Better ideas, better growth at Texas metal fabricator

Five years ago, when Rob and Ed Grand-Lienard called a companywide meeting at Special Products & Mfg. Inc., they proclaimed that, from that day forth, things would be different. Questioning the status quo no longer would be frowned upon but instead be viewed as central to the fabricator’s success.

Rob Grand-Lienard is CEO, his brother Ed is president, and both grew up in an environment that championed technology (see Figure 1). Launched by their father in a two-car garage in 1963, SPM bought one of the first CNC punch presses in the Dallas-Fort Worth area. Rob recalled learning programming as a teenager, and by the time he assumed his current role in 1997, the Rockwall, Texas, company was a showcase of cutting-edge metal fabrication. Last year SPM made $35.5 million and employed more than 200 people. That’s a long way from a two-car garage (see Figure 2).

“We’ve always invested in leading-edge equipment,” Grand-Lienard said. “But we never really put the people in the equation. Don’t get me wrong; we treated people well. But it was really more about the equipment, about staying at the leading edge of technology. We felt that equipment could solve all of our issues. That worked when we were a smaller shop. With just 85 people, we could go out on the shop floor and make sure everything was running effectively just by walking the four corners. Then we grew to 100 people, then 125. And instead of two punches and six press brakes, we now had 12 punches and 28 press brakes. It basically got out of control, and we weren’t doing a good job managing it all.”

In the late 2000s business was growing, and yet Grand-Lienard noticed that margins were getting tighter. Modern equipment had given SPM the ability to fabricate faster than ever, but you wouldn’t know it by looking at the financials.

Dick Kallage, principal at Barrington, Ill.-based KDC & Associates Ltd. (and a columnist for this magazine), has said that truth happens on the shop floor. Managers at a small shop can see truth simply by walking out their office doors and talking with welders and machine operators. But once a fabricator grows to several hundred employees, the CEO can’t spend time chatting with everyone. The shop has so much work and so many part numbers, problems aren’t immediately apparent. The truth is hidden.

This isn’t anyone’s fault. Management structure simply doesn’t grow with revenue. A large organization with several hundred employees is still “getting it done” with the bulldog tenacity of a small shop. Yet when they have hundreds of employees and thousands of jobs to manage, managers cling to a command-and-control, “my way or the highway” work environment to keep everything together.

From one perspective this makes sense. With so much complexity, the last thing you want is for somebody to ignore a set procedure. Even if a procedure isn’t working well, the tenacious bulldog keeps following it and hitting the wall. What the bulldog needs to do is step back, look at the whole room, and find a door to a better way.

SPM kept hitting that wall in 2010. When Grand-Lienard saw SPM’s shrinking margins, he stepped back and started looking for a door.

Flipping the Pyramid

Grand-Lienard recalled certain people who had been hired at SPM in the 1990s and early 2000s. “They were smart, witty, had great ideas, and they’d be gone within two or three months. They hated it here, because we created a culture that didn’t encourage ideas. We had a way of running the plant, and we had groomed our management team not to accept new ideas.

“Moreover, people were territorial. They were very protective of what they knew. If they knew how to set up XYZ job, and nobody else could do it, they wouldn’t teach anyone else, because that was their monetary value to the company. Their thinking was, ‘If you lose me, you lose the ability to set up this job.’”

In 2010 the company hired a continuous improvement (CI) manager who convinced top managers that they needed to engage front-line employees. As Grand-Lienard recalled, “[The CI manager] told us, ‘Let’s turn the pyramid upside down, and let’s empower our 200 employees to make changes.’ That was almost scary, at first. But we jumped off and said, ‘Let’s do this.’”

So began a challenging 18-month transition “where we went through denial and a lot of resistance, acceptance, and then finally commitment,” Grand-Lienard said. “It was a grieving process, really, because we found that we had trained our people as ‘yes’ people. Now we were asking them to think.”

After the company hired the CI manager in 2010, managers also began touring other noncompeting plants that practiced lean manufacturing, including those with progressive cultures that promoted employee engagement and idea sharing.

