to determine the initial returnon investment.

Also in this phase, we propose a cross-functional project team to take the conceptto fruition. We include team members fromall areas within the company: finance, procurement, manufacturing engineering,sales/customer service, and quality.

Phase 1—Concept FeasibilityAfter a Phase 0 approval, we hold a DLS

Kickoff Team Meeting. This meeting iswhere we pull together the newly formedteam and explain the business plan and alsobegin forming a VOC strategy.

VOC by far is the one piece that I’vefound can truly make or break a project.The more time spent gathering and under-standing VOC, the better. To capture VOC,the team must identify the following:

• Who is our target market?• W h e re is our opportunity for the most

g row t h ?• Who are the individuals we need to talk

to gain the most knowledge?

Once these answers are established, wecreate a VOC questionnaire consisting of9–12 questions related to the informationthat we need to properly design a product.This is in preparation for interviewing endusers. The questions asked are open-ended,and we’ve found that any number greaterthan 12 questions tends to lead to more thanan hour of conversation and is not conducive to good feedback.

The questions tend to revolve around the product. For example, on one project fora professional trombone, some of the questions asked included the following:

• What cosmetic characteristics of the instrument are important to you? What changes would you make to the appearance if any?

• What functional characteristics of the instrument are important to you? What changes would you make if any?

After the questionnaire is put together,we create an interview matrix and target 50people. The interview matrix consists of allthe different channels that impact the sale ofour products and includes teachers, students,dealers, professional players, and others.

Once the questions are established andthe interv i ew matrix is created, the team putsnames to the matrix and interviews areassigned to each team member. The inter-views are done both in person and over thephone. We try to record every conversationto obtain accuracy that is not possible when information has been filtered through aninterviewer.

When we have gathered all the informa-tion, we hold a week-long event duringwhich we put the data we’ve gathered into a“House of Quality.” The main tool that thehouse brought our team is the understandingof what the customer’s needs are and how weaccomplish this. One of the key pieces thatour market depends on is the sound of our

instruments. The descriptive sound tenden-cies that came through our interviews helpedus determine which direction to go. In thiscase, the customers described to us that theBach sound was the most desirable in theirminds.

Once all the data has been compiled, wethen create a concept and present it to theofficers for approval. Also, as in every phasegate, we make sure that the financials matchthe business plan.

Phase 2 – Product DesignAt the end of this phase, we’ll have nar-

rowed our design down to a preliminary billof material, have more solid financial infor-mation, and know the scope of the toolingneeded for us to be prepared for setting upproduction. “Requests for Expenditures” willbe submitted for approval.

Phase 3 – Production PreparationIn this phase, we hold “Design Failure

Mode Effects Analysis” (DFMEA) events,and advanced quality planning events tohelp set up the production cells.

The DFMEA event is a time when we gothrough the entire process and determinewhat parts of the manufacturing process arekeeping us from an adequate end result. Anexample of this pertaining to musical instru-ments would be some of the mechanics ofthe trumpet. With trumpets for example, thethree pistons that are used to play the instru-ment must have fast action, yet maintaingood compression. Based on the VOC, if wedo not meet this demand, the customer will

CASESTUDY



not be satisfied. If our end result during ourtesting at the event shows great action, butpoor compression, we call that out and identify the parts within the piston-fitprocess that would solve this problem.

Also, at this point, I’ve finalized the marketing strategy and the message that will be used to support this product in the market place. I highly recommend gettingthis done prior to Phase 4 so that you arewell prepared to train your sales force andalso allow for lead times on Web, print,trade show planning, and other projects tobe completed before launch.

Phase 4 – LaunchAt launch the production line is set up

and we have completed a pre-productionrun in order to have inventory on the shelfprior to launch.

Phase 5 – Post-Launch ReviewPost-launch review is the time to go over

lessons learned and to immediately fix anyissues that have become apparent with theproject. We also review any items that havecome up that may also apply to other projects in process in order to avoid thesame shortcomings with those projects.

A Different TuneNow, getting back to the first project that

I was involved with, the marching tuba—wecould have avoided many issues had we usedDLS. Although the marching tuba went tomarket, it was five months later than expected. The reason this occurred wasbecause of “feature creep,” dreaded wordsthat will cause any product manger to

cringe. Although we had identified what thecore design needed to be and what theexpectations of the customer were, we failedto do DFMEAs and the validation involvedup front to determine if some of our ideaswere indeed 100 percent valid. So when wewere in the prototype phase, certain parts ofthe design failed and we had to go back andmake many alterations before launching thetuba. This also then impacted the manufac-turing cost and final result prior to launch.Luckily, we were able to pull it together andhad a successful launch after all; however,the stress, headaches, conflict, and worriesthroughout the team during that periodcould largely have been avoided had wecompleted the proper steps up front.

With the two Bach instruments, welaunched on time and at a cost within 5 percent of our goal and delivered successfullyto the marketplace. The overall process andfeel of designing and launching those twoinstruments was quite different from that ofthe marching tuba.

After walking through the DLS processwith three projects, I’ve found that DLS hasbecome a part of who I am as a marketingprofessional. As a department, we have takena lot of the tools from DLS and used themfor business process type kaizen events, andeven for creating a sales catalog for acces-sories based on the VOC.

I’ve had the opportunity to train in DLSpeople who have joined our company overthe past few years and also train those whowe re not yet versed in the practice. It becomesalmost infectious as more people understandthe process within our organization.

