Continuous Improvement: Culture transformation
Through methodical, and at times surgical, application of a continuous improvement framework, Snyder’s-Lance’s Columbus team made a full organizational transformation in only one year.
The Snyder’s-Lance Columbus, GA manufacturing site, originally established as the Tom Huston Peanut Company, has been in existence since 1925. In recent decades, the site changed ownership a number of times until Lance Inc. purchased the company out of bankruptcy in 2005. The many lean years had taken a tremendous toll on the site culture, infrastructure and ultimately, profitability. In January 2011, Snyder’s-Lance hired Chuck Staton and quickly promoted him to site director of manufacturing. Three months later, Staton hired a dynamic servant leader, Brian Dubak, as the Columbus bakery plant manager. What transpired over the next 21 months was a remarkable cultural and performance transformation.
The Columbus team applied a tried-and-true framework to nurture rapid, sustained organizational improvement. The process was focused on implementing continuous improvement (CI) tools and methodologies primarily from the total productive maintenance (TPM) tool box. CI tools were leveraged as a vehicle to drive culture change with sustainable performance improvement as an outcome, but not the specific focus. The framework, embodied by the three fundamental tenets of reliability, standard work and shared equity, was successfully applied to create a sustained, large-scale transformation in the Charlotte manufacturing site without directed capital (2009-2010).
The Columbus site transformation was also accomplished without directed performance-enhancing capital expenditures. The facility, however, was able to make an even larger performance step change in a shorter period of time. The tools/processes are applied specifically to create experiences and develop the capability of the organizational stakeholders. It is all about the people. The result of the overall process nurtures engagement and ownership, and taps directly into individual and organization-wide discretionary effort. Performance is not the focus, but becomes the outcome.
Key elements of the framework
A number of key elements are required to successfully create a performance culture: leadership, change management, reliability and standard work principles. In addition, these foundational elements must be sustained and supported to allow for program expansion to more advanced future elements. Too many organizations attempt to gain instantaneous performance improvement by management edicts, computer systems or advanced programs. This often leads to spikes in performance improvement that are rarely sustained. Worse yet, many organizations see improvements and think they are creating significant improvement. In reality, these scenarios may achieve 2-3 percent improvement. But the same tool(s) they use might have yielded 8-10 percent improvement if the organization applied a holistic approach.
The selection and development of servant leaders is critical to the change effort. Leaders must have a passion for people, as well as the ability to develop teams by allowing them to have authority, accountability and responsibility for their portions of the operation. Leaders also must have the courage and confidence to elevate those under them to an equal or higher status, while treating them with the utmost respect.
The role of leadership is about creating an environment of relevance since people who feel relevant are willing to engage. Leaders must also have the capability of leveraging basic CI processes as vehicles to educate and train personnel, and build teamwork across teams and functions. They must be able to instill the tools and knowledge into the teams they serve, providing support without removing accountability. Leaders also must be strong communicators who are truly engaged with the problems and issues faced by their team. The ultimate measure of the leader’s value is his or her ability to create an environment that promotes engagement.
It also is important that the leaders are given opportunities to develop skills. In many instances, such as a significant organizational change effort, they may have to change themselves. The most effective approach is one where management provides the education and tools to be successful, and selectively hires role model leaders who already possess many of the desired leadership attributes. Often, new leaders model the leadership, while existing leaders, together with the associates, provide the technical knowledge. Ultimately, a portion of the pre-existing leaders may not make the journey, but they will have been given every opportunity to successfully contribute, and the final choice will have been within their control.
Throughout the process, each leader must maintain the long-term vision to create self-sufficient teams with the capability of running day-to-day operations without supervision. At the beginning of the journey, boundary conditions may need to be tightened to gain alignment. The objective is to continually relax the boundary conditions until they are no longer apparent. The definitive measure of a leader’s success is the team’s ability to run the daily operation without him or her. Leadership is the first element and the prerequisite for all other framework processes.
