World Class vs. Drive-By Lean

Mark Volesky – Impact Dakota

According to Google there are 129,864,880 books published in all of modern history. With just a little research you may get the impression that at least half of them are about Lean. A lot of them are actually pretty good, covering everything from the high-level, overarching principles, e.g., Lean Thinking, by Womack and Jones, to deep dives into specific tools and principles, such as Shigeo Shingo’s The SMED System. Of course, we can add in all of the lean articles, forums, blogs, courses, etc., which together Google probably wouldn’t be able to count.

So, with all of those resources available, why does Dr. Jeffrey Liker, Professor of Industrial and Operations Engineering at the University of Michigan and author of the best seller, The Toyota Way, state that there are about one percent of American manufacturers that have achieved “World Class” status. Based on the most recent census, there are roughly 300,000 manufacturers in this country. So even at that meager one percent, roughly 3000 manufacturers have managed to achieve world class status. That implies good news and bad news which will be discussed later.

Lean is defined as a systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection. The key term here is ‘systematic’. A system is defined as a group of related parts that move or work together. The concept of the systematic approach to Lean is the factor that delineates world class organizations from the ‘me too’ organizations. Companies engaging in World Class performance strategies focus on improving operations, strive to eliminate waste and create lean organizations, not just manufacturing. This results in higher productivity and bottom-line results. But these companies also focus on speed of total throughput from order capture through delivery, setting new standards for delivery without the heavy dependence on inventory. Sequential methods of performing work are being replaced with aligned and concurrent methods to compress time, and functional divisions of duties are being replaced by team-driven activities. And they manage to sustain this level of performance year after year. Essentially, it is their business DNA. What lean is not is a tool-based program running intermittently (time permitting) in parallel with their primary mission.

Sadly, the latter is more the rule than the exception. Experience with manufacturers in this region would indicate that most have had a brush with lean to some degree, from passionate and diligent to experimental and dabbling—what we refer to as ‘drive-by lean’. Some vetting of, and experimentation with lean thinking within an organization should be expected before making the commitment—lean is a major change in the way a company conducts business. In his book ‘Gemba Walks’, Jim Womack noted that the lean transformation, when it is applied to all elements of an enterprise, is a multi-dimensional undertaking of great magnitude. Hence, “it’s understandable that in many organizations, lean tools came to the foreground. The attraction of tools is that they can be employed at many points within an organization, often by staff improvement teams or external consultants. Even better, they can be applied in isolation without tackling the difficult task of changing the organization and its fundamental approach to management”. Don’t get me wrong, the tools are a great and necessary place to start your journey. And later, when well into the transformation, the tools are integral to strategic deployment of the company’s vision. Unfortunately, that is where we see it end, with the tools. Every company that has experienced success with the tools needs to expand the new business model into the era of lean thinking and management. This is sound science, not the flavor of the month.

This transformation takes some time but the company will be realizing the benefits of the transformation from day one. As this is now the enterprise business model who else should know this better than leadership? And who better to drive it throughout the enterprise? The successful lean transformation is driven from the top down with execution from the bottom up. The prevailing model is delegating to someone in middle management to “make it happen and keep me in the loop”, i.e., implementation from the middle outward—not a successful or sustainable strategy. Driving it throughout the enterprise requires active, visible and sincere involvement by all levels of leadership. It’s now the age of “Go-and-See”, which translates to leading and managing in real time. After all, this is a significant transformation, and if the employees don’t perceive the passion from leadership, why should they care?

We are all familiar with the catch phrase: Our people are our most important asset. Translation: We have a lot of good people who are working longer hours and putting forth extraordinary efforts to work around problems to meet customer requirements. This brings up two questions: 1) is that a sustainable strategy, and 2) how’s your turnover? In the lean context it means that you have cultivated a population of everyday problem solvers, where just pointing out a problem is celebrated. You can’t solve a problem if you can’t see it, and there is a huge difference between solving a problem and working around it.

To get the company on track to true lean transformation and the resulting world class performance, leadership must immerse themselves in learning about lean and their unique and pivotal roles in driving the transformation. They must look beyond the application of lean tools on the shop floor (lean manufacturing) and deploy their visions across the enterprise. Few, if any, functions or persons are exempt. Pascal Dennis, in his best seller, Lean Production Simplified, notes that HR is central to successful lean implementation because their output is people. A negative example would be spending project after project on the shop floor trying to reduce assembly time, but if the product engineers designed a lot of labor into the product then there are few process improvements that will help meet your goal.