“We didn’t go into this thinking we were going to change the culture,” Grand-Lienard said. “We thought we were going to just ‘lean out’ the shop, to move products faster with better efficiencies and less waste. That would drop dollars to the bottom line.” But after visiting those other operations, “I started connecting the dots.”

What picture did those dots make? Process transformation and cultural transformation go hand-in-hand.

Process Transformation

SPM mapped out processes from the time the customer calls to the time the company gets paid. That map showed several glaring problems, including poor communication, bad information, little or no documented standard work, and no new product introduction (NPI) process.

Improvement began in the front offices. “If you fix the end of the line,” Grand-Lienard said, “then it just sits there starved, because it’s already lean, while the upstream processes remain inefficient. So we found we really needed to start at the front of the line.”

The front office was full of silos. Sales threw jobs over the wall to estimating, which threw them over to order entry, to engineering, and to production. “Nobody talked to each other, and there was no cross-communication,” Grand-Lienard said, adding that every time a job was thrown over to another department, people had questions. So people in the front office started looking at downstream processes as “internal customers,” asking them what they needed for a job to move quickly through the operation.

SPM particularly had a bottleneck in engineering, which usually had numerous questions about jobs that couldn’t be answered quickly. So the front-office team started to get those answers earlier in the process. Sales talked with engineers and order entry. They also communicated with people on the shop floor. Is the proper press brake tooling or weld fixturing available? Do we need to design a weld fixture? Is this weld possible with our available resources?

The company created standard work instructions, installed whiteboards showing in-the-works projects, and started using standard check lists. In effect, the check list helps salespeople ask all the right questions before they hand the order to estimating and engineering. Does the quote request have items that need to be purchased or require long lead times? Why does the bill of material call for a hex nut, but the spec in the drawing is a countersink flathead? All these details and more are addressed before the company commits to a due date.

Estimating is now part of the engineering group. This ensures estimators and engineers talk to each other continually and ask the right questions. Tooling information now is on the company’s servers, accessible with a few mouse clicks. Moreover, many engineers have shop floor experience, so they know what’s doable and what’s not with available tools. The engineering department also has specialists familiar with bending and welding.

The shop floor remains departmentalized, though a few multiprocess cells have been developed for certain work. The press brake area now is organized into what the company calls “streets,” and each has its own technician who prestages tooling. The company also rearranged the assembly area so that some products travel on a line where downstream demand dictates the rate of production (see Figure 3). “We basically flipped from a push system to a pull system,” Grand-Lienard said.

About Ideas

Such process transformation can’t happen without good ideas, and good ideas are hard to come by in a command-and-control environment. This was SPM’s greatest challenge: Change a culture of “yes sir” to a culture of “how?”

During that initial meeting in 2010, the Grand-Lienards showed an inspirational video that juxtaposed shop floor workers with troop-rallying scenes from the movie “Braveheart.” “Ed and I then got up and said, ‘Look, starting today, we’re changing. Why? Because we want everyone to have a job here in 10 years or 20 years,’” Grand-Lienard recalled. “ʻWe need all of you to tell us what’s not working in the plant.’” The brothers then pointed to the management team. “ʻAll of these guys are your support.’” Managers no longer were there to tell people what to do. Their job was to make other jobs easier.

Whence began a cultural transformation. When the company kicked off the program in April 2010, the brothers challenged everyone to generate ideas and make 100 small improvements by the end of the year. “We made 187 by the end of the year,” Grand-Lienard said.

The second year they challenged employees to make 300 improvements and initiated a rewards and recognition program. If workers implement three ideas, they receive a T-shirt that reads “Lean Champion.”

If they have five implemented ideas they get an SPM polo shirt, and if they reach 10 they receive a $200 gift certificate and an SPM ball cap. Then every quarter the company rewards those with the top three ideas with $200 gift certificates. At the end of the year, the organization puts all the quarterly winners to a vote, and the winner for the year receives $1,000, presented in a ceremony with an oversized check. For just submitting an idea, a worker receives a token to use in the vending machine. It’s a small token, literally and figuratively, but it shows that ideas are valued and encouraged.

