When I think of millionaires, I tend to think of people whose behavior and lifestyle are more analogous to, say, that of Donald Trump than normal folks. As the old F. Scott Fitzgerald line has it, “The rich are different.” And not just because they have more money.
Yet Dr. Thomas J. Stanley put that notion to rest in his books on millionaires, The Millionaire Next Door and The Millionaire Mind. His research shows that the millionaires don’t all live in the Hamptons, and that they tend to be married with children, not braniacs, work but aren’t workaholics, shop at Costco, and “don’t do the same things that jet-setters and beautiful people do” (from The Millionaire Mind). The remarkable thing is that millionaires are, apparently, pretty much like the rest of us.
This, however, is not about millionaires. It is about lean organizations. Public pronouncements (generally given during industry speeches) notwithstanding, lean operations are the exception, not the rule in this industry. There aren’t a heck of a lot of them. Often, when I ask people who don’t participate in putting forth the lean rhetoric why they can’t make their operations lean, why they can’t, say, operate with a one-piece flow approach, I get an answer that almost seems as though it has been codified into a form that is passed from company to company: “We make _____________, so we can’t do that.” The rich are different. So are the people, apparently, who make all kinds of things.
Yet just as millionaires really are just like the rest of us, lean organizations are just like any other company—at least from the standpoint of what they make. How they make it is another story entirely.
Consider these numbers: labor productivity up 18%; scrap down 48%; on-time delivery 100%; capital avoidance of $1.8-million. Those are just some of the metrics that have been realized at Vibration Control Technologies (VCT), a joint venture between Freudenberg-NOK and TAG Holdings. This supplier to Ford, Honda and Nissan produces torsional vibration dampers which, essentially, are rubber and metal devices that are used to counteract vibrations from engines, thereby addressing one aspect of NVH. While these components are truly beneficial vis-à-vis their function in the vehicle system, it should be noted that some people might think that they are the sorts of things that ought to be produced in a mass-manufacturing mode. But the 147 people who work at the VCT plant in Ligonier, Indiana, people who have participated in 30,600 hours of classroom and shop floor training during a three-year period, think lean. They work lean. They have achieved those improvements. And they have been responsible for the operation achieving a Shingo Prize.
I had the opportunity to visit the plant with Paul Parent, president of Freudenberg-NOK’s Vibracoustic North America. Those metrics are from 1999-2001. Parent candidly admitted that prior to that time there were some issues that needed to be addressed at VCT—including serious management changes. But there is an understanding at VCT of the importance of the competitiveness that is gained through the elimination of waste and related lean practices. As I was taken through the 47,000-ft2 facility I saw cells and evidence of 5S. I saw boards for visual management. I saw on-going kaizen. I saw machinery and equipment and containers that could be moved without requiring a massive, pyramid-building style amount of work.
By and large, I saw common sense at work. I met with people who understand the nature of improvement—and why companies that don’t improve won’t survive. In many ways, what I saw at VCT was a place that is all the more extraordinary for being, well, ordinary. Sort of like the plant next door (which is probably being run by a millionare.