The Foundations of Lean with Nick Hinman

Episode Overview

“You’ve got to start simple. You have to build that house, right? You can’t put the second floor on a home until you build a foundation so that’s where you have to have the right structure in place.”

As the VP of Corporate Strategy at Tacony, Nick Hinman’s focus is on maximizing the customer experience while ensuring the business continually improves. Over the years, he has become an expert in all things lean, culture, and value.

In this episode of Zen and the Art of Manufacturing Podcast, Bryan Sapot and Nick sit down to talk about building the house. What does that mean exactly? Well, to build an exemplary company, you need to start by creating a road map and then begin laying the foundation. Using data to improve, a great culture, and transparency, are all things to be established for the company upfront.

Listen in as Nick share’s his experience with firefighting and how manufacturers can transition from constant firefighting to something more sustainable. And, finally, Bryan and Nick discuss focusing on the small wins, building trust throughout the organization, and daily morning meetings, all contributing to the success of your improvement efforts.

“I fell in love with the idea of driving value but also finding a better way to do things, and seeing how those improvements help the business but also help people and really drove the culture of those businesses. I enjoy seeing the successes of operational improvement.”

Key Takeaways

Where do you start building a lean manufacturing company?

Fire fighting is in every company, not just on the manufacturing production floor. So, first things first, you need to start observing to understand what’s going on. Then, you need to have conversations with the leadership and management teams to determine goals and what’s holding them back from achieving those goals.

These kinds of conversations are critical to developing the roadmap. The obvious next step would be to create the roadmap.

Once developed, you can decide how to achieve the goals in easy to accomplish steps. The idea is to focus on the small wins and teaching people. This creates a level of engagement that is needed to ensure buy-in and change.

How do you transition from an environment of fire fighting to one that is more sustainable?

Start really simple. Show that roadmap with detailed objectives and little accomplishments that will help you achieve your goals. That’s the defining part of the roadmap – small things that add up to a winning strategy. It’s hard to accept change so if you can work with the line lead or the line manager, all of the small wins are noted and proved out. This proves the strategy and gets people to buy in.

It’s a simple way for people to fall in line with the goal.

How do you create this type of environment?

You can’t slip on the discipline, even just a little bit. It’s very hard to create this type of environment, but if you can stick with the discipline and the plan, the end result is transforming.

Establish management and culture upfront. Document processes and programs. Create KPIs and trust with people. The idea is to be proactive in your approach in creating a culture that is supportive and problem-solving.

Another important lesson is to always learn from what you did the first time to ensure it doesn’t happen a second time. This establishes a culture of continuous improvement. And, finally, “Know where those checks and balances are of when things start to get too good which is just as concerning as if they start to get really bad.”

When you do all of these things, the pieces will start to fall in place for an engaging, supportive culture that allows you to embrace lean.

So, where do you start in building this lean culture?

Keep it simple.

A house is the structure of the company. To be successful, you need a foundation of trust and engagement with employees. When you have that solid structure in place, then you can begin to add in the sophistication – the lean tools, an incentive program.

“You’ve got to start simple. You have to build that house, right? You can’t put the second floor on a home until you build a foundation so that’s where you have to have the right structure in place, roles and responsibilities, job descriptions, everybody needs to understand, you have to have a training matrix that defines what are the key things associated with each line, what’s the skill set of the people that I have associated to this line, where’s my backups, etc.

You have to have all of that built out and then you start establishing a standard of work for people.”

Structure, or foundation, can mean anything from standard work to Gemba walks to 5s. But, when it comes down to it, you’re putting your team in a position to maintain your KPIs and when that has been accomplished, then you go up to a level of more complicated processes and tools.

How do you run morning meetings?

“Most importantly, we make sure these meetings are consistently held, in every plant. Both manufacturing and our warehouse and distribution areas are included. These meetings are very simple. We look at:

• How did we do yesterday?
• What do we have to do today to improve from yesterday?
• Is there anything we need to talk about of importance or that we need to accomplish as a team?