Ideas aren’t just dropped in a box and forever forgotten. During department huddles at the start of every shift, operators and supervisors talk about ideas and write them on whiteboards. If the idea takes less than 30 minutes and costs less than $300, they can just solve the problem and turn in a brief report to show when and how they implemented the improvement.

Grand-Lienard recalled a drill press operator having problems with an oil can on top of the machine tipping over. People in the department fabricated a cup holder to place the oil can in. Problem solved, and her job was made just a little bit easier.

If they can’t solve the problem on the spot, they report their findings to managers during their 8 a.m. gemba walk. Managers review those ideas and take them to a ballistics team, which includes people from sales, quality, engineering, and purchasing. The team triages the problems and gets to work. They place the issues on a ballistics whiteboard, where they state the problem, the person responsible for solving it, and the due date.

“This ballistics board is right in the cafeteria,” Grand-Lienard said, “so employees can see we’re working on it.”

Resistance and Acceptance

Grand-Lienard emphasized that on the surface all these changes seem proactive and positive. But people resisted, including certain managers and supervisors.

It wasn’t easy, he said, but after about nine months into the improvement program, it became clear that some people weren’t about to change.

In 2011 Nora Harding came in to interview with Rob for a position in human resources. She had worked at large companies before, and many of them had gone through various kinds of continuous improvement. “When I explained our vision and mission, she immediately picked it up,” Grand-Lienard said.

Once hired, Harding began going out, at Rob’s request, to talk to people on the shop floor and ask questions. “When she started engaging people and asking questions, so many issues bubbled up,” Grand-Lienard recalled. “I’ll be honest—we had issues with supervisors and we had issues with leadership.”

“When I first joined this organization, we had a very command-and-control environment,” Harding said, “and our turnover was high. People would do a job for a short period of time, then they’d bail for 50 cents more an hour. But we also had some amazing, die-hard, know-it’s-going-to-get-better-someday employees.”

Some people just didn’t fit with the organization anymore, including several longtime employees, some lifelong friends. Some were let go, some retired. But again, these people had given SPM years of their life, Grand-Lienard said, so the transition had to happen with “integrity and respect.” These people knew the company was moving in a different direction, and it just wasn’t what they signed up for.

Open Communication

Every two months Rob and Ed hold what they call a “brown bag lunch.” HR runs through specific questions with a cross section of employees (selected randomly) for one hour. What’s working? What’s not working? If you were king or queen for a day, what would you change? What’s the rumor mill saying? Employees submit these questions in writing to HR, and their identities remain confidential. Ed and Rob then come into the room, eat lunch with the staff, and tackle the issues.

The lunches keep an open line of communication between top management and the shop floor. For instance, several years ago an employee brought up the issue of his career path. He was operating a press brake, but where did the company see him working years down the road? If a press brake operator eventually wants to work in purchasing, what’s the logical career path? Or if an operator wants to manage someday, how exactly does that person go from an operator to a lead to a supervisor to a manager? Or what if a person likes hands-on work and wants to remain in such a capacity for the long haul? In short, what do employees’ career paths look like, and what do people need to do to reach their goals?

From this, Harding has built a career path program that helps answer these questions. It includes testing that identifies peoples’ strengths and weaknesses. But she added that the most important aspect is simply an open line of communication with people on the floor.

In effect, HR ensures that the company has the right number of managers with the right number of direct reports, and identifies people with potential, be it for the leadership or hands-on technical track, then designs a coaching and training regimen to suit. If managers identify an entry-level employee with leadership potential, they send that person to conferences and seminars for further training.

SPM University

Five years ago Rob visited his executive coach, who asked him about the future. Where did he want SPM to be in 10 years? He conceded that he never really thought about it. Grand-Lienard reached out to other business leaders and asked them the same question. Most said something about company size, revenue, or number of employees: We want to be at 100 employees. We want to have a 100,000-square-foot building. We want to reach such-and-such in sales.

“That didn’t resonate with me,” Grand-Lienard said. “How was I going to get people to follow me if it’s all about the size and revenue of the company? What’s going to engage people?”

