Four tiers of growth in Lean journey

Manufacturer builds daily management into continuous improvement process.


Show floor at the 2014 Association for Manufacturing Excellence conference in Jacksonville, Fla. Courtesy: Bob Vavra, Plant Engineering.Even after almost two decades on a journey to build a Lean manufacturing operation, Seattle area-based Terex Aerial Work Platform is still learning about how to turn the knowledge they’ve gained into operational improvements.

That was the message from Dan Munko, the senior director of operations for Terex Aerial WorkPlatforms, at the 2014 Association for Manufacturing Excellence conference in Jacksonville, Fla. Munko noted in his session that a daily management system is vital to turning Lean-generated knowledge into continuous improvement.

"If you’re trying to get a Lean enterprise, what are you trying to do? You’re trying to get just what you need when you need it, and all the processes are connected," Munko said. "What happens when material is not there, or when someone calls in sick? Then we’re running around fighting fires. Lean is designed to make problems visible. But we have to be really, really good at fixing problems, and that’s where daily management comes in."

By instituting a four-tier process to identify, discuss and correct plant-floor issues, Terex put its focus not just on the problems, but on how those problems and solutions aligned with the larger company plan. The four tiers allowed issues to be identified and correct at the team level before escalating up the process.

But it required a change in style as much as in substance. "We have to lead differently. I can’t lead the same way I’ve been leading," Munko said. "We’ve got to commit to ongoing training and coaching."

It also started by making sure all manufacturing team members were aligned with the five core metrics at Terex: Safety, Quality, Delivery, Cost and Morale.

In Tier 1, a meeting at the start of each shift with team members was held to review issues based on daily metrics. "The idea is to focus on abnormalities. We have a tendency to talk about everything that’s going on, to talk about all the good things we did," Munko said. "When running a production system, only look at things that are abnormal. It’s OK to put red on the board. That’s an opportunity to get better. If we’re not getting better, we’re going backwards."

In Tier 2, a meeting is held 30 minutes after the start of the shift to look at monthly metrics, and to look at that data against four benchmarks:

  • Identify abnormality
  • Understand problem
  • Assign action
  • Check status of action

Munko said the Tier 3 efforts involved the value stream manager for Lean who would bring the disparate teams (safety, quality, engineering, etc.) together to  solve continuing issues and to align the teams on that problem-solving mission. He said the goal was to visualize gaps in the system, drive team problem-solving and to improve the overall business. While the first two Tiers were involved with singular processes, Tier 3 was the first place where the overall business goals were being addressed in the problem-solving process.

Tier 4 was a weekly meeting that involved plant and operations management. "This is something we added to the Tier 4 meeting. We need to make sure we are working to plan and working to amend our improvement plan," Munko said. "I’ve got to continually check, and to imbed that check into my management system."

Besides the four action areas that are part of Tier 2, a fifth is added to check the actions against the overall business plan. "It involves a deeper dive into plan vs. actual," Munko said. "We’re looking for leadership behavior change. We’re trying to focus on the process. We’re driving compliance with the process."

Continuous improvement, Munko noted, is not just an issue of training and coaching, but of making that training produce measurable results. "We can’t just do training in a conference room and say we’re good. We have to continue training on the shop floor," Munko said. "We’ve got to get out of meetings and get out on the shop floor. We’re going to designate time for meetings, but they’ve got to me more focused."

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