How do you define good company culture anyway?

At every LeanFab, questions about company culture and sustaining continuous improvement always seem to emerge. These lean manufacturing workshops and shop tour events, organized by the Fabricators & Manufacturers Association International, are dedicated to continuous improvement for fabricators. The talks and tours cover the nuts and bolts of continuous improvement, how the amount of work-in-process (WIP) dictates lead times, and the importance of measuring actual capacity capabilities and the actual time it takes to change over a machine from job to job—not the typical “15-minute” guesstimate.

Many who attend have concerns regarding sustaining the improvement, which often leads back to a discussion of culture. It’s easy to understand why when you consider what happened at one fabricator that hosted a LeanFab shop tour several years ago. The company requested anonymity, but the story proves a point. At the time of the tour, its operation seemed to be the epitome of lean in a job shop. Tools were labeled and organized, parts flowed, and everyone kept WIP buffers to an absolute minimum. Everything was clean, bright, and exuded utmost professionalism.

Then the company president fell ill and had to take some time off work. During that time the shop regressed to the old way of doing things; work piled up, and lean practices just weren’t sustained. By early last year the president’s good health had returned and the shop’s lean journey was back on track.

No wonder the conversation at lean events so often leads back to sustaining the initiative and, ultimately, company culture. So how exactly do you foster a culture that doesn’t resist but instead embraces a lean transformation?

“5S is always a good starting point.” So said Chris Ortiz, president of Kaizen Assembly based in Bellingham, Wash. “The visual workplace is a great stepping stone in getting your lean journey started, and it does provide performance improvement and productivity gains. It helps get people onboard because they have a nicer, more organized work environment. It doesn’t mean there still isn’t resistance. It just means there’s a lot less.”

Beyond 5S, though, come changes that can be harder to swallow. People have been doing their jobs a certain way for years, and now other people are timing their changeovers, observing what they do, and putting together time studies. “Lean now is about developing and following a procedure and doing things within a certain time frame,” Ortiz said. “This is where the resistance really comes into play. The first thing you need to know is that you really can’t avoid it. It will inherently happen. The question is, how can you reduce the impact of it?”

At many fabricators I’ve covered, incentives play a role here. For instance, Baltimore-based Marlin Steel instituted a bonus program tied to specific performance metrics. Skilcraft (covered in this issue), Burlington, Ky., “comingles” certain metrics, including throughput and on-time delivery, so that everyone is working toward the same goal. If one area of the company shows fantastic throughput, that’s great, but it doesn’t lead to success if on-time delivery and quality metrics suffer. Regardless of the details, shop owners say they find success by aligning employee incentives with company performance.

Another element is transferring the lean initiative from top managers to the shop floor. Sure, lean needs buy-in from leadership, but people on the floor sustain it. As Ortiz explained, “You need to train the concepts that are going to be implemented. Often we see organizations just train managers, then the managers need to find a way to pass that knowledge to the shop floor. You have to train everybody.”

He added that with this knowledge, employees can be involved in the decision-making. Be it through lean committees, regular huddles, or anything else, lean initiatives ideally shouldn’t come from the top, but instead from the people on the front lines, where the work happens.

As just one example, when Gap Partners Inc., a contract fabricator in north Georgia, moved to a new facility several years ago, the fabricator’s welders, machine operators, and assemblers visited the new building, with masking tape in hand, and outlined where they wanted each machine to go to make their job easier.

Most would agree that lean shouldn’t be a “management initiative” but instead one embraced by everyone in the organization. That’s easier said than done, though, especially after decades of brutal recessions and globalization. The very nature of outsourcing to “cheap labor” treats the people who perform that labor as a commodity. All this has built mistrust that’s difficult to overcome.

Consider a press brake operator who has endured tough times. He has seen co-workers hired and let go, but he’s held on, mainly because he’s good at what he does, and he knows it. His knowledge gives him job security, and he’s clinging to it. Why should he help document standard work procedures or train others when it was this knowledge that helped him keep his job and his family fed?

When I talked with shop owners in 2009 and 2010, I found that less work gave many the time to look inward and improve. They shortened the overall order-to-cash cycle and thereby increased their available capacity. Just because a shop frees up capacity doesn’t mean it can sell it, so financial success didn’t come immediately, but that available capacity sure came in handy during the economic recovery.

Increasing capacity isn’t driven by additional resources (though new people and equipment may be part of the equation), but instead by ideas. Those ideas bring bigger successes during the good times and help a business better endure the tough times. Ultimately, those ideas bring job security. (For more on this, see Dick Kallage’s Improvement Insights column in this issue.)

Consider again the press brake operator who, instead of working in a cyclical business where employees come and go, spends his days in a progressive shop where everyone is working toward the same goal: identifying and increasing available capacity. During the economic recovery, the fabricator sells and manufactures more work without hiring more people. Margins increase, the customer base broadens, and the business is better prepared to handle the next downturn.

All the while the operator participates in kaizens and his voice is heard. In such an environment, keeping knowledge to oneself doesn’t accomplish much.