OK, this may be sounding a bit prescriptive, so let’s get back to the good news, bad news. But first, let me provide a quote, or more to the point, an inconvenient truth, from Bill Waddell, author of Rebirth of American Industry. In a recent blog Bill stated that competitive advantage never comes from anything physical—anything that can be seen, touched or bought—stuff like robots, factories, or computers. The problem with that stuff is that if you can buy it or build it, so can everyone else. He finishes with, “You’ll never get ahead with anything that everyone can do”.

Now we can add the addendum to this statement, and really the whole point of this article: Deployment of the lean tools is something everyone can do, and most are, and you’ll never gain competitive advantage by stopping there. That’s the bad news. If it was easy everyone would be doing it, right? But the good news is that there are only about one percent of American manufacturers that have gone beyond the tools and are achieving world class performance. That implies that there is a huge opportunity to join this elite group of companies that have the competitive advantage in their respective markets and industries by creating the appropriate business model and supporting culture. As Bill further states, “Those things are like finger prints – no two companies are the same, and the company with the superior management mojo wins”. Does the organization have this unique systematic approach that aligns efforts in all areas of the company to supporting the overall vision? Does it have the culture of problem solving and continuous improvement to sustain it? Are you keeping score with the proper key performance indicators, the dashboards, to indicate in real time not only performance against the vision and goals but to drive the right behaviors, again throughout the organization.

You’ll notice that I didn’t get into the how. Refer to the beginning of this article to remind you that there are plenty of resources with which to start.

BHSU adds Asian partnerships

Representatives from Black Hills State University recently visited six universities in South Korea and three universities in China to foster BHSU’s new and existing international collaborations and encourage leaders to direct students to BHSU. Each visit resulted in establishing new or sustaining existing memoranda of understanding (MOU) agreements, which provide the framework for collaboration, student learning opportunities and international relations between the universities. According to BHSU, a newly signed MOU with Dongguk University in Seoul, South Korea, was especially meaningful because Dongguk and BHSU are both ranked in the top 5 percent of business schools in the world by the Association to Advance Collegiate Schools of Business.

Gray Plant Mooty acquires Sandin Law

Gray Plant Mooty, a 170-attorney law firm based in Minneapolis, has merged with Sandin Law, a Fargo-based boutique estate and business planning law firm. Led by Toni Sandin, the five-member firm is expected to add depth to Gray Plant Mooty’s trust, estates and charitable planning group, according to the firm.

Gray Plant Mooty opened an office in Fargo in December. The firm has served clients in the area for decades.

USDA backs new Pine Ridge community center

The USDA recently announced it will provide $1.97 million to Thunder Valley Community Development Corp. to build a community center on the Pine Ridge Indian Reservation in South Dakota. The community center will be part of the Regenerative Community, a planned development which will be managed by Thunder Valley CDC and will eventually include housing, an aquaponics greenhouse, a grocery store, pow-

Financing for the project was delivered through USDA Rural Development and was comprised of a $489,000 Rural Housing Site loan, a $300,000 Self-Help Housing Technical Assistance grant, and a water and waste disposal loan and grant package totaling more than $1 million.

Paul Bunyan’s GigaZone earns national award

Bemidji, Minn.-based Paul Bunyan Communications recently received the Most

Innovative Gigabit Broadband Service award from Light Reading, a national provider of analysis for the telecommunications industry. The award, given through Light Reading’s Leading Lights awards program, recognizes the communications provider that has launched the most innovative gigabit broadband service during the past year. Last fall, Paul Bunyan launched a project known as the GigaZone which will ultimately provide gigabit Internet service to customers throughout a 5,000-square-mile area of northern Minnesota, making it one of the largest rural gigabit networks in the U.S.

Western State Bank named top performer

West Fargo-based Western State Bank has been named a top performer for 2014 by the Independent Community Bankers of America. The top 25 banks were identified through analysis of earnings data in six asset-size categories. Banks in each category are then measured by their return on average assets and return on average equity ratios for the year. Western State Bank ranked 17th and 14th, respectively, on the list of banks with assets in the $500 million to $1 billion category.