Over the coming year, I expect to see fivenew DLS projects on my plate and I’m anx-ious to get these started. Together, the inno-vation that comes out of the process and theinvolvement from the marketplace creates anew feel for our customers about who we areas a company. For companies that want todeliver new products to their respectivemarkets on time, with the right quality leveland at the right price, there is no better toolthan DLS.

with lean. Organizations often rely on leaderpersonalities and persistence to drive changewhen they should concentrate on leader systems or structure that drive behavior.Structure, including rewards, and culturedefine how people behave in an organization.Changing organizational structures to support continuous improvement will provide the leverage for change. The toolsare the easy part. The difficult part is building a disciplined management systemthat defines standard work, rewards correctbehavior, audits results, and holds peopleaccountable.

Standard work on the shop floor is essential for sustaining and increasing gainsmade through kaizen events. Why, then,don’t we create leader standard work?

Leader standard work defines the rightbehaviors throughout the organization andensures consistency among leaders. Five keyingredients are required for effective leaderstandard work: overlap, visual controls,reward systems, audits, and accountability/discipline. When some of the ingredients aremissing, the system starts to break down.You cannot pick and choose; the synergycomes from combining all of them.

First, all standard work must have overlapfrom lower management to upper manage-ment. If a line leader should be filling out aSQDC board hourly, the supervisor shouldbe monitoring that several times a day, andthe plant manager should be checking daily,and each of those requirements should bespelled out in the individual’s standard work.

Second, just like visual controls that weuse in 5S, standard work for leaders mustalso be visual so that we can tell at a glanceif it is being performed as designed. If it isnot visual, it probably won’t happen.

Creating standard work for leaders prevents backsliding, takes leaders out off i refighting mode, and provides accountability.One way to make leader standard work bothvisible and easily audited is to use “taskcards.” One of my colleagues, John Alford,used them at a Ford plant. Each card con-

tains actionable behavior—what the leadershould be doing. The cards are held in a rackfor easy access and review. Each card has ared dot (to do) on one side and a green dot(completed) on the other. At the beginningof the day, all cards show red dots. Duringthe course of the day, the manager turns thecard over to show the green mark as tasks arecompleted.–––––––––––––––––––––––––––––––––––

“How to sustain results is one of the most

important questions companies face today.”

–––––––––––––––––––––––––––––––––––A supervisor can see at a glance what

percentage of the tasks have been completedat any given time. If one leader routinelycompletes just 50 percent of the tasks andeveryone else completes 80 percent, thenthat’s a signal that something needs to beaddressed. It allows for intervention beforeproblems get out of hand.

To put leader standard work in place, theorganization’s systems have to be consistentwith standard work. The system needs toreward desired behaviors—root cause analysis and problem prevention vs. firefighting. Senior management must designthe reward systems and culture that willdrive desired behaviors. Without it, peoplewill fall back into old habits.

Finally, senior management must alsoestablish the discipline to follow the system.This means active involvement and willingness to change systems when needed.Once all of the ingredients are in place, it ismuch easier to hold people accountable.

If you create the right behaviors by over-lapping standard work and visual controls atall levels, supported by a management system that includes rewards, accountability,and discipline you will free your organizationfrom the yo yo pattern to go beyond sustainment and start driving ever morerapid change.

STRATEGICVISIONING Stop the Yo Yo Diet by Developing a Lean Management SystemBy Ga ry Rascoe, Senior Management Consultant and Tra i n e r, TBM LeanSi g m a® In s t i t u t e


Gary Rascoe

Have you ever tried to lose weight?Probably quite a few of us have taken theweight off only to put it back on beforetaking it back off again in a cycle of “yo yo”dieting. We generally know what we need todo to sustain a healthy weight, but we oftenfail to do so.

Similarly, why do some companies getgreat LeanSigma® results, but then fail tosustain them while others do so with notablesuccess? How to sustain results is one of themost important questions that companiesface today. The companies that successfullysustain change have the right formula ofleadership, structure, and tools that allowthem to create a force for change bydeveloping a “Lean Management System.”

For a successful—and sustained—continuous improvement effort, organizationalstructure and systems must be consistent

Accounting has long been a worldunto itself with difficult-to-understandinformation and a language all its own.What exactly does revenue mean? What arevariances? What is absorption? These allappear on financial statements, but the average business person probably doesn’treally understand them. Lack of a commonlanguage in which the financial operationsand the rest of operations can communicatehas created the accounting function as anisolated silo in many organizations. Withlean manufacturing and lean businessprocesses rapidly becoming the world’sstandard, traditional financial reporting hasbecome a barrier to a focus on customerdemand.

In a lean company, standard costaccounting methods are likely to inadve rt e n t l ysabotage lean efforts. This happens becausegenerally accepted accounting principles(GAAP) require some of an organization’scosts for people, buildings, and other thingslike excess materials to be treated as assets.

Under GAAP, some of these costs areput on the balance sheet as inventory, andaren’t considered actual costs until thatinventory ships. This is a problem for leancompanies because one of the first thingsthat happens when going lean is that inventory drops, and as inventory drops,GAAP requires that we add these deferredcosts to our income statement, which inturn makes our financial results look bad.Meanwhile, inventory reduction generatescash, but the benefit of cash generation getslost. The question companies must askthemselves is how to create clarity in theirfinancial operations.

Implementing lean accounting encompasses two steps. The first involvesmaking the financial statements easy to readand understand and is called “plain Englishfinancials.” This makes the statements usefulto managers and helps all employees connecttheir job to the company’s bottom line.Plain English financials also reorganizesfinancial metrics to reflect the lean productcycle and reward lean behaviors. The secondlean accounting step is to apply the lean

principles of waste elimination and one-pieceflow to the financial operations themselves.

What nearly always happens is thatcompanies begin adopting lean in manufacturing or operations first and asthey make progress the finance part of theorganization is not considered, and, in fact,finance starts getting in the way. Theaccountants may still be asking about standard cost variances, and yet that’s not at all relevant on the shop floor, where theimportant factors are performance and meeting increased customer demand withexisting resources.

