OVERVIEW

Transforming a Vehicle Manufacturer into a World-Class Lean Enterprise

A leading US manufacturer for large commercial vehicles, diesel engines approached us about providing assistance and guidance to transform its company culture and become a world-class lean enterprise. With several manufacturing locations, the company has to carefully watch the cost effectiveness of various plants, tracking their safety, quality and overall productivity. Following an initial ‘deep dive’ assessment in 2013, eleven North American manufacturing plants were assessed to discover the readiness for change among plant team members, with a focus on building a culture of trust and the implementation of lean manufacturing.

HOW WE HELPED

Across its multiple manufacturing plants, the company found that the majority of team members were not ready to embrace change. Although there was some positive feedback regarding the idea of lean manufacturing, the concept was not widely understood. FTE Performance assessed and built action plans to create a foundation and a culture that is aligned to successfully implement lean manufacturing concepts. Work that began in 2013 with the deep dive assessment continued with plant improvement plans lasting through and beyond 2015.

RESULTS
  • Aligned Business Plan Deployment Strategy
  • Improved Communication Strategy
  • Increased Performance in Safety, Quality, Delivery and Cost

Challenges

Overall, the company was not prepared for major change. Variations in leadership behavior and communication skills contributed to a lack of coherency between manufacturing plants and a lack of transparency regarding performance issues. The lack of a clear overall manufacturing strategy was driving uncertainty, confusion and fear, and while tribal knowledge was high among team members, technical knowledge and skills varied widely from site to site. Most plants believed their business results were strong, especially when compared to other plants, but there was little understanding of lean theory and practice across the board.

Solution: utilizing an integrated strategy and focusing on improving individual sites

FTE Performance developed an integrated strategy for the company that focused on training employees in concepts of lean management, business systems and processes, and company culture, including the company’s propensity for positive change. Five phases of developing lean manufacturing were determined. Phase one zeroes in on adjusting the company culture. Phase two focuses on alignment, phase three is centered on discipline, and phase four revolves around tools. The fifth and final phase is continuous improvement and sustainment. At the time of this case study, the company was working mostly on phase one and phase two issues to change company culture and align ideas around lean-centered practices. As part of the process, providing specific manufacturing plants with their own plans of action as part of the whole company change became imperative

The company’s largest US MFG plant was selected as of the first plants the company addressed as a pilot. About six months into the initiated changes, leadership appeared to be dedicated but there was still some tension between union and management.

Solution: training management and team members through the implementation of individual site plans

During the first part of 2014, several workshops were held to determine the types of support that would be needed, develop a business plan deployment strategy and a communication strategy, training team members, and establishing a lean steering committee. As the first target, SAP’s individual plan focused on increasing revenue decreasing costs by limiting overtime, managing the labor force, increasing quality, adjusting inventory and delivery issues, and improving safety. Within one year, the pilot plant showed significant improvement and was on track for a $5.7 million savings from overtime reduction alone.

In 2015, the company asked FTE to provide support scenarios for four additional manufacturing plants.

Solution: Identify and provide individual support to specified plants

The pilot plant support scenario was a continuation of work that began in previous years and focused on a team concept for shop floor management, quality, materials, TPM and leadership development. Like the pilot plant, other sites were provided with a full project team for 10-15 days per month, focusing on phase I lean initiatives, throughput improvement, quality, leadership development, shop floor management, and deploying the business plan.

FTE Performance’s Output

Information gathered during our work with this company revealed that a strong communication cadence providing regular updates stops the rumor mill and helps build trust during change. Trust is also established through floor time, straight talk and setting clear intentions. Clear expectations should be set and monitored, with benchmarking and visioning trips to help build the team and increase their confidence in the company’s ability to improve. Participation from leaders at all levels—from the union as well as middle and upper management—is crucial to the company’s continued progress.

SERVICES PROVIDED