"I see what this plant is doing. They are tying it all together and embracing the lean philosophy and culture. I can tell just by talking to the employees that they have the cadence now."
-- Marsh Beam, product manager and lean coordinator for the American Greetings facility in Bardstown, KY.
FOREST CITY – "This plant" is AGI IN STORE, a division of American Greetings Corporation in Forest City that manufactures custom permanent merchandising solutions/displays for greeting cards. The company employs more than 250 people and covers some 500,000 square feet of manufacturing space. They embraced lean concepts at an enterprise level (one that permeates all operations, not just the shop floor) about one year ago, and their results are so impressive that managers in at least five other American Greetings plants are making the pilgrimage to Forest City to learn from them.
Why? Because results speak volumes. The Forest City plant, working with IES lean senseis (teachers), has almost a 3-to-1 return on investment so far. Over the past year, more than 30,000 square feet of floor space was saved, and 15 percent of their labor force was freed up for other assignments. Dennis Tarlton, Director of Operations, says the company's goal is to save half a million dollars by 2008, and feels comfortable they will achieve that goal.
After more than a year of guidance from Sam McPherson, NC State University's Lean Enterprise specialist, the Forest City plant's evolving culture is increasingly apparent. Employees are empowered, waste is more easily identified and reduced at the source, and the continuous improvement process is spreading from manufacturing to the design area, a sure sign that the entire company is involved.
World Class Culture
"This world class approach reaches into product development and design, engineering, procurement, human resources, key customer relations, and other areas," explained McPherson. "All of these areas affect how our clients satisfy customers in quality, cost, productivity, lead time, profitability, and long term survival. Focusing only on manufacturing and logistics simply does not produce the results AGI IN STORE wanted."
AGI IN STORE Group Leader Mark Morgan has embraced the lean culture enthusiastically from the beginning, spending a lot of his own time to learn more about it, and mentoring many fellow employees. "I see the enthusiasm from our employees on the floor; they now know that lean does not take jobs away, it just helps us eliminate waste," he said. "We are shifting the culture, it's a slow process but it’s happening."
Director of Operations Tarlton now understands the amount of time it takes to thoroughly train employees, and notes with satisfaction that associates on the floor are taking the training and making it work for them. More than 60 percent of the company has received some training, and they have 15-20 employees qualified as lean leaders. He says that each time a team implements a lean initiative they take out 50 percent of labor costs.
"I now know where to start. I go where there's a need," Tarlton said. "We identify the bottleneck which gives us the greatest opportunity for waste elimination and that’s where we begin. Then we move upstream; that leads us to the next lean opportunity and it all connects."
Morgan says that the plant's lean infrastructure is now in place. Group leaders, team leaders, and employees are working together. "Now it's our job to set correct expectations. One of my greatest lessons in this process is to trust my associates to do what they can. I cannot and do not do it for them. I’m only a guide. We’re teaching them to teach others, and I think we are ready to do this ourselves now on a basic level."
Different Style
Ken Warren, Director of Manufacturing at the plant, is a former plant manager at a large textile company. He joined AGI IN STORE last fall, bringing substantial lean experience with him. "At my previous company we were driven by urgency due to the outsourcing of textiles on a huge scale. We just had to achieve large dollar savings fast. We had little basic training, it was sort of like a war zone," he commented. "This approach is different. I had three full weeks of lean training, and that filled in the gaps for me. It gave me the foundation to take lean to the next level."
Warren notes that this approach saved the company about $300,000 in cost of goods sold in 2006.
NC State University Lean Specialist McPherson said, "Where many companies struggle with adopting lean and Six Sigma to implement a world class enterprise is that they focus their efforts on employing what is known as Rapid Improvement Events over five days for 'Spot Kaizen. They become enamored by lean tools and techniques without understanding the management system these tools and techniques were designed to support. The tools were designed to surface problems, not to solve problems."
Getting It
Many of the American Greetings employees who are attending lean training classes at the Forest City plant learned about this comprehensive approach at an AGI management meeting where Tarlton and Morgan discussed their journey.
"We were implementing tools, TPM, Kaizen, SMED, but we did not know how to sustain our progress," said Marsha Beam, lean coordinator, American Greetings facility in Bardstown, KY. "I had read a lot but did not know how to fully interpret it, we were getting results but not at the enterprise level."
Beam will spend five full weeks in lean training in Forest City, hours away from family and her very fulltime job, because she knows the value. "The way I really got it was a combination of the way Sam teaches and by walking the floor in Forest City. The employees there simply shared everything, and I watched how they dealt with problems as they arose and how they did it with urgency. Then we went to a plant nearby who is also embracing this approach and took part in a meeting with them."
She says her greatest lesson so far is understanding that lean at the enterprise level will keep her plant in business. She also relishes the work environment because it’s positive and people are fixing things.
Jackie Reed is a printing supervisor at an American Greetings plan in Greenville, TN. She travels with other employees from her plant to take part in the trainings in Forest City, and is thrilled about what she’s learning. "I really got it today," she began. "I realized we were looking in the wrong places! I know to look for bottlenecks now to really improve our printing processes. We were using lean tools without knowing the concepts behind them so we could not sustain the improvements. Now we are all so excited that when we drive back together it’s all we talk about! Sam is the best trainer I have ever had in my 38 years with the company."
Keeping Jobs
"It's important for all of us to realize that lean is a powerful management system, it's not just for manufacturing. It incorporates a different style that places responsibility with employees. It gives us all ownership and breeds respect," said Casey Daniels, American Greetings lean coordinator in Greenville, TN. "If we want to keep our jobs here we must get better, faster, less expensive, and we can do that with lean."
Daniels notes that it all boils down to a culture change, something she sees happening in Forest City. "If you always do what you always do, you get what you always get." She says they have taken their training back and are already seeing huge differences. After one lean event, she said an employee told her that after 15 years, she now felt she was a part of the company.
Helping sister plants embrace this lean enterprise approach is heady business, and while the Forest City plant is making huge strides. Director of Operations Tarlton maintains his humble, cautious approach. "We are still focused on manufacturing and just now moving into other areas, we have a long way to go," he said. "If we were running a 100-year dash for World Class status, I’d say we were at about the 15-yard mark now. We're probably three years away from moving this process to our vendors and asking them to partner with us in lean."
While the 15-yard mark leaves a lot of running room, it's enough to see the momentum, know they are well on their way, and watch them hitting full stride. You can bet they will keep running.
For more information about lean transitions, contact NC State University's Industrial Extension Service at www.ies.ncsu.edu.
March 2007