Occasionally we see that the leader ofthe company recognizes this gap andencourages the finance organization to getengaged and do things like read relevantbooks or participate in kaizen events, butthey often meet some resistance because thefinance people don’t understand why it’simportant. To make finance a value-addresource, they must learn and apply leanprinciples to their processes and reports.

A number of resources exist to helpfinance professionals gain information aboutlean accounting. The Lean AccountingSummit is an annual event that bringstogether finance and accounting peoplefrom across the United States, as well asinternationally, who are interested in learning about lean accounting. Increasingly,we’re seeing people who are also interested in learning what lean accounting is, thechanges that need to be made in the financearea, and how to make those changes.

The learning process for conversion tolean accounting consists of three parts. Oneis learning how to support the change that’sgoing on in the organization by understandinghow the accounting function is affected.Second is to conve rt the financial informationto plain English so that it’s appropriate forlean operations and timely. Third, is wasteelimination in accounting processes.

It is hard for a many finance people toimagine life without a standard cost systembecause that’s what they’ve been taught. Butin reality, costing can be made much simpler. As inventory is reduced, much less


information is needed. You don’t have totrack transactional data every time you makea product. Lean accounting means creatingproduct-line or value-stream accountingstatements that don’t require standard costs.

Statements that do not use standardcosts are a deep, fundamental change to theaccounting function. Even after learningabout lean financial statements, finance people often go back and work on leaningprocesses without changing their statements.Later, when they’ve applied lean principlesand taken waste out of their processes, theystart delving deeper into lean accounting andthe statements get adjusted.

Increasingly, people are saying, “I reallywant a lean program for my finance andaccounting organization worldwide. I wantto change all of my financial and managementaccounting reporting for the company.”That’s where many lean companies are now.Coaching and information areavailable, and once an organization has adopted sensible plain languagefinancial statements, it has taken a big necessary step to calling itself alean enterprise.

Jean Cunningham, founder of JeanCunningham Consulting, is internationallyrecognized as a pioneer in the LeanAccounting field. She is the co-author ofReal Numbers and Easier, Simpler, Faster;both of which won the Shingo Prize forresearch. Jean is currently the CFO at StilesAssociates and was previously the CFO atLantech and Marshfield Door Systems.

FUTURESManaging without Standard Cost AccountingBy Jean E. Cunningham, CFO, Stiles As s o c i a t e s

Jean Cunningham

Engine seminar in Salt Lake City, Utah. Hi sattendance at that class sent a clear signal tothe entire organization that management s u p p o rted the lean transformation. Says Ge i e r,“ It was clear to me that if I didn’t lead byexample, it wouldn’t be a success.” Ge i e r’s s u p p o rt was critical, but the managementteam—the lean steering committee—wasresponsible for supporting the initiative ands t a rting it forw a rd. Having the managementteam on board allows for consistent communication and alignment of the strategicvision with the process of lean transformation.

But, noted Da y, “While management hasto support lean, it can’t d o it. Em p l oyees mustbe engaged and invo l ved. They are as i m p o rtant as management in keeping thep rocess moving forw a rd.”

Actually disseminating the messaget h roughout the organization is typicallya d d ressed at company meetings, via an “a l l - h a n d s” email, or even with a lean kickoffcelebration. The Powe r Point pre s e n t a t i o n sused for training and in kaizen events can alsobe helpful for getting the message out.

Standardize and Reinforce the MessageSome of us have paid the copyright fees

to utilize the TBM slides; and where I workis no different. Such slides already present astandardized message that has proven effec-tive over time. However, we ultimately usedthese as a starting point and have begun tomodify the slides to use references, images,and examples that are specific to our previ-ous kaizen successes. It’s easier for membersof an organization to relate to examples thatare relevant to their day-to-day jobs, so byusing “in-house” examples in presentationswe maintain the standard message but alsopersonalize it.

We then took this one step further.Inspired by a brochure that was provided toTBM Senior Management ConsultantAshwin Badve by the Engenio StorageGroup (LSI Corp.) with permission to sharewith other KPOs, we have created our ownbrochures. We have covered such topics asLeanSigma®; waste elimination; progressive5S; and safety, quality, delivery, and cost

TECHTALK

As you’ve learned along your own journey (or perhaps from training opportunities), essential success factors inany lean transformation include clarity ofvision and direction, compelling context,communications with conviction, a cultureof continuous improvement, and countermeasures discipline.

However, there is another aspect that issometimes forgotten—the consistent mar-keting of lean at all levels in the organization.

Equally critical is that employees at alllevels speak a consistent message when moving along the lean path. The KaizenPromotion Office (KPO) has a directresponsibility to develop a comprehensivemessage that will enable managementthroughout the organization to speak consis-tently and clearly on everything from a com-mon lean vernacular to the goals and objec-tives of the organization. Many companies


have tried lean—and failed—at varioustimes throughout their history, and we wereone of them.

SPUDNIK made its first attempt at alean transformation roughly a decade ago. Atthe time, says Andrew Blight, sales support,the company recognized the advantages itcould gain from having lean-trained people,but then a market decline caused management to “get cold feet” regarding themoney being spent, and the nascent leaneffort died. Both Blight and manufacturingdirector Duane Day were with the companyat that time, and they both lay blame for thefailure on lack of management support.“This time around,”says Blight, “[we knowthat] the more people who understandwhat’s going on, the more they will feel apart of the process.” And of course that’show you gain buy-in.

