The Big Picture: Leadership Insights from the IW Best Plants -- Thomas & Betts Discovers the 'Voice of the Customer'

The Big Picture: Leadership Insights from the IW Best Plants -- Thomas & Betts Discovers the 'Voice of the Customer'

By focusing on what the customer wants, T&B has built strong, mutually beneficial relationships with its suppliers.

As new successes roll in from your lean journey, you must quickly translate internal improvements into external benefits for your customers. To do that you must know what the customer truly needs from your organization. Find the "voice of the customer." Manufacturing must seek more intimate relationships with customers that reduce time, distance and inventory. Responsiveness to real-time customer demand -- "pull" -- is the answer.

Thomas & Betts Corp. has been a designer and manufacturer of electrical components used in industrial, commercial, communications, and utility markets for over 100 years. Within a year of beginning our 2001 lean journey, the Athens, Tenn., operation was seeing very visible improvements. Material was beginning to flow rather than stagnate, open floor space appeared as raw and in-process inventories fell, and service improved as finished inventories dropped. Always looking to the next level, we decided to convert our internal improvements into benefits our customers would appreciate.

Finding the true voice of the customer under layers of sales projections, predictions, prognoses and forecasts was the first hurdle. That path led us to focus on identifying the actual information flow of real-time customer demand (pull). Within that specific informational value stream were many elements of waiting, flow and processing until demands were eventually satisfied. The key was to determine at what process point could the voice of the customer be heard, and then where a best-in-class response should be made.

Thomas & Betts Corp.: IW Best Plants Profile 2005

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The continuing lack of timely and accurate customer demand information will guarantee uneven production flow, poor utilization of labor, materials and assets -- in general, all-around basic waste (muda). It is possible to move to a future state where manufacturing responds directly to customer demand, builds essentially fixed quantities and maintains low inventories with over 99% of products in-stock. Customer-demand pull does exactly that.

It may not be impossible, but it is unlikely to transform a forecast-driven enterprise into a world-class, customer-focused organization. Some may think that demand forecasts can be changed or modified to reflect real-time customer demand. Not likely! At some point you must make a conscious decision to get your manufacturing operations house in order. Manufacturing operations must become the strategic weapon in the transition to "pull." The factory floor is where you can make the "best-in-class" customer response. This is the time when you truly buy in to continuous improvement and say, "Our lean journey starts now!" Get into your lean toolbox, dig out the tools and begin applying them.

2009 IW Best Plants Conference

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The results of your efforts will soon begin to show in improved service as you produce greater varieties of products in each loop cycle. Inventories of raw, work-in-process and finished goods will begin to drop. Cash flow from your operations will improve rapidly as inventory turns increase. You are now in a dynamic world where lead times and process cycle times shrink, operations and work content are continuously improved, and inventories don't just turn -- they spin. Like us, I am sure you have customers who are willing to accept world-class elements of service in consistently on-time delivery, unmatched short lead time, responsive order processing, flexible manufacturing processes and (nearly) perfect quality.

Our organization is now moving into the eighth year of our lean journey. The successful transition from sales/production forecasts to real-time customer-demand pull, as you have probably guessed by now, resulted far more from getting manufacturing's house in order than from changing forecasting paradigms. Today, we believe that we are both a better supplier to our customers and a better customer to our suppliers. By truly focusing on what the customer wanted and expected -- "the Golden Rule" -- we have built strong, mutually beneficial relationships with our suppliers.

We have progressed from being regarded negatively, or at best being ignored, by our customers to receiving multiple Supplier-of-the-Year awards over the past four years from every segment of our customer base. Our transformation has been recognized and applauded by our industry's trade publications as well.

The Athens Facility has consistently served our customers with over 98% in-stock levels on over 2,000 SKU's while shipping over 1.1 million pieces daily. We no longer track items as A's, B's, or C's -- they are all A's in the customer's eyes. For our incoming material, over 97% has no receiving inspection and over 98% is now on "supplier pull" with 99% on-time delivery.

Over the course of our Lean Journey, we have made significant productivity gains while growing our sales. Our journey continues as we constantly find new ways to reduce waste and add value to our customers. The spiral of this cycle is not as common as it could be, but it is predictable.

Herb Bradshaw is plant manager with Thomas & Betts Corp.'s Athens, Tenn., facility, a winner of the IW Best Plants Award in 2005.

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