Lean Journey Braun Ireland
THE SUNDAY BUSINESS POST
LEAN STRATEGIES TO STOP JOB LOSSES
13 June 2010 By Gavin Daly
When Liam Cassidy was sent to Iowa in 2000 by Gillette, he was given a clear task: to find the best way to close a factory within two years.
Gillette’s Oral-B plant was the biggest toothbrush factory in the world, but it was coming under pressure from low-cost locations such as Mexico and China.
However, instead of shutting it down, Cassidy turned the business around.
His first budget plan showed that the Iowa factory could compete effectively with lower-cost locations, because it was closer to its customers and could offer better service. Instead of being closed down, the factory became a benchmark for Gillette worldwide.
For Cassidy, the Iowa experience proved that the shift of manufacturing to low-cost countries – a trend that has resulted in thousands of job losses in Ireland – is not inevitable.
‘‘Almost any plant can be given a really good chance of surviving if you do the right things,” he said.
Cassidy joined Gillette in the early 1990s and worked in its factories around the world, including its Oral-B plant in Newbridge, Co Kildare, and its Braun factory in Carlow. Following the takeover of Gillette by Procter & Gamble in 2005, he went to Shanghai to run an Oral-B factory with 1,200 staff.
‘‘It’s a big site and getting bigger,” said Cassidy, whose job was ‘‘to prepare the workforce in it for future growth’’.
Last autumn, he left the multinational sector and set up his own consulting business, LCL Consult.
With offices in Dublin and Shanghai, it specialises in turning around manufacturing plants by applying ‘lean’ practices pioneered by Japanese companies such as Toyota.
Cassidy has just returned to Ireland from a project with a German company in the Czech Republic and is also working with two factories in China.
They are joint ventures between western companies and Chinese workforces, and LCL -which stands for ‘leading change through lean’ – is working on modernising their working practices.
‘‘It is possible for any business to slash costs if they apply Lean practices.
We have a formula to turn factories around – in high-cost and in low-cost locations,” said Cassidy, who believes that Ireland has lost a lot of manufacturing operations unnecessarily.
‘‘It’s sad when a factory closes. It’s a tragedy for the people involved and for their communities, but it’s not inevitable,” he said.
Many factories could have survived if they had a greater focus on eliminating waste, according to Cassidy, who uses ten principles in his approach.
‘‘We create a vision of where an organisation can go,” he said.
‘‘We give everyone – at all levels – a voice, and we listen to what everyone has to say. That open communication is an essential thing.”
Cassidy’s message to staff is that they have the ability and responsibility to ‘‘drive out waste’’ and improve the performance of the business.
‘‘You drive out bureaucracy,” he said. ‘‘People at all levels are trained to identify waste and people are trained to continuously improve; they are never happy with the status quo.”
That isn’t always a painless process – in the case of the Oral-B factory in Iowa, it involved some layoffs and a pay freeze for remaining staff. Cassidy is clear that no one can be insulated from that process, even senior management in an organisation.
‘‘Managers are paid to take the tough decisions, but management teams don’t always do the right things,” he said.
‘‘Some companies don’t even know they need help. You have to be businesslike and separate out the people who are going to get in the way of necessary change.”
Cassidy firmly believes that Ireland can maintain certain manufacturing operations if the Lean approach is applied. His ideal factory is one with fewer than 600 staff: any more than that and they become unwieldy and wasteful.
‘‘If they are maintained at that level and do the right things, they have a very good chance of survival,” he said.
Assigned to prepare plant for closure –
made it best plant in Gillette within 2 years!
Company: Oral B, Iowa City, USA
In 2000 parent company Gillette was rationalizing its business and decided in principle to close the Iowa City plant due to its high cost base and inability to compete with sister plants, particularly those in Mexico and Asia. Liam Cassidy was asked to go there, and prepare for closure announcement within 2 years.
Liam quickly identified it as a strategic location in the midst of its largest market, and saw the logistical challenges it would face by moving its business off shore. The lead times would become much longer and they would be unable to react quickly enough to provide the kind of service its largest customers like Walmart and Costco expected. He felt that with an aggressive Program of Change, the implementation of Lean Practices, the removal of many of its managers who were resistant to change, and replacing them with those who would drive change, that they would have a good chance of competing successfully. He wrote and implemented the 10 Principles referred to earlier in this document. Going there in October 2000 he produced a budget the following September that showed that they could successfully compete. Within 2 years it had become the best factory within Gillette and became the benchmark site for the rest of the organisation.
Reduced workforce by 40% and improved productivity by 56% in 3 years. Products costs were slashed between 30-60% and now compared favorably with China and Mexico. Value Streams were created, giving cross functional teams responsibility for “their” factory, thereby making a large plant easier to manage and improving communications. The supplier base was rationalised and an aggressive Supplier Development program implemented.
IOWA CITY CASE STUDY
Case Study China
Case Study Czech Republic
TRANSFORMING A MANUFACTURING ORGANISATION
Secure your future with LCL Lean Change Programs!