The leadership group must understand how to navigate change since every organization is faced with change on a daily basis. Nurturing effective change is a key differentiator between a manager and a leader. It sets the good apart from the average and can be the difference between success and failure. Two valuable change management models are John Kotter’s eight-element model from his book, Leading Change, and Prosci’s ADKAR model.
Effective change management can mean the difference between pushing a program against resistance or establishing organizational pull. To initiate rapid and sustained change, pull must be established. The Columbus team knew creating organizational pull was the key to success. As a result, they leveraged Lifecycle Engineering (LCE) from Charleston, South Carolina to teach the group how to effectively use ADKAR.
The premise of ADKAR is to ensure leaders are effectively and intentionally generating awareness, desire, knowledge, action and reinforcement (sustainment), regardless of the specific project or effort underway. For example, the ADKAR approach was applied to the effort to create an employee-centric safety culture. Prior to the new leadership, safety was approached by the prototypical program model with average results. By leveraging ADKAR, the team was able to generate organization-wide ownership with commensurate results.
Brian Dubak sums up the results of the organizational pull that was created: “Originally, I was involved in all of the meetings and engaged with every activity. Now so many people are involved that I could not keep up with all of the progress. I am still very supportive, but now safety just happens.” Safety has become an outcome generated by the culture. This simple change management approach and philosophy is often overlooked by organizations, but it was a cornerstone of the Columbus transformation.
Reliability is a foundational element of organization success regardless of the business segment. In the manufacturing environment, reliability is a tangible entity that can be measured in major and minor stops (downtime). With people-focused leaders and effective change management, organizations can quickly garner support and effort from their associates. Organizational trust is built when the teams can not only see the results in the numbers, but also experience the improvement in their daily activity.
System and equipment reliability is a key support for the overall change and improvement effort. If people experience poor reliability on an ongoing basis, they will begin to lose trust in the vision. Reliability is not only experienced; it is easily measured in system performance numbers such as efficiency against theoretical maximum output (Tmax), schedule attainment and scrap. Reliability is also the root cause or driver for many other consequences such as safety, product quality and associate morale.
The Columbus team was faced with a tremendous challenge because a large portion of their equipment was old and lacked sustained, effective maintenance. One important, initial step in rectifying this situation was hiring Nikki Lofton to lead the transformation of the bakery maintenance team. The next critical step was gaining a level of control and stability in daily operation by eliminating reoccurring issues. This meant resolving problems to the root cause reactively and, at times, ignoring some issues to allow resources to sustainably eliminate others. Once the team created enough available time, they began to rebuild the preventative maintenance (PM) program. The PM program rebuild is ongoing and encompasses continuous updating of job plans, identification and elimination of defects, reevaluating parts inventories and installing a new, computerized maintenance management system (CMMS).
The core maintenance team supported enhanced reliability, but effectively moving the organization in the right direction required ownership by everyone. The operations and maintenance teams engaged in basic root cause analysis (RCA). They learned and began to leverage a few key tools such as Why-Why (also called 5 Why) as well as focused improvement (FI) and A-3s. Once the constant “white noise” of various issues began to dissipate, the teams could begin to solve the reoccurring issues that plagued system reliability.
As the level of system control was enhanced, the production systems were center-lined, and the teams began to leverage production control charts to not only gain visibility into performance on the floor, but also to take active ownership and control of their systems. At the onset of the effort in 2011, LCE was engaged in supporting the education and development of a small team dedicated to a single line. The plant team under Brian Dubak’s leadership quickly took the process and spread it across the entire bakery, customizing and enhancing the basic philosophies.
As control was established, the plant operations and maintenance teams were able to dedicate time to the next level of reliability enhancements, multiplying the performance results. They began to selectively rebuild and, where needed, redesign equipment. Equipment transfer points driving visible reliability and performance issues were also addressed and improved. The Columbus team pulled in a few expert resources to help them get to the next level, such as Tommy Snipes from the Charlotte plant to support a rebuild and timing calibration on the circa 1970s flow wrappers; Jim Hartschuh, a company commercialization expert to support the technical education of the associates and the redesign of the cookie production line; and Erik Jenson from corporate engineering to redesign transition points on one of the newer cracker lines.