Choice Financial acquires Northland Financial

Choice Financial will acquire Northland Financial, making it the sixth largest community banking organization by asset size in North Dakota. When the acquisition is complete, Choice Financial will have $1.15 billion in assets and 19 locations in North Dakota. The transaction is expected to be completed by the third quarter.

Shutter Pilots, other ND companies get drone exemptions

Shutter Pilots, a North Dakota-based aerial imaging company founded in 2014 by Mike Mabin, Ed Sargeant and Alexander Mabin, has been granted a Federal Aviation Administration exemption to operate drones for the use of aerial imaging and computer animation. The exemption allows the company to operate the DJI Phantom 2 Vision+ and DJI Inspire 1 drones at altitudes of 400 feet and below. It was also the first exemption in the U.S. to outline a mission of using the capture footage to provide 2D and 3D services for use by various industries, according to the company. The company has partnered with Bismarck-based marketing and communications firm Agency MABU to provide additional digital and 3D animation services.

Only about 300 unmanned aerial systems companies nationwide have received FAA exemptions to date. Other North Dakota companies that have been granted exemptions include Grand Forks-based SkySkopes and Falkirk Mining Co.

Local design firms ranked among nation’s best

Bartlett & West and JLG Architects have been ranked among the nation’s top 500 design firms by Engineering News-Record.

Click Rain expands to video

Sioux Falls, S.D.-based digital marketing firm Click Rain has acquired Sioux Center, Iowa-based video production company Paragon Videography. Founded in 2007, Paragon has worked with numerous local and national clients. The addition of the company will allow Click Rain to produce online-exclusive video content for clients intended for platforms including Vine, Instagram and YouTube, according to Click Rain.

Topeka, Kan.-based Bartlett & West was ranked as the 169th largest firm in the country, based on revenue dollar volume for 2014. The firm has 14 offices in 10 states, including Bismarck, N.D., and Sioux Falls, S.D.

JLG ranked 386th and was the only architecture firm in the Dakotas and one of three architecture-only firms in Minnesota to be named to the list.

Valley Express adds export/import service

Fargo-based freight management company Valley Express Inc., along with its international freight division, Valley Worldwide Logistics Solutions, has added Less than Container Load (LCL) shipments to its list of services for European and Asian trade lanes. The service allows customers to bypass the process of trucking small shipments of cargo to larger cities to be included in a shipping container, according to the company. Felix Asemota, president of global markets for Valley Worldwide, said in a statement the company was able to provide the service due to an increase in volume.

Basin Electric receives employer of year award

Basin Electric Cooperative received the International Right of Way Association’s 2014 employer of the year award for right-of-way staffs with fewer than 20 people during the association’s annual conference held June 15 in San Diego, Calif.

Basic Electric has 10 right-of-way staff members. Mike Murray, property and right-ofway manager, and Matt Greek, senior vice president of engineering and construction, accepted the award for Basin Electric. The cooperative also received the award in 2005.

Daugaard meets 2015 Dakota Rising class

In recognition of the important role entrepreneurship plays in growing the state’s economy, S.D. Gov. Dennis Daugaard met with applicants for the Dakota Rising Fellowship at the June 1 selection event in Pierre, S.D. Dakota Rising, Dakota Resources’ entrepreneur development program, cultivates rural entrepreneurs dedicated to growing themselves, their businesses and the greater community, according to Dakota Resources.

The 2015 Dakota Rising Entrepreneur Fellows are: Cam Schock of Climate Control and David Malsam of CompQuest Technology, representing the Aberdeen region, which includes all of Brown County; Leslie Bellet of Twin City Hardware and Dr. Bob McIntosh of HealthSource, representing Lawrence County; Barbra Pechous of Tacoma Publications and Cheryl Swatek of The Cake Lady, representing Southern Charles Mix County; John Pfeifer of VoWac Publishing, representing the Faulkton Area, and Chad Gollnick of Piedmont-based Iron Outfitters, who was sponsored by a Dakota Rising Fellow alum.

More information about Dakota Rising is available at dakotaresources.org/dakota-rising.