Another common problem encounteredby companies starting on a lean journey isthat they hire the knowledge they need—dedicated employees who have come fromother companies that have their “own way”of doing lean. This “individual approach”can be a source of confusion for others inthe organization, especially if they’ve alreadyreceived some training that is inconsistentwith the new way of doing things. A company needs to create a common messagethat can be understood by everyone in theorganization in order to foster teamwork,engagement, and sustained success.

Developing a marketing plan to helpcommunicate and sustain this common message is essential to any KPO. Successfulcompanies follow these basic rules:

• Create a clear message • Standardize and reinforce the message • Repeat it often • Use the message consistently at all levels

Create a Clear MessageMost companies do this by communicating

the compelling reasons the company ise m b a rking on a lean journey, coupled with thestrategic vision and direction the companymust follow. In SPUDNIK’s case, then-CEORolf Geier attended a Quest for the Pe rf e c t

Cultural Transformation: The KPO’s Role as a “Marketer” of LeanPatrick Be h rendt, Lean Process Ma n a g e r, SPUDNIK Equipment Company, LLC

Patrick Behrendt

(SQDC) boards and performance measure-ments in our new “Lean Library” guides.These guides can be used during kaizenevents, new employee training, lean training,benchmarking trips, and other lean practices. They are brief, well-organized, and most importantly, they tie directly to information found in the slide presentationsand other training materials—a standardizedmessage. Standardization facilitates the ability of companies to reinforce the message repeatedly.

Repeat It OftenWith the first-line supervisors trained in

“Managing for Daily Improvement” (MDI),they too can provide the standardized message via the brochures, slides, and verbalcommunications with their employees. Thisrepetition up and down the managementchain helps reinforce the lean message andmanagement’s commitment to the process.

Use SQDC boards, management walk-throughs, and communication boardsto showcase the important topics, recentsuccesses, performance measures, and othercritical communications. We get the linee m p l oyees invo l ved during the walk-thro u g h sand use the opportunity to repeat our critical initiatives. We have created our “RedWall” (red because it’s SPUDNIK’scorporate color), which highlights the performance measures deemed critical to thesuccess of our company, and where we alsohighlight important safety information,human resources announcements, and our“Lean Library.” The Red Wall is a one-stopsource of important information for everyone in the company. Locating the wallprominently means that the important


information we wish to communicate isalways available and easy to find.

We have also standardized an all-handsmeeting at least every two months to repeatthe lean message, our progress, and ourcommon goals and objectives. We also usethis opportunity to showcase model areas orsuccessful kaizen teams, a means of celebratingsuccesses that re i n f o rces eve ryo n e’s engagementand commitment to the process.

Says Day, “Through communication people who normally don’t take ownershipcan see what’s happening and this encouragesthem to become involved. Once theybecome involved, then they take ownership.So communication of successes helps theculture to grow.”

Use the Message Consistently at All LevelsOne means of regular communication is

to send out mailings in employee paychecksof progress updates, successful kaizen teams,the “Lean Library” brochures, and so on.Use the brochures, training slides, and othermaterials from Day One training to create a“Lean Overview Session” for initial trainingof new employees.

To help generate enthusiasm and sparkcreativity, sponsor a company-wide namingcontest for your “brand” of lean. If you aregoing to preach unused creativity as one ofthe eight major wastes, this activity willshow employees you’re serious about needingtheir engagement.

Once your logo has been identified, useit on company shirts, hats, and pins that canbe provided at the end of kaizen events.Sometimes, you can obtain volunteers forkaizens just because they want the new shirtor hat. This is cost-effective advertising for

lean and can be very effective. It makes people feel they are part of a team. It alsoshows fellow employees that their friendsand co-workers have taken part in a kaizenand can foster a healthy dialog among them.

Marketing LeanStarting and sustaining a lean transforma-

tion in an organization is not a “build it andthey will come” process. It requires activemarketing on a regular basis. And whilemanagement and others may take on someof the marketing role, it is truly one of theessential duties of the KPO. There’s a reasonthat “promotion” is part of the officename—without promotion, the culturechange that is so essential to a successful leanjourney is not likely to take place.

Regular communication is one of thebest means of empowering people. Simplygiving them the tools isn’t enough. Theymust understand the reasons and the visionand have the freedom to move forward.

At SPUDNIK, which is headquartered inBlackfoot, Idaho, with its parent companyheadquartered in Germany, communicationhas had another benefit. “Ownership hasseen what we can do,” says Geier. “We arenow an example of what can be done.”

“Our successes have had a good influenceon the entire company,” adds Blight. Andthat’s the true power of a successful leanmarketing campaign.

20

All over the world, heading offshore tooutsource production has become so commonplace that it is now accepted as thenorm. Offshoring does indeed make sensefor many companies, especially those thatwant to establish a global footprint. Toomany, however, outsource production for thewrong reasons. Focused on the allure ofcheaper labor, they are blind to the tacticalcosts of manufacturing overseas. They maysave money on unskilled labor and byachieving economies of scale, but they willpay more in longer lead times, increasedinventories, more management resourcesneeded for planning and logistics, and constraints on their ability to respond quickly to changing demand.

Despite these and other hidden costs, off-shore manufacturing has become a fact oflife, and now the challenge for many compa-nies is to effectively manage the resultingglobal supply chain. Effective managementof offshore manufacturing generally involvesconducting thorough research, developing alogical strategy, and looking ahead for—andmanaging proactively to prevent—potentialproblems. It also requires establishing opencommunication with suppliers about expec-tations, especially when all requirements arecontractual.

If you are considering offshoring some orall of your manufacturing, the following willprovide a basic guide to the potential prob-lems, business considerations, and successstrategies associated with this increasinglycommon practice.


