When your actions -- or more precisely lack of action -- make a grown man cry, it's not a moment you are likely to forget.
Karl Wadensten hasn't forgotten. The president of privately held VIBCO Vibrators cites the incident as the catapult that launched his Wyoming, R.I.-based manufacturing company on its lean journey more than eight years ago.
The story goes like this: A salesman for a distributorship sells a large construction project on the benefits of purchasing products made by VIBCO, which manufactures electric, pneumatic and hydraulic vibrators for construction and industrial use. The salesman places the order with VIBCO, which provides him with a delivery date. VIBCO misses the delivery date. The manufacturer then misses a second delivery date, which prompts the salesman to call VIBCO on a Friday afternoon, in tears. His reputation and likely his job are on the line, "and here we are not holding up our end," says Wadensten. The construction firm is set to begin pouring concrete the following Monday.
Add to the story VIBCO's typical manufacturing operations work week, which is 40 hours in four-and-a-half days. Thus the plant floor is largely cleared out by the time VIBCO's customer service representative escalates the issue to Wadensten, who has been home sick.
The feel-good ending is that VIBCO shipped out the order on that Friday, after rallying employees to return to the manufacturing facility and push through the order.
Except, of course, it wasn't a feel-good ending. "It's not one of those orders you can celebrate. Yes, we did it," Wadensten says. "[But] we built no bridges with the relationship at this point. We did nothing for the brand of our company. It's sad that we had to get to that point to get something out for somebody."
Time for Self-Reflection
The high-profile incident drove Wadensten to take a good, hard look at his company, and what he saw frustrated him. The VIBCO president describes the mindset of his company back then as typical of U.S. manufacturers. "We were like an average manufacturer. We'd miss some [dates]; we'd make some," he says. While the incident with the crying customer wasn't the norm at his firm, he said it brought home some ugly truths about how good the company really was. And he recognized the need to improve.
Wadensten points out the competitive advantages U.S. manufacturers should bring to U.S. customers -- speed, agility, trust and relationships. Yet what he saw in his firm were unpredictable delivery at times and a lack of stable processes. On the plus side, he says VIBCO made a good product and boasted a dedicated staff, "but we weren't communicating."
That mindset no longer prevails at VIBCO. Indeed, exactly the opposite is true, and Wadensten credits the company's embrace of lean for the change. He describes the lean transformation as more than waste elimination or process improvement (although both are important), but a cultural change as well that has turned the employees into a workforce of problem-solvers. "I have 85 problem-solvers," he says. "They are intuitively fixing things all day long."
It's to the benefit of customers. VIBCO produces 1,300 different products and 6,800 component pieces and can deliver within 48 hours "from scratch," with same-day or next-day delivery on standard products. Helping boost that velocity are lean practices such as quick changeovers. For example, changeovers on lathes that once took 75 to 90 minutes have been reduced to less than 10. Assembly times that took hours have been driven down to four minutes.
Everything is For the Customer
"We're doing everything for the customer because at the end of the day, that's what we're in business for, that's what pays our bills," Wadensten says.
VIBCO's embrace of lean benefits the company as well. Its benefits became especially obvious during the recent recession. Wadensten points out that VIBCO didn't lay off people during the downturn and worked 40-hour weeks. It spent money on marketing and equipment, and grew market share by 16%. Plus, Wadensten says the time saved by eliminating non-value-added tasks freed time to develop new products, pointing out that VIBCO added 13 products and two new patents to its stable in recent years.
"Lean allows you more time to do things that are important to the customer and that they are willing to pay for. Then your company can grow and spend more time on R&D, spend more time on innovating, spend more time on process control, spend more time on material and information flow," he says.
VIBCO President Karl Wadensten (in orange) says the entire workforce embraces lean with the same ferocity he exhibits. Pursuit of those lean principles helped the company gain market share during the economic downturn.
Photo: Vibco Vibrators
Wadensten has become an ardent advocate for lean manufacturing. (The manufacturer even hosts a radio show called "The Lean Nation.") He has advice for manufacturers who suggest they don't have time for lean. Make time, he says, "because the rest of the globe is making time for this, and you are going to get your clock cleaned." Also, he says, don't think you can "dip your toes" into lean, choosing small pieces to incorporate and think you're done. That's flavor-of-the-day thinking, Wadensten observes.
That's not to suggest lean is easy. Some lean tools, such as single-piece flow, are counterintuitive to the batch production taught in engineering or business schools, Wadensten notes. Standard work may be another challenge. For VIBCO, however, the biggest early challenge was the "people" side of lean. Some employees were skeptical and didn't believe their ideas would be heard. And while VIBCO strove to encourage what Wadensten describes as peoples' intuitive desire to share in the improvement process, such collaboration requires that companies gain the trust of their employees -- trust that driving business improvements does not equate to driving away jobs. "Lean is a growth strategy, not a strategy to eliminate people," he says.
More recently, VIBCO has encountered the challenge of sustaining its lean efforts. In June 2010 lead times started stretching out, and a backlog began to develop. The company consulted with other manufacturers that had been pursuing lean journeys over longer periods and gained valuable perspective. Among the learnings: VIBCO's lean journey had driven many point solutions, but an overall corporate strategy was lacking. The infrastructure needed to sustain the gains was missing, in other words. That's where VIBCO is concentrating much of its efforts today. Its backlog has largely disappeared and the company may soon improve on its same-day, next-day mantra.
• IW's Blueprint for Manufacturing Success