Scanlon April 2004 E-zine

Greetings!

This issue of the Scanlon E-zine contains articles about how Scanlon Leadership Network members are becoming more effective using our Lean Sim Machine and our Hoshin Quick Start Programs. These programs are helping many organizations become "Lean." In the "As I See It" column members tell how the Scanlon Conference has helped them become better leaders.

In the next E-Zine we will share with you information about a very exciting culture study the Scanlon Foundation will be conducting with the Hay Consulting Group and our plans for our new electronic training process called "Moodle."

Westan Uses Lean Sim for Culture Change



Scanlon member Westan, a 137-year-old employee-owned tannery in Westfield, Pennsylvania, has successfully used the Network's Lean Sim machine as a culture change tool. Ray Terwilliger, an approved Scanlon consultant and Acting CEO of the company says, "We used it to inform the workforce of the realities necessary to run a business successfully. It was an educational approach to behavior modification to help people fully understand the business, their role in this change and what they could do specifically to make it better."

Westan started using the Lean Sim in January 2003 and since then all 200 employees have been through the process. "This had the greatest positive effect," Ray says. "Now we are only using it quarterly or semi-annually primarily for new employees. We have saved an estimated $2 million over 18 months as a result of the Lean Sim training and subsequent benefits. The Lean Sim initiative was the catalyst and catapult to launch a series of other employee activities such as quality and continuous improvement.

"We have made progress in all areas," Terwilliger adds. "We have reduced costs, increased quality, improved on-time delivery and have gotten a large percentage of our workforce involved and participating in these initiatives. Our employee teams have demonstrated their ability to make very good decisions regarding raw materials, staffing, production and delivery schedules and a wide range of other operational issues. The more teams learned to cooperate and work together, more individuals made commitments to make their own jobs better and the more significant the changes to the organization."

Using the Lean Sim machine was a new experience for Westan employees but it "was the one thing that enabled large groups of employees to buy into the entire improvement process," Ray says, "because they could see it, touch it, and use it on a practical basis. When they could actually apply the principles they immediately saw their value. It was a worthwhile adult learning experience; they had fun and understood the core principles that drive successful businesses.

"It was transformational. The breakthrough was nothing short of fantastic. None of this would have been possible without the Network's commitment to the Lean Sim process and the machine we leased from them. We believe that individual improvement always precedes organizational change and the Lean Sim helped us achieve this. It was absolutely crucial to this effort," Ray emphasizes.

At the end of every training session Westan conducted a debriefing and shared observations with the teams about the actions noted when they were doing the exercises. "We commended them for their planning, communications, teamwork and cooperation to give them positive reinforcement," Terwilliger adds. "This was extremely well received. Employees who did not understand what was going on now do and better participants have become leaders in various success teams for cost reduction, quality improvement, employee participation and on-time delivery."

Hoshin - A Direction Needle, A Powerful Scanlon Network Tool



The Japanese call it Hoshin. Loosely translated it means a compass or a direction needle. Myron Marsh, the President/CEO of Thomson-Shore book manufacturer, calls this unique management tool, "the best process I have ever seen to break down the overall strategy of an organization so that everyone can see its parts and participate in achieving them. It is a great tool to get organizations aligned. That's why it is so widely used especially among Scanlon organizations.

"During the past three years since I have been here, my task has been to articulate reality to the organization and involve everyone in what our strategy is, how we are going to implement it to achieve our goals, and report our progress to everyone in the organization," Marsh explains.

"Hoshin lets us go step by step from what we are to what we should be and how to get there. It enables us to break our overall goals into small pieces - targeted actions - that we can measure, show progress, and adjust," says Myron. For Thomson-Shore it was a new process three years ago. Now it is a regular business planning tool. In October of each year when the company builds its annual budget it builds its Hoshin plan so the two match up, what it plans to gain in revenue and what it plans to spend to achieve those gains.

This year after the firm created a plan at the department level it held meetings and presented a summary of its strategy to all three shifts. They had done this in the past and this let everyone see what had changed over the past two years in the market place, critical issues, competitive strengths and weaknesses and how their Hoshin plan's targeted actions tied into the summary.

"We held breakout sessions of small groups of employees to review targeted actions to see if what we were doing was the right job for T-S and if we were doing the right things to achieve our goals," Marsh says. "We incorporated the feedback into our planning and communications process to achieve targeted actions.

"We just reviewed our first quarter results and reported on targeted actions and how they measured against the strategic summary. We repeat this process every quarter, communicating results and adjustments to our plan. Everyone participates in activities and goals to achieve targeted actions and they know they must make progress if we are going to attain our overall strategy over the year," adds Myron. (Editor's Note: Members may download the Hoshin Quick Start 2000 three-hour training program free of charge from the Scanlon Website.)