Rob wanted SPM to be a world-class company, one that serves not only a regional and national but also global supply base. SPM’s customers now have a global footprint, and to follow its customers, SPM may well have multiple plants dotting the globe by 2020. “In order to sustain a company that lasts 100 years or more, we need to have sites all over the world,” he said.

Still, why should employees care? They want a growing place of employment, but aside from small job shops (where many owners are quite happy to keep their business small), most companies of a certain size want stable growth. How could SPM become an employer of choice, one of the top places to work in the area?

“We want to become a world-class company where we teach, coach, and train the team of tomorrow,” Grand-Lienard said. “The reason Ed and I are in business, the thing that galvanizes us, is that we want to provide a legacy company that provides opportunity to people.”

From this came SPM University, or SPMU. What started five years ago as an idea is now detailed in a manual several inches thick, and it entails more than just technical training. In short, it shows how the company can identify opportunities for people.

It starts with onboarding. HR managers asked supervisors exactly what they want in a new employee, and from these interviews they identify exactly what kind of people the company needs. The onboarding process also spells out how to identify employees with potential to move up to other positions.

“Our goal is to give everyone the opportunities they want in their career,” Harding said.

This includes identifying future managers and what SPM calls “technical leaders.” As Harding explained, “We used to just promote the best press brake person into a leadership role, and call them a ‘supervisor.’” A skilled brake operator may be a great technical leader—a person who can answer technical questions and solve technical problems—but may lack certain soft skills a department supervisor needs. To that end, the company now identifies future supervisors through assessments, coaching, and specific training on communication and problem solving.

Observation is central to Harding’s job. As director of leadership development, she watches people, sees who they go to when they have questions, and asks supervisors, “Who on your team does everybody go to when they need help?”

She also asks about employees with poor attitudes, or those that don’t seem to work well with others. She’s always wary when someone tells her that a certain employee “just isn’t the right fit.” She digs deeper. For instance, one brake operator had a bad attitude not because he was just a negative person, but because he felt he wasn’t given sufficient training or opportunity.

After investigating the matter, Harding found that he was a satisfactory brake operator, but he really excelled at setup. “No one told him how valuable his skills were to the organization,” she said. “But when we spent a little time with him and gained that trust, things changed. Two years later, he was awarded the distinguished associate of the month. And he’s now one of the most positive employees in the press brake department.”

Grand-Lienard added that the company is as aggressive as ever when it comes to adopting technology. Last year, for instance, it purchased a CNC press brake with automatic tool changing (see Figure 4). Changeovers that used to be measured in hours now occur in a matter of minutes. Operators have found that shortening changeover time between jobs has sent bending productivity through the roof. At this writing, the fabricator is considering buying a second machine.

The new press brake does the work of two or three—great from a productivity standpoint, but it does bring up the concern that’s as old as the Industrial Revolution: Technology is replacing jobs. But as Harding explained, SPM now adopts technology not just from a throughput and efficiency perspective, but from an opportunity perspective as well. What opportunities will this new machine give employees? As a matter of policy, the company does not use technology to replace people, she said. People may be trained for new positions, and some departments have gotten a little smaller because of attrition.

“How you communicate and deliver this message is key,” Harding said. “We want to become more efficient, and if we don’t utilize this technology, we won’t reach our goal in 2020. So they didn’t see new technology come in and six people lose their jobs. They saw a well-respected team member as a press brake operator now running [that technology], and he’s excited about it.”

What Else?

When SPM began its transition, managers developed a product-mix matrix, grouping everything into categories. The first is for simple parts, and subsequent categories cover products of increasing complexity, all the way up to complete box-builds: fabricated, assembled, tested, and drop-shipped to customers’ customers.

“My idea is that by 2020, we will be able to drive or fly something out of this plant,” Grand-Lienard said, adding that the more complex projects have come about because people have been asking what else customers need.

SPM’s success really has boiled down simply to spending time asking questions.

What are your problems on the floor? Where do you want to be in your career? What else can we build? What else do customers need?

Two words pretty much sum it up: What else?

Images courtesy of Special Products & Mfg. Inc., 2625 Discovery Blvd., Rockwall, TX 75032, 972-771-8851, www.spmfg.com.