May 6, 2009

Michigan Lean Consortium Kickoff

The newly-formed Michigan Lean Consortium met at the Macomb University
Center May 5. The meeting was hosted by the Pawley Institute of Lean Thinking of Oakland University.

Debra Setman, Executive Director of Lean/Business Improvement at Johnson & Johnson, welcomed the group and spoke of the consortium’s dedication to helping Michigan organizations use lean thinking to turn around the difficult Michigan economy. Their goals are aligned with Michigan Governor Granholm’s vow that Michigan would be one of the best places in the country to live, learn and earn.

Steven Kurmas, President of Detroit Edison, one of the two largest subsidiaries of DTE Energy, shared the story of how lean principles transformed Detroit Edison.

Having spent more than a year working with Jason Schulist, Director of Continuous Improvement at DTE—including hour-long interviews with Mr. Kurmas and two other C-level executives—on an account of the latest phase of the company’s lean journey for AME’s Target magazine, I can testify that Detroit Edison’s story is the real thing.

Kurmas briefly recounted the company’s 10-year history of fits and starts, focus on tools, drift from employee-centered continuous improvement, with honesty about the failures and lessons learned the company faced along the way. He said that in a company more than 100 years old with an embedded hierarchical legacy culture, that long a journey was probably unavoidable. Throughout the process, a core group of CI and six sigma experts had grown up, and knowledge of tools and terminology had been disseminated in various parts of the organization.

With the help of the Continuous Improvement group, people like Steven Spears, and other lean thinkers, the company’s leaders though about why those efforts had failed to yield widespread and lasting results. They concluded that they had been copying tools instead of understanding work, rewarded workarounds posing as solutions, failed to share knowledge systemically, and failed to develop the capabilities of all. The answers to those mistakes are described beautifully as the four capabilities of the high-velocity company in Steve Spear’s book, Chasing the Rabbit. (Read it!)

Kurmas and some of the other company leaders agreed to go through some weeklong leadership workshops developed through the Toyota Supplier Support Network and the Bluegrass Automotive Manufacturers Association. He and Schulist went off to an airbag manufacturing facility in Utah. As he told me later, it totally changed his perspective and he saw that he needed to be going to where DTE’s work is being done—the gemba—personally leading and teaching employees to be problem solvers.

Leaders need, humility, desire to learn, patience, and a passion for activity, according to Kurmas. How many executives realize that?

2008 was the roll-out of a cascade of leadership workshops all over DTE, involving all levels of responsibility and both administrative and operational functions. The total cost savings for the year--$130 million.

No one needs to be told that the Southeast Michigan economy is a disaster zone. You might think that a utility would be immune to the same revenue losses, but factories that aren’t running don’t use much power, nor do offices with empty desks and lights out. Not only that, but both commercial and residential customers are having trouble paying their bills. I don’t know what Chrysler owes DTE, but I wouldn’t expect that money to be forthcoming anytime soon.

Late last year, DTE took stock of the situation. They had to release a lot of contractors and interns, but made a pledge not to lay off any DTE employees. Let me say that again—they promised there would be no lay offs. At the same time, they set a goal of saving another $150 million through sustained, small, incremental continuous improvements to work processes. Kurmas said that in the first quarter of the year, the total savings stood at $50 million.

The meeting wrapped up with a series of “quickfire” presentations from MLC members Amway, Northwest Michigan College, and J&J.

Organizations that have already joined include J&J, DTE Energy, Amway, Blue Cross Blue Shield of Michigan, the Lean Learning Center, NW Michigan College, the Pawley Institute and the Shingo Prize (through the Right Place).

Most encouragingly, perhaps, was a delegation from the State of Michigan—people who wanted to use lean thinking to help overcome the problems of the loss of revenues. After the MLC meeting, they went off with some of the MLC charter members to explore how they might start doing that.

The doors are now open for companies to join the MLC, and it will be whatever they make it. Organizers are aware that the risk of reinventing the wheel is great, and have already talked to the Society of Manufacturing Engineers, Association for Manufacturing Excellence, the Shingo prize, the MMTC, MEPs, and so on.

Groups such as the MLC start off with high hopes. Not all survive and of those that survive, not all accomplish anything. I feel good about this one because of the caliber of the people who started it off, the groundwork they laid, and their openness to connections. As valuable as it was to hear from Steve Kurmas, they want to avoid more “meetings” and to go to sites where improvements are being made and talk to the people involved.

Got a suggestion, or want to be involved? Contact Beverly Brown of the Pawley Institute (bbrown at Oakland.edu), Debra Setman (DSetman at its.jnj.com), or Jason Schulist (schulistj at dteenergy.com).

2 comments:

Lester said...
This comment has been removed by the author.
Lester said...

Karen,
Great blog post. The meeting with the State of Michigan representatives, and several of the attendees, after the main meeting to get pointers on getting started on the Lean journey as a state entity seemed really beneficial. The State of Michigan is anxious to take waste out of the state system, and they realize the enormous job ahead of them. Getting waste out of a system where the top leadership continually turns over and is replaced by a team that sees themselves in competition with the outgoing leadership makes the job difficult. The Michigan delegation appeared up to the task, and there are several good examples of States that are making the Lean journey already they can view and emulate.

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