Transforming to a Lean Business Model

The current business environment might be titled as the “Age of Disruption.” The on-demand customer expectations, accelerating technology, changing regulations and financial demands have increased pressure on companies to continuously transform or become history. Consequently, company leaders working to transform their companies do so with a...

The current business environment might be titled as the “Age of Disruption.” The on-demand customer expectations, accelerating technology, changing regulations and financial demands have increased pressure on companies to continuously transform or become history. Consequently, company leaders working to transform their companies do so with a constantly shifting play book. A "lean led" business transformation can help address these pressures by providing rapid improvement in cost structures, customer service and risk. Developing a lean culture in a changing environment is not an easy task.

Recently, I had a conversation with Todd Clyde, COO and Rick Sunamoto, vice president of manufacturing at HM Electronics, Inc., (HME), in their brand-new 148,000 sq. ft. headquarters and manufacturing facility to learn how the organization is progressing in their lean journey, which began in 2003. Specifically, I wanted to learn how they are adopting lean principles across the company to use lean as a strategic guide to their business.

Those of us that have been to a quick-service restaurant, live performances, or sports events, have probably used or seen products from HME. Founded in 1971, HME with over 750 employees, is a diverse group of companies that designs, manufactures, sells and services specialized communications, audio and software solutions for a variety of niche markets. The company offers its products through a network of authorized distributors, dealers, direct sales force, and service agents in over 100 countries around the world.

Clyde describes HME as a technology company continually enhancing and developing its lean culture throughout their enterprise organization. He says HME's history of success is built on a culture that prides itself on high standards of performance. Connecting with customers to understand their business and simplify their complex communication needs is an obsession. This has extended into the sales organization with key goals and driver metrics such as sales calls made, lead generation, and follow-up.

HME conducts business across multiple delivery points through an extensive network of authorized distributors, dealers and service agents. Operating and competing in multiple market segments with large multinational companies, HME has developed a strong market position by focusing on being dependable. They stand by what they say they will do. Their lean efforts have provided them the ability to grow to their current scale by redirecting the energy and expense of waste to create capacity for profitable growth.

In the last couple of years, HME has put significant attention into their product development process velocity. Lean has reached an inflection point for the company culture in product development, and the results have been impressive. Time-to-market has shrunk to the point that HME is able to influence the application of technology and communications systems applications for a wide range of customers.

HME, by the way, is opening their doors for a tour at the AME Conference in October. A tour of HME will offer attendees the opportunity to learn how the organization is progressing in their lean journey across the company and building strategy deployment into their business planning cycle. Walking the production floor and the office, visitors will see examples of materials control, flow, gemba, idea boards, 7S and visual factory. They will also see a printed circuit assembly operation supported by real-time systems to provide effective control.

HME is engaging the organization to continue to fuel growth and profitability with a focus on maintaining a "small business" feel that builds and facilitates teamwork. They continue to strive for a customer-driven culture that thrives on teamwork, innovation, and recognition. They state that HME’s cultural diversity and worldwide collaboration enables them to deliver products and services that fulfill the different needs of their customers.

When lean becomes a strategic business model, organizations become customer-value focused. Getting there is not necessarily a straight path but also doesn’t need to be a voyage of discovery. Map your transformation goals to business goals then define the critical few KPI’s to connect them. HME illustrates that transformation builds on business strengths, experiments with new ideas, tests assumptions and makes adjustments based on results. HME’s approach has allowed them to grow rapidly and develop the capability of using lean as a foundation to strengthen the business for growth. Ask yourself, “Are your lean initiatives accelerating business results?” Let the answer direct your transformation path.

Ken Rolfes, a long time AME volunteer, is a management advisor, past corporate officer, senior operations executive and Shingo award winning author. He is President of KDR Associates, a Director of the Association for Manufacturing Excellence (AME) and leads the AME San Diego Business Improvement Consortium. For more information about the AME San Diego 2018, visit http://www.ame.org/sandiego

Source: www.ame.org