Monday, January 19, 2009

Obama meets small business embracing Lean

US President-elect Barack Obama stopped in Ohio Friday to pitch his $825 billion economic recovery and job creation plan at a manufacturing plant that is succeeding with Lean.

CNNMoney reports that Obama's stimulus sales trip features Cardinal Fastener, a company that has reinvented itself for the alternative-energy future.

Cardinal traditionally supplied parts to fortune 500 customers such as John Deere and Caterpillar. While those sales have slowed during the recession, Cardinal also provides fastener joints, nuts and washers to wind turbine manufacturers. The growth there has been explosive. Cardinal expects green energy clients to account for 90% of growth in the coming years.

On their website, Cardinal credits Lean Thinking for shortening their lead times to become the best in industry. Manufacturing costs have declined significantly, quality has improved and their customer service is unequalled. Their success with Lean Thinking has been hailed by industry, as attested by an article in Distributor's Link Magazine.

While their expectations were aggressive by their previous standards (30% productivity increase, 30% inventory reduction, 50% lead time reduction) the actual results surprised everyone. Lead time was reduced to seven days from 5 weeks (80%), quality issues are virtually non-existent and inventory was reduced 54%. So when they achieved this success in manufacturing, they started to tackle office practices. How could they live with an order entry process requiring up to 5 days when they can now manufacture it in 7 days? By taking the Lean Thinking principals to implement a Lean Office, they reduced this processing lead time to less than 10 minutes.

The power of Lean Thinking in leading organizational change continues to amaze me, even after countless implementations. Cardinal Fastener talks about the plant "Blow Up" experience. Kaizen events that result in immediate implementation of continuous improvement initiatives get to the core of Lean. Engaging the people who do the work and to change the culture to relentlessly drive waste out of their processes by focusing on what the customer defines as value.

What is your organization waiting for?


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