1Q ND sales better than expected

North Dakota’s taxable sales and purchases for the first quarter of 2015 were approximately $5.8 billion, up more than 2 percent over the same time period one year ago. Tax Commissioner Ryan Rauschenberger said the increase was not expected, considering the recent decline in oil prices, and is a good sign for the state’s economy. The state’s cities with the highest percent increases for 1Q 2015 compared to 1Q 2014 were Walhalla, Linton, Cavalier, Larimore and Minot.

Stantec adds to Fargo team

Russell Landphere has joined Stantec in Fargo as a project manager and engineer-in-training. He has experience in transportation and water infrastructure planning and design and has worked throughout North Dakota for the past 20 years, designing infrastructure, facilities, pipelines and rail projects. He holds a bachelor’s degree in civil engineering from North Dakota State University.

Schloss named top young attorney

Brooke Schloss, an attorney at Swier Law Firm, has been named a “Top 10 Attorney Under the Age of 40” by the National Academy of Family Law Attorneys. Schloss leads Swier’s family law practice group and focuses her practice on areas including divorce, child custody, elder law and adoptions. She is the author of two books on the topic of divorce law and serves on the South Dakota Bar Association’s family law committee.

Tastefully Simple names Dahl president

Nancy Dahl has been named president and chief operating officer of Alexandria, Minn.-based Tastefully Simple Inc. Founder Jill Blashack Strahan will continue as CEO and will partner with Dahl to optimize the company’s strategic direction.

Dahl previously served as president and COO for Minneapolis-based Lifetouch Portrait Studios and Lifetouch National School Studios. She is an alumna of Gustavus Adolphus College, University of St. Thomas and the University of Minnesota Carlson School of Management’s executive program.

Meehl earns health care design certification

Joshua Meehl, a mechanical engineer for Design Tree Engineering, has earned the Healthcare Facility Design Professional Certification from ASHRAE, a technical society representing building system design and industrial processes professionals. The certification program, which was developed in collaboration with the American Hospital Association’s American Society for Healthcare Engineering, verifies an individual’s well-rounded understanding and knowledge of principles, best practices and industry standards involved in HVAC&R design for health care facilities. According to Design Tree, only seven mechanical engineers in Minnesota hold the HFDP certification.

Vantage Point Solutions hires Essig, Lee

Vantage Point Solutions has hired Pat Essig as a credit review consultant and Michele Lee as a risk and regulatory compliance manager.

Essig has 37 years of banking experience and has expertise in agricultural and commercial credit analysis, sales coaching, credit review and portfolio due diligence and loan workouts. He holds various leadership positions for organizations in the Mitchell, S.D., community.

Lee has 17 years of experience compliance management and has extensive experience training staff on regulatory changes. She is a Chamber of Commerce ambassador and a graduate of Leadership Watertown.

Aberson named Sanford Health Foundation president

Micah Aberson has been named president of the Sanford Health Foundation. In this role, he will oversee all fundraising, management of endowment funds and special programs. He will also serve on Sanford Health’s executive team.

Before joining Sanford, Aberson most recently served as vice president of client services and business development at advertising and marketing agency Lawrence & Schiller, where he had worked since 2003. He is a graduate of Augustana College and holds a master’s degree from the University of Sioux Falls.

Starion Financial adds to management committee, promotes 2

Marc Rasmussen, credit administration, vice president, has joined Starion Financial’s management committee. Rasmussen joined the bank in 2013. He holds a bachelor’s degree in business administration from the University of South Dakota and is a graduate of the Pacific Coast Banking School and the Mortgage Bankers Association School of Mortgage Banking.

Cody Schoonover has been promoted to investment advisor. He holds a bachelor’s degree in finance from the University of Mary and has served in the North Dakota Army National Guard for seven years.

Doug Zinke has been promoted to business banking officer, vice president. He has nearly 10 years of banking experience and has worked at Starion Financial since 2011. He holds a bachelor’s degree and master’s degree in business administration from the University of Mary.

Barnesville utilities manager receives national award

Guy Swenson, telephone, electric and cable manager at Barnseville (Minn.) Municipal Utilities recently received an American Public Power Association Larry Hobart Seven Hats Award at the association’s national conference. The award is given in recognition of managers of small utilities, serving fewer than 2,500 meters, who have small staffs and must assume multiple roles. Swenson is one of eight people who received this year’s award.

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