THINKSYNC

Know the Pain PointsNo matter what business you’re in, you

will find that offshoring brings many painpoints to the fore. When outsourcing someor all of your operations, you will have todeal with longer lead times, the extent ofwhich will be determined by the complexity,variation, and shipping times for the parts orproducts involved. Longer lead times willalso require you to more accurately forecastinventory needs.

In addition, you’ll confront cultural andtime zone differences that can make communication difficult and can engendermisunderstandings. You’ll need to addressissues of product integrity, quality, and variation. Sometimes you may encounterimpractical shipping options. And you mayhave limited or no visibility into the overseasoperation, making it difficult to identify aproblem before it’s too late to fix it.

The most pressing of these problems arelead times and quality issues. There’s no getting around the fact that transit times,not to mention often-forgotten factors likeholidays, vacations, and the like in the manufacturing country, will greatly increasea product’s lead time. Because everycompany wants to have products on handwhen its customers want them, you will likely have to stockpile inventory, incurringenormous costs in capital and warehousing.Accurate, effective forecasting will help, buteven the best forecasts won’t remain accuratewhen they must be firmed up two to sixmonths in advance of production.

Additional pressure to stockpile inventorycan result when sourcing a single item froman overseas manufacturer that insists on filling an ocean container with that item.This forces you to buy more of a productthan is needed at a particular time, whichadds inventory, transportation, and storage

Going Off s h o re? Look before You Leap Ken Koenemann, Practice Leader, TBM Lean Value Chain Pra c t i c e


costs. Moreover, many Asian manufacturersrequire cash up front for their services. All of these factors can force your company tomake larger capital investments than intended.

Another critical issue facing offshoremanufacturers is maintaining product quality and integrity. A number of incidentsinvolving manufacturers in Asia that produced substandard or unsafe productshave made the news recently. Involvement insuch a scandal can cost you—not only inlost profits but also in brand loyalty. It’s hardto gain back trust once it’s been lost. Qualityissues often are closely tied to a lack of visibility into offshore manufacturing operations. If you choose to manufactureoverseas, you must be willing and able toclosely oversee those operations (or hiresomeone trustworthy to do so) to ensurethat quality standards are being met.

Gi ven all the potential problems associatedwith offshore manufacturing, you mightwonder why anyone would want to do it.The reason is that, at least for some, thebenefits outweigh the pitfalls. To make surethat is indeed the case—in other words, thatit is not just a matter of perception and thatthe benefits actually do outweigh the nega-tives—you’ll need to do extensive, thorough,and accurate research before going ahead.

Research FirstIt goes without saying that nobody

should jump right into something as complex and fraught with pitfalls as offshoremanufacturing without first doing extensive,careful research.

Finally, when it comes to labor, the value-added content can be as important as thecost of wages and benefits. When a productwith low value-added content is manufac-tured in a process that eliminates waste, itmay actually be cheaper to produce it locallyrather than offshore.

After determining which products aresuitable for outsourcing, it’s time to considerwhere to produce them. Not all offshorelocations are created equal, and as we’venoted, cheap labor shouldn’t be the onlydeciding factor. While investigating variouslocales, consider not only labor costs butalso managerial costs (which may not be asinexpensive as you might assume), intellec-tual property protections, availability of util-ities and other infrastructure, associatedtrade-offs (for example, good roads versuspoor roads), and local culture—especially asit pertains to business and legal practices.

All of these considerations will come intoplay in another important step: creating a“value chain map” that captures all of thecosts and operational data (such as cycletimes, inventory, and so forth) associatedwith your pro d u c t’s journey from the offshorefacility to its final destination.

Visualizing each point in the value stre a m ,from order to delivery, makes it possible topredict where problems might occur—andto take steps to pre vent them from happening.

Prevent ProblemsOnce you’ve completed that “homework”

and (with the aid of a value chain map) havedeveloped plans to address every identifiablecontingency, you can take steps to help e n -s u re the success of your offshoring ve n t u re .

One mistake companies often make is focusing on the lowest purchase price peritem instead of considering the total landedcost of sourcing from offshore suppliers.Total landed cost includes such cost factorsas transportation, port charges, duties andtaxes, insurance, and material. It alsoincludes internal, “soft” costs, such as thosefor capital tied up in excess inventory andfor storing more inventory than needed, andfor often-overlooked considerations like thecost of handling inefficiently loaded containers.

Not all products are suited to offshoring.Most suitable may be those that have longlifecycles, are simple and cheap, do notundergo frequent design changes, will besold or used in the region where they areproduced, and/or require significant manuallabor content.

There are several reasons why these typesof products make good candidates for off-shore manufacturing. For one thing, whenproducts have longer lifecycles, there is lessrisk associated with carrying enough inventory to compensate for long lead times.Also suitable are items that are cheap enoughthat quality isn’t a concern (that is, it’s lesscostly to scrap bad parts than it would be tore q u i re the kind of quality standards re q u i re dat home to avoid scrapping bad parts).

Other strong candidates are parts orproducts that are sold near the site of manu-facture or that will be shipped to anotheroffshore location for assembly. Localizingproduction of products that will be sold inthe region where they are manufacturedresults in shorter lead times, lower invento-ries, improved customer service, and higherprofits. Moreover, buying a component off-shore for use in an assembly that is producedin the same region improves lead times andflexibility while reducing working capitalrequirements.

Leveraging a Lean Value Chain for Significant Competitive AdvantageOctober 28–29, 2008 • Gaylord Opryland Resort & Convention Center • Nashville, TN

Are you at the stage on your lean journey where you’re ready to extend lean beyond your own fourwalls? Do you want to take your lean transformation to the next level to gain even greater competitiveadvantage? If so, consider a great new opportunity to learn how to do just that with LeanSigma® for theExtended Enterprise (LSEE).

