AME's Target Magazine tells how Bicron
transformed itself into a "lean", modern organization!
Stress, some successes, and standing up to the competition.
Making the transition to a “lean organization” may not be as simple as it sounds. Dealing with a downturn and a later uptick in business while you’re streamlining the organization add to the challenge, according to Dick Reed, chief operating officer of Bicron Electronics Company, Canaan, CT. A small company (with about 125 employees) started in 1964, Bicron designs, manufactures, and markets solenoids, transformers, and special products for customers in automotive, transportation, medical equipment, computer, and security markets. Reed and fellow Bicron employees shared their “lesson learned” during a recent AME workshop, as selectively reported here.
Show a Need for Dramatic Change.
Reed believes that one of the most effective ways to launch an overall improvement effort and reorganization is to document and communicate the need for dramatic change. “We had to convince everyone at Bicron that we were in trouble with our customers,” he said of the reorganization begun approximately three years ago. “Our customers wanted better quality, delivery, and prices. We offered specific examples -- letters, etc. -- and posted them in the plant. We needed to be competitive not just here, but also in global markets. Our president, Peter Kent, did a hell of a job convincing people that we needed significant improvements, not just five or ten percent.”
Drastic changes began. Management tore down many of the traditional boundaries in employee job descriptions. Direct labor associates were asked to tackle many tasks (inspection and final audit, corrective action root cause analysis, training and process documentation, doing engineering change orders, standard work analysis and workplace improvement activities, monitoring safety and environmental compliance, ISO auditing, etc.) previously handled by indirects and salaried workers.
Inspectors were transferred to other jobs as production control, manufacturing engineering, and materials management ranks decreased significantly. “Value-adding associates readily accepted and were capable of making the change. Direct labor associates are much more capable than most other business executives believe,” Reed said.
Stand-Up Cells Implemented
Direct labor employees hadn’t landed on Easy Street, either. The usual sit-down production lines are gone, replaced by stand-up cells. “They give us better flexibility to serve the customer, with smaller lot sizes and flexibility to man the cells at the rate the customer needs as well as improving quality, productivity, and inventory turns,” Reed said of the cells.
Workers also were asked to participate in frequent, stand-up meetings to discuss progress and problems. “There’s a strange difference between standing up and sitting down in meetings, if you want to get a lot done,” Reed added.
Visibility is emphasized here. Point-of-use storage, kanban cards, the 5 Ss, take time monitoring, and trend charts documenting quality, delivery, productivity, etc. support this customer-driven focus.
Kaizen Activities
Process changes and documentation, quality changes, rearranging cells/equipment, and other areas are targeted for kaizen (continuous improvement) projects at Bicron. Rather than rely on outside facilitators for kaizen projects, the company sponsored salaried, indirect, and direct worker visits to other plants to participate in breakthrough kaizen teams and AME seminars. The company did bring in trainers on standard work analysis, who trained direct labor people; now directs facilitate workplace improvement projects.
Reorganization Results, Challenges
When sales figures decreased about a year ago, Bicron’s supervisors were moved to other positions in the organization. As the sales picture brightened, they were not replaced: the newly-revamped, more flexible organization absorbed these tasks as direct labor learned to analyze, prevent, and fix problems on a day-to-day basis. Factory-wide productivity, measured by direct labor as a percentage of sales, improved 16 percent during the past nine months.
Plenty of challenges confront the company. There’s a need for more training to help all employees improve their processes and work toward ISO certification, according to Reed. Workers in selected cells will soon receive releases directly from Bicron’s customers. Although cell workers have a say-so in the selection of new hires, they may be asked to begin evaluating one another’s performance; a computerized setup is being considered. Tooling fixture issues need to be addressed to achieve load/load walk patterns.
Direct labor compensation is based on performance in making product, making improvements, and learning special skills. Bicron has implemented differentials for team leaders and is looking at differentials for workers with special skills.
Then there’s the stress. “I’ve learned a lot about stress,” Reed said. “A lean organization takes time to implement and a lot of patience.” There’s a need to stop and tell a joke now and then, to celebrate successes (an extra-long coffee break, serving a special lunch, asking employees to share their successes with others in the company during get-togethers, etc.) “We’re blessed that our associates share a similar work ethic and they’re fun to work with,” Reed said. “They are a delight and they make this whole thing happen.”
( By Lea A.P. Tonkin. Reproduced from Target -- Innovation at Work, the periodical of the Association for Manufacturing Excellence (AME). January/February/March 1997
Update on Excellence
"It’s Not Easy Being Lean")