Only after enough stability was achieved to gain the full value of the time and effort, were resources pulled in. Many organizations force resources upon plants in an effort to drive immediate improvement. However, for resources to be effective, the plant must have basic stability and, most importantly, should pull the resources as opposed to having them forced upon them. The plant team has now reached a point in their journey where they are starting to utilize what may be the most important and most effective tool in the entire TPM tool box, autonomous maintenance (AM).
The operations team began to use AM in the second half of 2012. As with other tools used throughout the transformation, AM is being applied intentionally to build and enhance the culture with performance as the outcome. From the transformation perspective, AM teaches technical skills while building equipment knowledge. When executed to the fullest benefit, a diverse group of operators, technicians, maintenance and support functions have the opportunity to experience and develop culture through teamwork. The outcomes of successfully led AM efforts are ownership, shared equity and enhanced equipment reliability and performance. The performance numbers are the outcome, but the true value is clearly generated from cultural development combined with practical learning experiences provided by hands-on activity. Too many organizations become fixated on the “what” and lose sight of the “how.” But the how is the most important aspect of any effort, whether it is a complete transformation, an improvement or simply sustainment.
Standard work is a key contributor to building not only a sustained, but a continuously improving organization. A well-developed, comprehensive standard work program is also a key enabler for organizations that must be able to adapt quickly. On the surface, the concept of standard work may appear like an authoritarian or management-driven approach. How it is applied is what differentiates it as a key element supporting the growth of an empowered, high-performing organization as opposed to a constrictive management tool.
Standard work is empowering when the associates and the teams own and develop it. It can be divided into two types: associate standard work, often called CIL or CILT (clean, inspect, lubricate, tighten), and leader standard work (LSW). CILTs are used to document and guide the efforts on the floor. The program documents and line items should always be created and owned by the associates. Subject matter experts and other leaders are responsible for supporting and facilitating the program’s development.
In the manufacturing world, a fully developed standard work program encompasses cleaning, inspection, lubrication and basic maintenance, all performed on the floor by the associates. It includes steady-state operation as well as unplanned downtime events. It covers hourly, shift, daily, weekly and monthly activity. Since the program is developed and executed by the associates, change management is built in. The teams take ownership of their work and take responsibility for continually updating the procedures as their acumen grows and the business needs change. It is important for the program to meet the needs of each function to eliminate one-offs created by functional silos.
The benefits of the program are extensive. At the Columbus site, the program documented the critical tasks and created consistency between team members and across shifts. Previously, much of the knowledge was experiential and not formally documented. Standard work programs are essential to maintaining system center-lines and documenting activity frequency. The program can be updated quickly and easily, allowing an organization to rapidly adopt new or better approaches. Additionally, the system allows new hires or inexperienced associates to quickly come up to speed with the key elements of running a line.
As time progresses, these types of programs will become even more important for documentation with regard to the evolving requirements of the Food Safety Modernization Act (FSMA). From a regulatory perspective, if an item is not documented, it never happened. Standard work provides documentation. Standard work in the form of CILT can also serve as a leading indicator. A study performed in the Charlotte facility found CILT compliance was a leading indicator for not only system performance, but also consumer complaints.
Associate standard work must be complemented by a comprehensive LSW program. We have all heard the phrases “trust but verify” and “what is expected must be inspected.” These convey some level of truth, but the servant leader looks at associate standard work with a different filter. The true leader wants to be involved with the associate standard work program to understand where he or she can better support the team, not to audit and police. The objective is to ensure each team member understands how the activity in standard work contributes to the success of the overall plant organization. Leaders also can check for understanding to uncover education opportunities at the individual level and look for potential program gaps or improvement needs.