LSEE is a two-day workshop for senior-level managers (chief operating officers, senior vice presi-dents, and vice presidents and directors responsible for operations, supply chain, purchasing, logistics, distribution, warehousing, planning and scheduling) looking to extend lean into the value chain andextended enterprise. You will learn how to leverage a lean value chain to create game-changing competitive advantage and how to provide superior value to your customers, build strategic supplierrelationships, understand customer requirements, and better meet customer demand.

Key Learning• How and where to apply lean value chain techniques to maximize improvements in creating

customer value and optimizing the performance of your supply chain.• Benchmark your company’s performance versus a lean value chain.• How to get closer to your customer and synchronize all aspects of the value chain to meet the

requirements.• How to implement the four critical links of a lean value chain: demand management, order

fulfillment, business planning and scheduling, and supply management.

For more information, contact Michael Zsitnyar at

[email protected] or call1.800.438.5535, ext. 823.


potential supplier, and thoroughly assess itscapabilities (including technology, engineeringskills, cost structures, and so forth) to becertain that the right partner has been selected. Once you’ve chosen that partner,document all of your requirements regardingorder volumes, product specifications, andoperational details in the contract. Andfinally, monitor offshore suppliers no differ-ently than you would your own manufactur-ing operations.

Going offshore can improve your com-petitiveness and open up new markets; justremember to make that decision based onfacts that take all costs into account. Andonce you’ve decided to manufacture over-seas, stay vigilant and continue to carefullymonitor and manage your supplier.------------------------------------------------------Reprinted with permission from CSCMP’s SupplyChain Quarterly, Quarter 1/2008. ©2008 SupplyChain Media. All rights reserved. Visit their website at www.SupplyChainQuarterly.com.FosteReprints: 866-879-9144, www.reprintmar-keting.com.

Perhaps the best advice is to do every-thing possible to avoid problems in the firstplace! And that’s essentially what the follow-ing suggestions are all about. They may seemquite basic, but these preventive measuresare often overlooked when companies focussimply on cheap labor.

• Use key metrics and a scorecard system to understand if product is flowing as planned. Setting up a system for tracking and measuring performance—much like those you use on the home-based manufacturing floor—will allowyou to assess offshore performance at a glance and will provide early warning when product flow is getting off-track.

• Communicate regularly and clearly withoffshore suppliers. Don’t assume that anoffshore manufacturer understands whatyou require. Put expectations in clear,unambiguous writing, especially with respect to quality, and be prepared to follow up.

• Visit offshore manufacturing sites regularly to find and solve problems before they become big enough to affect

your company’s ability to profitably meet its customers’ requirements.

• Lay out terms for agreements and p a rtnerships in contractual form. Sp e c i f yexactly what you need with respect to quality, cost, delivery, and service.

• Perform comprehensive assessments of offshore suppliers to ensure that they a re capable of meeting your expectations.Look at areas such as manufacturing capabilities (productivity, quality, etc.) and capacities, quality systems, technicalexpertise, ability to comply with specifications, and financial stability.

Weigh the FactsOffshoring can be a logical and cost-

effective way to improve your company’sworldwide competitiveness, but as we’veseen, there’s a lot more to it than simplychoosing a manufacturing site or finding acontract manufacturer overseas.

Ensuring success requires learning andweighing all of the facts before contractingwith an offshore supplier. Map the pipeline,understand your total landed costs, visit the

LeanSigma® for the Extended Enterprise:

THINKSYNC (continued)

Appleton Papers Inc., in Appleton,WI, is a fairly typical manufacturing companywhen it comes to financial reporting and itsbudgeting process. But since applyingLeanSigma® to its manufacturing operationswith excellent results, the company decidedthat it was time to implement lean in itsfinancial processes as well, and a good placeto start was with the company’s AnnualOperating Plan (AOP).

To facilitate this process, the companyconducted a business process kaizen eventfor the AOP. Traditionally, each divisionwould prepare an AOP presentation forCEO Council review. Once council reviewwas complete, the divisional AOP presentations, along with a total companyconsolidated AOP presentation would besent to the board of directors for their review and final approval at a late year-endboard meeting.

The typical AOP process was lengthy,requiring a start date in August in order tohave all reviews and approvals (both internaland at the board level) completed by the endof the fiscal year. This meant that the divisions were using just seven months ofcurrent-year data and forecasting the last fivemonths of the year in order to preparebudget projections for the following year.Once the process started, changes andadjustments inevitably were required as timepassed during the review process and newinformation became available.

The objectives of the AOP BPK eventwere as follows:

• Determine content requirements for CEO Council and Board pre s e n t a t i o n s

• Determine timeframe requirements between the CEO Council presentation and Board presentation

• Determine corporate financerequirements

• Establish a consistent and standardprocess for all divisions

One of the first things the event teamdid was to determine who the customers ofthe AOP process were. Customers includedthe board of directors, divisional presidents/general managers and their direct reports,the CEO Council, the corporate finance

function, and the executive administrativestaff. The needs of each of these customerswould be taken into consideration whenstandardizing the presentation format.

Historically, the lead time from the firstCEO Council presentation to presentationto the board was six weeks. The number ofloopbacks was estimated at 78, due to nonstandard content and formats among thedivisions, which added significant time tothe process.

To reduce these two major causes ofwaste, the team proposed eliminating the“d ry ru n” of the divisional AOP pre s e n t a t i o n sto CEO Council presentation, which wouldallow a later start date and save managementteam time. A later start date also meant thatthe divisions could take advantage of usingnine months of actual financial data, need-ing to forecast just the last three months (9+ 3 versus the old 7 + 5). A shorter forecasttimeframe, coupled with a longer dataacquisition timeframe, would allow for moreaccurate budget projections while also eliminating changes that were being made tothe presentations as additional actualmonthly data became available during thereview period.

