Most striking about the Pella story is that just a decade ago, the company's idea of process improvement wasn't much different than that of most manufacturing companies today -- factory centered, infrequent and pushed down to line workers from plant management. "Now we make changes every week, but we also get everyone involved," says Brian Giddings, Pella's corporate manager of Continuous Improvement. But what's the secret? How can a company transform a factory-focused, top-down, change-averse culture, where change occurs twice a year, to an enterprise-focused, bottom-up, continuous-improvement culture that averages five kaizen events each week? Giddings says 10 supporting elements are critical:
- Top-management commitment: Pella marks the start of its lean journey at the time when three company vice presidents -- one each from engineering, finance and manufacturing -- attended a public kaizen event and came back believers. Perhaps more important, Pella CEO Mel Haught was instrumental in launching and maintaining the lean initiative.
- Dedicated resources: Within the first few months of launching its first lean initiative, Pella established a Kaizen Performance Office (KPO) dedicated to facilitating the kaizen events that are key to its lean program. The Office has since grown to 150 employees who oversee and assist the company's process-improvement efforts.
- No layoff history: You won't get employees to improve processes if those very improvements result in employees being put out of work. Pella managers early on committed that they would not lay off any full-time employee whose job was eliminated through productivity improvements. Instead, Pella "reinvests" these employees back into the KPO.
- Share the wealth: Similarly, you won't get employee buy-in if all the rewards go to a select few managers and executives. Since 1987, Pella has contributed 25% of pre-tax profit to a profit-sharing plan to be shared by everyone in the company.
- Training: After 10 years, Pella hasn't stopped training employees on lean concepts, and it never will, says Giddings.
- Communication: Similarly, Giddings says you can't communicate enough about how continuous improvement will improve the company's competitiveness.
- Frequent review of progress: Part of the communication process that helps keep everyone working toward continuous improvement is built into the follow-up to each change effort. While many companies conduct performance appraisals once or twice a year, Pella reviews progress on a monthly basis, holding teams and individuals accountable for what they agreed to change, and helping those who've not met their goals to get back on track.
- Track performance: It's important to identify the right metrics and to map the process that's undergoing change, then to document the new metrics and the process after each event. The important metrics in the office, just as on the plant floor, tend to be time and step oriented, so Pella uses the same value-stream mapping and time observation process for both. These processes identify non-value-added steps that can be eliminated, and establish "takt times" for completing processes such as custom pricing, benefits enrollment and financial reporting. It's also important, says Giddings, to choose metrics that suggest how to improve the process.
- Maintain intensity: Pella requires each kaizen event to improve productivity by 25%. Such dramatic goals are necessary, says Giddings, to push the team to really change the process, not just make a few tweaks.
- Get people involved: By definition, lean strategies require that all employees participate in the process change, including those who are usually left out of most change processes. Because hourly employees are usually instrumental in executing the new processes, including them in the change process ensures their commitment.