MSAE to Sell Hoshin to Its Members



Beginning this summer, the Michigan Society of Association Executives will be offering the Scanlon Hoshin tool for sale to its 950 members. The Society is a not-for-profit membership organization that serves similar organizations in a variety of managerial and staff specialist roles and focuses its resources on the professional development needs of its members. Its members include organizations such as the Michigan Bar Association, National Truck Equipment Association and the Michigan Nurses Association.

"After our Chairman learned about the Hoshin tool from Scanlon Network President Paul Davis a year ago, we decided it would be a valuable tool to offer to our members," said Cheryl Ronk, President. "We used Hoshin in our own planning process and liked it because it involves many different audiences in the process and makes reporting to our board of directors very transparent. Everyone can see our goals and objectives and monitor how well we are doing and our actions to achieve them. It helps us keep our eye on the ball.

"I also like having Hoshin on our server," Cheryl said, "because it makes it easy for our staff and board members to monitor the plan quickly and conveniently."

MSAE is currently in the process of educating their members about Hoshin and how it helps everyone understand how their work fits into the strategies of their organization and its effectiveness in monitoring performance. An article by Paul Davis explaining the Hoshin tool and its uses will be published in the June issue of the Society's magazine for members.

Scanlon Hoshin Quick Start is a three-hour training program on Hoshin concepts and includes a leader guide, participant manuals, a set of Excel templates and a coordinator's guide. Members of the Scanlon Leadership Network may download Hoshin from the Scanlon website free of charge.

As I See It - Jeanette Guinaldo



Jeanette Guinaldo, End Finisher, SGS Tool Company, Munroe Falls, Ohio. Jeanette has been with SGS for six years and became a part of the Associate Involvement Team (AIT) two and half years ago.

"AIT is a group of mostly floor people. Right now our main goal is to improve communication between buildings, managers, shifts and floor people," said Jeanette. "We have been reviewing what we call issue meetings. We hold monthly meetings in the production facilities and invite floor personnel to come forward with any concerns or issues they may have.

"We take these issues to management for them. We thought the first meeting would be a grievance session but it wasn't. Associates had concerns that involved the entire company and they had suggestions on how to make things better. Management was impressed to see that associates were thinking of the whole company and not just their floor or building.

"Our AIT Scanlon program helps us to function as a real company. SGS is scattered over three cities. The plants are in contact with each other but work independently. AIT puts a physical link between the buildings and it makes everyone aware of how their job affects the entire company."

As I See It - Andrew Giniger



Andrew Giniger, Investing Area Manager, Pacific Cast Technologies, Inc., Albany, Oregon. Andrew has been with the company for two years and is a long-standing supporter of a participative work culture.

"I have been a firm believer in this management style for years," Andrew said. After attending the 2003 Scanlon Conference "Spring Training," Andrew returned to Pacific Cast with "even more tools to continue with this belief and the idea of improvement through involvement.

"The Conference was exceptional," Andrew continued. "It was my first exposure to the Scanlon philosophy and I was most impressed with the contagious enthusiasm that existed. The companies that live this philosophy know how much they and their employees benefit from it. I just tried to keep that enthusiasm alive and convey it to those who work with me. I would highly recommend attending the Conference if given the opportunity.

"We're in the process of finalizing our Scanlon Plan now. I think the main advantage is that this philosophy allows the people with the expertise to have a hand in what we do and their input is key. We have a new saying since adopting the Scanlon principles - 'All you have to do is ask.' This helps foster a culture where everyone gets involved and knows it's okay to give their opinion."

As I See It - Lance Gray



Lance Gray, Production Supervisor, Pacific Cast Technologies, Inc., Albany, Oregon. Lance has been with the company for nearly nine years and has been involved with its Scanlon Plan T.E.A.M. (Together Everyone Achieves Milestones) since the beginning.

"At the time, I worked in the shop," Lance explained. "It wasn't until I attended the 2001 Conference that I had a greater understanding of Scanlon.

"The Nicholas Plastics tour also opened my eyes to the possibility of what we could do with Scanlon principles and practices," he continued. "These were real people that had a wonderful insight on how to handle some of the issues we were having because they already experienced and resolved them.

"Now that I'm running the department, I have 21 guys that work for me in a very hands-on field. These are skilled craftsmen with a lot of knowledge about their jobs. They are my greatest resource.

"For me, communication is key," Lance said. "I make sure everyone is informed of what's going on with the company and they share their knowledge with me. We have to listen to our employees, get a consensus on what they need to make our company better, and - most importantly - act on those ideas. Scanlon proves that these changes make a difference over time and that our goals are achievable."