To eliminate loopbacks, the team decided to standardize the report format andprocess for all divisions, which would makefor easier board review and reduce the risk oferrors. The team established a shared computer network structure on a centrald r i ve for direct input of data by each division.

These simple changes allowed the company to trim the reporting process bytwo full weeks, a 33 percent improvementover the previous year. Preparation time instaff hours dropped from 832 to 240, areduction of 71 percent. Loopbacksdropped from 78 to 18, for a savings of 77percent. The total monetary savings, in stafftime and paper reduction, was $44,000.

The end result was that everyone wasmuch happier with the 2008 AOP process.The standardized process and formatsallowed the 2008 budget to be finalized in asingle iteration, which was a huge timesaverfor eve ryone invo l ved. (Continued on next page)


FIELDNOTEAppleton Papers: Taking Waste Out of the Annual Budgeting Pro c e s sSt e ve Kula, Exe c u t i ve Dire c t o r, Finance, St ra t e gy, and Planning, Appleton Id e a s

Steve Kula


As part of our ongoing strategic commitment to improve our consulting services, TBMcontinually seeks new ways to help guide our clients through the evolving challenges of am o re demanding business landscape. To that end, we are pleased to announce our part n e r s h i pwith Catalyst Business Systems—a lean consulting firm also based in No rth Carolina. Catalystis perhaps best known for its technology solutions for lean transformations, bringing significantsavings in cost and effort to organizations embarking on, or fully vested in, the lean journey.

These solutions simplify and reduce the administrative pain associated with the exe c u t i o nof strategy initiatives and enterprise metric tracking within any organization, while at thesame time driving greater levels of accountability and transparency throughout an organization.We are pleased to offer the following modules to our current and future clients:

1. Strategic Initiatives—Following the roots of the Hoshin Kanri process, this applicationincludes the integrated components of the x-matrix, metric tracking, action plans, and countermeasures. Additional features such as daily management dash boarding, d a t e - c h a n g e reporting, resource loading ,and roll up/down reporting drives the organization to address strategic initiatives as a daily management activity rather than amonthly or yearly event.

2. Stand-alone enterprise metric tracking—Every organization needs to keep tabs on critical metrics. The metric enterprise tracking module allows for daily, we e k l y, monthly, and/or quarterly reporting of metrics with integrated action plan and countermeasuref u n c t i o n a l i t y. Pe rformance dashboards, re s o u rce allocation re p o rts, and task managementfeatures provide real tools for daily management of these critical metrics.

3. Fully configurable share database—Get the value you deserve from the best practices, ideas, and knowledge within your organization. Our fully configurable database solutionp rovides a simple input process combined with a robust, industry - p roven search capabilitythat goes well beyond the limited capabilities of share drives and corporate intranets.

These web-based solutions are designed and tested by those who live the processes everyday, combining the discipline of the theory with the reality of implementation. By using themost up-to-date development technology we can offer easy-to-implement solutions thatrequire little to no IT support.

We are pleased to be at the forefront of value-added technology solutions and welcomethe founders of Catalyst, Mike Heath and Sheri Nemeth, as managing directors into theTBM family. Heath and Nemeth are lean industry veterans who created Catalyst after manyyears at Danaher.

We believe this partnership creates a dynamic opportunity to improve client results byintegrating Catalyst’s unique technology into our current consulting practices.

—Anand Sharma

In sharing their lessons learned fromthis process, the event team noted the follow i n gpositive aspects were critical to the success ofthe kaizen:

• Di versity and expertise of team members• Open and honest participation• Appropriately defined scope• Sub-teams—useful for dividing and

conquering the kaizen workload• Day-1 training—essential for team

building and alignment• Effective facilitation

The team also noted that the processcould have worked even better if the following items had been considered andaddressed in advance:

• Accessibility of stakeholders during the kaizen week

• Ensuring kaizen team members realize that this is a full week commitment

• Team members need to be allowed toparticipate without interruptions

• K a i zen support must be communicatedthroughout the organization

• Additional support resources need to be readily available

The AOP BPK team proved that it ispossible to implement lean concepts for thefinancial reporting and budgeting processesin an organization, to the benefit of all. The benefits realized from the AOP processwere also implemented for the company’squarterly business review process. If youhaven’t considered applying LeanSigma toyour financial operations, now is the time to do so.

NEWSNOTE

FIELDNOTE (continued)

TBM Partners with Catalyst Business Systems

The LeanSigma® Vision Tour provides an opportunity to explore some of the best examplesof lean manufacturing in America. The host companies on this tour have been engaged in alean journey for four or more years. Each leverages lean to generate dramatic operationalresults that drive profitable growth while remaining focused on the highest levels of customerresponsiveness. Most impressive, every one has an unwavering commitment from senior management to ensure a successful lean transformation. See for yourself how each companyhas proceeded on its lean journey. Tour their facilities and participate in open discussions onideas and issues of interest to you.

The tour will visit the following four companies over four days:Hayward Pool Products is a privately held manufacturer ofswimming pool equipment such as pumps, filters, heaters,

cleaners, lights and various molded white goods used in plumbing for both above - g ro u n d andin-ground pools. Hayward’s Clemmons, NC, plant, a 300,000-s q u a re-foot manufacturingf a c i l i t y, houses 41 injection molding machines, three blow-molding machines, and 20 assembly cells. This site also contains the 300,000 square foot East Coast Distribution Centerfor Hayward products. In July of 1999 the Clemmons facility began its lean journey and hassince conducted more than 400 kaizen events and liberated more than 64,000 square feet offloor space, with approximately 65 percent of its employees participating in kaizen activities.