The LSW is developed from the critical tasks of the leadership group and must be strategically developed to support and overlay the associate standard work program. The LSW program ensures that leaders engage in the most important focus areas and approach their role consistently across leaders and shifts. It also ensures leaders hold impactful conversations on the floor and engage in a meaningful way with all team members. Plus, LSW documents the best current approaches to leading in the organization. It serves as a template enhancing the effectiveness of new leaders.
LSW is an activator for shared equity across functions. Even leaders from other areas in the production facility, or other functions, can perform a well-constructed LSW audit in an area outside of their expertise. It allows associates to show a non-expert performing the LSW what they do and how they perform many of the activities. Teams educating others build a true sense of importance and belonging. In this way, LSW is an important component of instilling relevancy, which is a foundational element of engagement.
In addition, LSW ensures alignment and consistency and, when done well, can begin to create the spark in many team members to apply discretionary effort. As with associate standard work, the LSW program should be designed with full input from the leadership group as well as key stakeholders. Change management should be built into the process.
The Columbus manufacturing site provided the ultimate test of the engagement and transformation framework. Through methodical, and at times surgical, application of the framework, the Columbus team has made a full organizational transformation in only one year. The site leadership team coined the objective of “Grow Our People – Grow Our Business.” This has been the rallying cry to align the entire Columbus organization behind the mission.
The team fully understood that business success and health began and ended with the people on the Columbus team. The focus on people is best reflected by the early emphasis on building a safety culture. The site showed a 53 percent decline in recordable incidents in 2012 vs. 2010, the year prior to Chuck Staton accepting the site leadership role. In comparing 2012 to 2011, the site has shown incredible safety results, including a 34 percent decline in recordable incidents, a 53 percent decline in lost time accidents (LTAs) and restricted duty and a 90 percent reduction in days away from work. The focus on people has taken the site to one of the best safety performances in the company, surpassing the overall supply chain goals and averages in each category.
From a business standpoint, the performance numbers are equally impressive. Comparing 2011 to 2012, the site improved its performance against controllable cost by an incredible 9 percent . Material usage, direct labor, indirect labor, overtime and all other controllable financials showed significant improvements without any directed capital. The site performance against Tmax (theoretical maximum output based upon the system bottleneck when the system is running) improved from 69 percent in 2011 to an average of 80.4 percent over the last seven periods of 2012.
The improvement in Tmax and the value of the framework is best exhibited by Columbus’s primary sandwich cracker line (Line 1). The flow wrappers, originally built in the 1970s, were rebuilt in 1983 and were performing at 66.2 percent of Tmax in 2011. Most plants would have used the age of the equipment as an excuse and lived with the performance results. But the new leaders in Columbus who inherited the issue accepted accountability.
The Columbus team understood they had to pay to play, and the only way to gain future capital investment was to build processes and programs to fully leverage the existing equipment. The team had to build credibility with the organization through performance. By fully leveraging the framework with a focus on building team ownership, the Columbus Line 1 hit an average Tmax of 79.0 percent for 2012 and an average Tmax of 83.6 percent for the last seven periods of 2012, exhibiting incredible sustainment and a continuously improving trend. As impressive as they are, the numbers cannot reveal the level of ownership, moral, pride and discretionary effort that is present today not only on Line 1, but across the entire bakery. Success is contagious.
Strategic implementation of the framework described and leveraged in the Line 1 example has allowed the bakery to reduce first-pass scrap by 58 percent year over year. The business performance improvements also have had impacts well beyond the manufacturing floor. The site exceeded 99 percent service to sales for eight of the 12 periods in 2012. The plant has continued to perform in 2013, meeting or exceeding 99.6 percent service at the time of writing this article. Additionally, consumer complaints have been reduced well beyond internal goals, exceeding their consumer complaint frequency goal for 2012 by 27 percent. As is always the case for an organization where TPM is a culture and not a program, the team will not be satisfied until they approach zero: zero safety incidents and zero loss. The journey of any CI-focused organization is long and ever-developing, and the Columbus team has clearly shown what is truly possible when servant-minded leadership passionately focuses on engaging people and developing sustainable processes.