Shanghai surprise: lean efforts gain an unusual champion in human resources.

MANY COMPANIES BASED IN CHINA are governed by a strong, group-motivated work ethic. In other words, an individual's success and fulfillment depends on the entire team's work measurement. With respect to group dynamics and goals, it's customary for some workers to remain at the office through the night or seven days a week until a desired outcome is reached. Shop floor environments with human resources departments tend to lead the way in lean efforts because of their training in communications, improvement planning, performance appraisal, safety, and organizational systems.

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A prominent pump manufacturing plant in Shanghai, China, was an old company with a history of more than 50 years. After an American corporation acquired it for manufacturing vacuum pumps and related accessories, the plant navigated workers through tremendous process changes.

Before its lean journey began, the company teetered on the threat of closure because of ineffective organization, lack of staff cooperation, disproportional waste, and a lack of visual control and standard work ethics. Top management realized the importance of lean manufacturing and eventually committed to a program that was codified by the human resources department.

Often taking a back seat in modern conversations about lean, human resources can play an important role during lean transformation and implementation. It should be understood that lean production or lean policy is not only about 5S or eliminating wastes but also about people's behavior, human culture, teamwork, leadership, and executive force. At the manufacturing plant, line workers, executives, and the logistics department adopted and advanced lean principles through a carefully created plan by human resources.

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According to Jamie Flinchbaugh, founder and partner of the Lean Learning Center, human resources can help accelerate a successful lean transformation in the following areas:

* Development of teams as a supporting structure of lean

* Communication among members, particularly across organizational barriers

* Clarification of everyone's role and responsibilities in lean transformation

* Acknowledgement and celebration of successes toward lean transformation

"There are two facets to the relationship between lean and HR. First, it is self-evident that the HR function--just like any other department in a company--needs to apply lean practices and principles toward process improvement in its own work," said Flinchbaugh. "Second, the HR function, by virtue of its interactions with virtually every part of a company, is actually an ideal position to be a powerful ally in lean transformation, if lean leaders make the effort to enlist its aid."

Persuasive measures

When the plant started the lean transformation, it didn't approach human resources to get involved. At first, the responsible person for plant lean implementation was busy every minute dealing with trivial details. For example, he would spend 10 minutes drilling a hole or looking for a screw. He didn't have time to sit down to think about process improvement, layout configuration, or lofty goals toward faster production. He didn't thoroughly benchmark or issue team meetings or memos to ask for input. In essence, he was the designated point person but didn't have much support from others.

Another problem is that at the beginning almost every operator at the plant lacked exposure to lean thinking and manufacturing. What is even worse is that there were no full-time assistants or outside consultants to get things moving in the appropriate direction. I cringe at the typical scenario: One operator learned something about 5S on the first day yet the second day, switched on his former, outdated drilling machine, and then another operator from the cleaning room learned kaizen. Clearly there needed to be a succinct learning process in place before the learning started. Workers realized that hours were being wasted but too much time passed before approaching the human resources director.

Eager to help, she showed great interest in taking part in the lean transformation and launching an initial workshop for everyone to participate in. Then the lean team was established and a leader was appointed. Basic training and leadership workshops followed with some operators from the low-key processes being pulled out to fulfill permanent lean positions that gave them greater responsibilities and ownership of brand new tasks. The spirit of the company shifted immediately with these simple changes. This spirit instilled a willingness to work harder and in a different manner when required.

Staff then learned about the organizational capability and culture of the company. Before discussion of lean, these workers had assumed positions without being informed of their company's basic principles and how they wanted to be perceived by the public. Should they be a low-profile multinational manufacturer or expand and serve the public in some way such as community outreach to create a new image (after the takeover)? Should employees be cross-trained in various departments? These were all concerns that human resources helped to answer.

Organizational capability is an enterprise's ability to manage people and products in an efficient way to gain a competitive advantage. Gerhardt Schulmeyer, president of the North American branch of ABB, a technology-based provider of power and automation products, said that it is not the physical facilities but the organizational capability that will differentiate success from failure of the enterprise. Organizational capability focuses on leadership, cooperation, shared mindset, and readiness for change and improvement.

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Creating an effective team is a practical way to build organizational capability. Since lean production aims to create more value-added products for customers with less waste to win the market through cooperation between organizations within the company, a team-oriented and flexible organization will be more helpful than the vertically integrated organization. Uniform integration involves staff with various experiences and different core competences to focus on one lean project in a certain period; therefore, it's necessary to establish a lean team in which each member feels empowered to think and act as a leader.

Group cohesion will provide better coordination of the project tasks and rotate staff between the project team and the departments. For example, suppose the sales department is excellent at getting orders from customers, but the manufacturing department cannot build the products with satisfactory quality due to bad workshop management, or worse, the logistics department cannot deliver the products to the customer on time. What is the end result? Most likely one less customer!

At the plant, human resources maximized organizational capability by assigning duties and deadlines to each employee. While one employee determined financial capability, another took charge of marketing capability. They identified people who could be "culture carriers" to build the transformation teams. Seniority and enthusiasm played a role in who became leaders.

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Urgent call

Resistance to change, even when on the path to improvement, requires bold techniques to motivate staff as it did at the pump manufacturing plant. Motivate the people with leadership to direct the team, then establish a sense of company crisis to convince the staff that transformation is the only way for survival in the fierce market competition. Create a scene in which the house is burning but the people living in it are turning their blind eye to it. Witness your human resources department arouse them from sleep with their dependable communication, motivational, and safety skills.

In truth, our facility was not physically burning down, but metaphorically speaking, the company slipped way too close to the flames. The human resources department prepared a package of materials including market share, customer complaints, and strong points and weak points of our company and competitors with the help of sales and marketing personnel. They selected pertinent and practical case studies to be presented in rich media that caught our attention. The employees were impressed and inspired by a usually behind-the-scenes department caring enough to provide a structure for lean.

With the aid of human resources, we reshaped the warehouse department to include the logistics control department. Supported by warehouse workers, logistics had the following main tasks:

* Motivate the external supplier to deliver quality parts just in time.

* Plan to order parts based on the minimum amount allowed on the production line in-progress, on the shelves, in the packaging area, and in delivery.

* Command the internal supplier to deliver the machined parts directly to the assembly spot from where operators can easily get them with the help of a kanban system.

* Fill in for warehouse personnel when necessary.

At the same time, rules were set for operators in the machine workshop. They bear the responsibility of assuring the quality of the parts they processed with the guidance of quality inspectors. They also ensure that defect-proof parts flow to the next station or to the assembly. Their performance on quality control has much to do with their salary and bonus.