Hubbell Power Systems, Inc. (HPS) is one of four strategic platforms of Hubbell Incorporated. HPS is comprised of severalwell known brand names, all of which are industry leaders: Ohio

Brass, A.B. Chance, Fargo, and Anderson. Today the Aiken, SC, facility produces three major product lines: insulators, arresters, and underground cable accessories. In November 2001 theAiken facility began its lean journey and since then has held 187 kaizen events, with 88 percent of its salaried employees and 57 percent of its hourly employees having participatedin kaizen activities. They have liberated more than 75,000 square feet of floor space andreduced inventory by 34 percent.

Sealy Corporation is the largest bedding manufacturer in North America, producing a diversified line of mattress and foundation products for everysegment of the market. Sealy manufactures to order and introduced lean inOctober 2003 to more efficiently serve dealer and customer needs. To that end,

most bedding orders are scheduled, produced, and shipped to retail warehouses within 48 to72 hours of receipt. This rapid delive ry capability allows Sealy to better satisfy customer demand.

WIKA Instrument Corporation, located just outside Atlanta, GA, isthe world’s leading manufacturer of pressure and temperature instru-mentation. With more than 650 employees at their 210,000 square

foot Lawrenceville facility, this company uses the latest technology as it strives every day forbetter quality and flexibility. In five years, WIKA has improved productivity by 20-40 percent, reduced lead time from five weeks to five days, and at the same time has found floor-space savings equaling nearly 12,500 square feet while adding six new production lines.All of these efforts combine to give their customers the best experience possible through shortlead times and on-time delivery.

TBM LeanSigma® Vision Tour:Tour Four World-Class Lean Businesses in Four DaysOctober 28–31, 2008 • Greensboro, NC–Atlanta, GA

Visit www.tbmcg.com/lsvt for more inform a t i o nor contact contact Beth Ann Hunt [email protected] or Michael Zsitnyar [email protected], or call 800-438-5535.

–––––––––––––––––––––––––––––––

Early Bird Discount20% Off

For Reservations ReceivedPrior to September 15, 2008

–––––––––––––––––––––––––––––––

CONSIDERTHIS!


Corporate Headquarters4400 Ben Franklin Boulevard

Durham, North Carolina 27704 USA

1.800.438.5535

Australia403A 86 Bay Street

Port Melbourne, Victoria3207 Australia

03.9681.7385

BrazilAvenida Moema 170, cj 45

Sao Paulo -- SPBrasil 04077-02055.11.5051.7490

ChinaRoom 3, 3/F, POS PLAZA

1600 Century Avenue Pudong

Shanghai, 200122 P.R. China

86.21.6888.6671

India“Technopolis”

Sector-54DLF Golf Course Road

Gurgaon, India 122 002 91.124.437.5995

MexicoCalzada San Pedro #250 Nte.

Edificio HQCol. Miravalle

CP 64660Monterrey, NL

52.81.50.00.91.36

Switzerland29, route de Pré-Bois

1215 Geneva 15Switzerland

41.22.710.77.70

United Kingdom3 Gleneagles House

Vernon GateDERBY DE1 1UP

United Kingdom44.1332.367378

TBM LeanSigma® Institute 2008 Event and Workshop Schedule

MANAGINGQ 3 . 0 8

TIMES

LeanSigma for the Extended Enterprise (LSEE)

Oct 28-29 Nashville, TN

LeanSigma For Process Industries (LSPI)

Sept 17-18 Gurgaon, India

Lean Management Accounting (LMA)

Sept 9-10 Durham, NC

Oct 21-22 Monterrey, Mexico

Dec 2-3 Durham, NC

Quest For The Perfect Engine®(QPE)

Sept 3-4 Sao Paulo, Brazil Nov 5-6 New Delhi, India

Sept 30 –Oct 1 Paris, France Nov 10-11 Beijing, China

Oct 30-31 Frankfurt, Germany Nov 11-12 Monterrey, Mexico

Quest for the Perfect Engine®–Garment Industry (GQPE)

Oct 21-22 Shanghai, China

Design For LeanSigma (DLS)

Dec 8-12 Durham, NC

Kaizen Breakthrough Experience (KBE)

Sept 8-12 Gai-Tronics Limited —Staffordshire, UK

Nov 3-7 ConMed –Utica, NY

Nov 24-28 WIKA –Klingenberg, Germany

Kaizen Promotion Office Workshop (KPOW)

Aug 25-29 Gurgaon, India Oct 13-17 Durham, NC

Oct 13-17 Monterrey, Mexico Nov 17-21 Shanghai, China

Oct13-17 Sao Paulo, Brazil

Business Process Kaizen Instructor Training (BPKIT)

Aug 26-29 Durham, NC Sept 23-26 Shenzhen, China

Managing For Daily Improvement (MDI)

Sept 15-19 ConMed –Utica, NY

Shop Floor Kaizen Breakthrough Instructor Training (SKBIT)

Sept 9-12 Monterrey, Mexico Oct 27-31 Gurgaon, India

Oct 7-10 Derby, UK Nov 11-14 Durham, NC

Oct 14-17 Shenzhen, China

Lean Excellence Conference (LEC)

Sept 22–24 McCain –Whittlesey, United Kingdom

Sept 23–25 Vermeer Corporation –Des Moines, IA

LeanSigma Vision Tour (LSVT)

Oct 28-31 Hayward, Hubbell, Sealy & WIKA –NC, SC & GA

TBM Lean Certification

Track 5 Week 1: Sept 9-12 Durham, NC

Week 2: Oct 6-10 Durham, NC

Week 3: Nov 4-7 Durham, NC

Week 4: Dec 1-5 Ceco Door, Milan, TN

Documents

Steinway Managing Times, Q3 2008