A supportive foundation for Lean excellence

Herman Miller, Inc.’s people-centric focus and its focus on Lean manufacturing has helped the company through rough patches and has helped the company's culture.

06/19/2017


A successful organization relies on the Values in action—“doing things that matter to us”—continually inspire the Herman Miller, Inc. organization. The Zeeland, Mich.-based furniture manufacturer, known for the exceptional design and high quality of its office furniture, adopted the Herman Miller Performance System (HMPS)—its own version of the Toyota Production System (TPS) Lean practices—more than 20 years ago, blending this approach with its commitment to creating a better world. Its mindful culture, embracing a collaborative supplier development program and a pledge to share the bounty of Lean learnings with other organizations, is also marked by:

  • Commitment to “we’re in this together” operational excellence and sustainability.
  • Adopting and adapting a flexible performance approach yielding measurable progress.
  • Engaging employees at all levels—and with suppliers, customers and other stakeholders in getting the right things done—and then continuously exploring new improvement options.

Need for a new approach

There’s no simple, straight-line route to operational excellence reflected in Herman Miller’s extended/continuing Lean transformation. Persistence and a willingness to evaluate/adopt new strategies,  sometimes letting go of traditional practices, would be a more apt description.

The company faced several significant challenges in 1995. “We had lead times to our customers of six to eight weeks, worked in big batches and had lots of time to put orders together and keep costs under control,” recalled Matt Long, vice president of continuous improvement. “We were also pursuing a strategy of automation at that time. One of our major customers wanted shorter lead times and lower pricing: a three-day lead time (ours was ten days) and a 30% price reduction.”

Prospects for Herman Miller’s 15-20% margin dimmed, as the company’s leadership evaluated strategies for meeting the key customer’s requirements at a Herman Miller file cabinet manufacturing plant (Integrated Metal Technology, or IMT) in Spring Lake, Michigan. Added to its challenges: Traditional, big batch production didn’t jibe with shifting customer ordering patterns for pedestals (small, under-the-desk filing cabinets). Reduced order quantities meant increased setups/time and cost.

“We had to accept our challenge,” Long said. Confronted by customer demands for faster service and dramatically reduced pricing, the company initially focused on the potential for a lights-out, automated factory approach. Herman Miller leadership later chose an alternative path, suggested by the vice president of finance; they reached out to the Toyota Production System Support Center (TSSC) for guidance and assistance. Hajime Ohba, leader of the TSSC support group, eventually agreed to provide assistance to Herman Miller, sometimes in the form of assignments to identify and eliminate waste. “We were taken on by TSSC as a project company,” Long said. TSSC coaches trained and worked with the leadership of that Herman Miller plant to introduce and implement the concepts and thinking of the Toyota Production System (TPS) techniques for eliminating waste.

“At that time, they didn’t even charge us for that service,” Long said. “For the next several years, they sent coaches to work with us, developing a Lean value stream for a pedestal filing cabinet.”

TSSC’s Ohba and other TSSC coaches assigned Herman Miller various tasks at the plant during the next several years, including:

  • Starting the focus nearest the customer at shipping and assembly, instead of stamping (the front end of the process).
  • Reducing to one assembly line.
  • Decreasing lineside parts inventories.
  • Reconsidering parts container sizes.

Although workers expressed skepticism about the changes at first, positive results began to win over converts. Among the implemented changes: line balancing to the pace of customer demand or take time, supported by decreased parts production quantities; and use of a kanban card to signal the need for parts on the line. Inventory/ racks, floor space, scrap, the number of forklifts and other wastes shrank as Herman Miller employees implemented daily improvements/kaizen in their work areas.

The army of expeditors previously needed to track parts amid the massive number of parts racks, outside trailers and the “black hole” (a space populated by a sea of work-in-process components) were trained for other tasks in the plant. Quality issues that used to emerge at the end of a run disappeared, along with glitches caused by complex welding system breakdowns. Use of a quick-change manifold for paint guns cut time and paint waste. Wait times and inventory shrank at various value stream areas, including stamping, assembly and paint. Over time, the production pace aligned with the pull of customer demand (continuous flow).

Assembly workers, supervisors and others sometimes balked at making Lean changes, including standardization. They expressed concerns ranging from potential layoffs caused by the changes to poor communications about the reasons for change. After listening to these concerns, leadership shifted the focus from implementing Lean tools to listening to the team members and solving problems that created struggles for them such as ergonomic, process or quality issues and trying their ideas for countermeasures to these problems.

Despite performance hiccups, course adjustments, progress plateaus and more questions arising about the need to adopt Lean ways, the Spring Lake evolution continued. Productivity rose. The lead time for the pedestal filing cabinet dropped to four hours. “We also met our cost target and improved our margins and quality, as well as morale in the plant,” said Long. Plans for a new addition to the facility (destined to house excess inventory) were scrapped.

Herman Miller implements lean strategies through their performance system. Courtesy: Herman MillerThe Herman Miller Performance System

Success with the new approach got the attention of Herman Miller corporate staff. By 1999, the president (now CEO Brian Walker) made the decision to extend TPS-inspired Lean strategies (renamed the Herman Miller Performance System, or HMPS) across all production sites. The company describes HMPS as “a system that focuses on understanding and meeting our customers’ needs exactly through the engagement and development of our employees.” Its four philosophies are:

  • Being customer first.
  • People are most important.
  • Kaizen is a way of life.
  • Shop floor focus.

During the next several years, adoption of the Lean-inspired HMPS turned out to be good timing, according to Long. Impacted by market shifts linked with dot.com startups and failures, the company required greater agility in its new product development and production capabilities. “We needed to deepen and spread HMPS,” said Long.

An evaluation of customer feedback in 2002 revealed that Herman Miller needed to share its HMPS learnings more broadly, working with suppliers and dealers. The finding triggered new training and coaching initiatives with these fellow stakeholders, resulting in increased on-time deliveries and improved customer/dealer satisfaction ratings. “So much so that it became a differentiator—when you buy Herman Miller furniture, you’re getting more than product value,” said Long.

Collaborative learning

Herman Miller has consistently honored its “pay it forward” commitment to TSSC: Share Lean practices with other organizations. Herman Miller regularly hosts TSSC workshops and learning visits from numerous companies seeking HMPS/Lean learnings. For example, representatives from USG, a wallboard manufacturer (one year into Lean), were recently introduced to Herman Miller by professor and consultant Jeffrey Liker. “We’ve also developed collaborative learning relationships with companies such as GE Appliances,” said Long. “Their employees might spend anywhere from a day up to six months learning with us on our shop floor. Conversely, we’ve sent people to GE Appliances to learn how they handle Lean product development, and we collaborate with Liberty Mutual and the Lean Enterprise Institute (LEI), so learning goes both ways.” Its collaborative methodology is being extended to business processes within Herman Miller, such as customer care and product services, as well as engineering.


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