During these meetings, we highlight quality issues we ran into, miss picks on the lines, customer services issues, scrap from engineering, backorders, and overall efficiency, basically all the key KPIs we track on a daily basis.

This creates awareness among the team so everyone knows where we are for the week, where we need to go, and what we need to concentrate on.

We also share quick wins and if we weren’t successful in meeting KPI goals, we discuss how to do better.

Essentially, the morning meeting embodies open communication and dialogue to keep people engaged. If you stay connected at the right level, the right goals are established, and the right tracking is in place, the rest will follow.”

How to design an incentive program for manufacturers

Before you even get to that point, the incentive program should already be on the roadmap for the future. It just depends on when the right time is.

Designing an incentive program in manufacturing can take a while. You have to put it in at the right time and in the right way. But, you will likely hit a point where you think, our processes are doing really good. The culture is there, people are getting it, we’re hitting KPIs, now it’s time to look at something a bit more accelerated.

For Tacony, their incentive programs has three tiers to best accommodate their employees and is based on production efficiency, quality, and 5s. While this works for Tacony, keep in mind that every incentive program is different and should be based on the needs of your company.

Production efficiency tackles the question of, “What did I get done that I could control?”

Quality measures quality at the line. The company doesn’t want to send bad parts to the customer and it also enables them to obtain the right information for the continuous improvement process.

And, finally, the last pillar of the incentive program is 5s. This is 50% of the program. “In my opinion, 5s is a critical component of a successful lean plant,” Nick says, “Clutter causes confusion and confusion causes inefficiencies.” So, when the emphasis is placed on 5s, it’s easy to onboard, move people around as needed, establish a standard of work, put in visual management tools like Kanban boards, and it creates an opportunity for employees to brainstorm and come up with fresh ideas on how to innovate.

When everything is in its place, it’s easier to do your job, and then, improve.

And, if there’s one thing to remember, don’t make the goals too high. They need to be achievable to be effective.

The power of habit and why it’s important

“If I can get leaders to buy into the habit, it feeds throughout the organization and becomes an expectation throughout the company. It enables everyone else to hold themselves to the same standard.”

A lot of the teaching around 5s and visual management is what helps the plant operate when you’re not there. When you can teach people through practice and conversation, it creates a habit that helps people connect the dots. It becomes a waterfall effect.

Incentive programs can become catalysts for developing good habits.

If I can get those leaders to buy into the habit, it feeds through the organization, becomes an expectation throughout the company, holding themselves to the same standard.

How do you determine if someone achieved the 5s goal for the week?

“We use a manual scorecard and have identified or assigned areas of the facility to a leader of a different area. They look at the 5s checklist and fill it out. The total score determines if that particular area passes or not.

We do this so the process is completely objective. You have to get over the pre-determined total score to get the incentive. There’s no leniency on this. You either hit the goal or you don’t.

If you don’t, the only thing you can do is try and hit the goal next week. It’s that simple.”

Should everyone do an incentive program at the plant level?

This is very situational and depends on the needs of each manufacturer, but if you’ve learned anything from this podcast, it’s that effort to keep employees engaged pay off in the long run. Not only are employees happier with their work, but it pays dividends for the bottom line.

An incentive program only contributes to better engagement. It’s a win-win situation.

If rolled out in the same way, it keeps people engaged.

Recommended Reading and Research

• Video: Full audio episode 
• Video: How do you create and maintain an employee incentive program?
• Video: Where do you start in building a lean manufacturing company?
• Book: Principles: Life and Work by Ray Dalio
• Book: The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt
• Book: Extreme Ownership: How U.S. Navy Seals Lead and Win by Jocko Willink and Leif Babin

Connect and Share

Nick Hinman is the Vice President of Corporate Strategy at Tacony. If you would like to chat with Nick, he can be contacted through his LinkedIn.

For more information regarding Tacony and the improvements they’ve made in their plants, read how Tacony increased efficiency from production to the supply chain.

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