Some principles and methods are successfully being applied in 95% of German companies. * At Staufen we see our customers and partners in China catching up fast and we believe Chinese companies will reach comparable maturity levels in the operational areas within the next 3 years. What is missing though is being effectively and continuously successful as a company – beyond functional borders. What this basically means, is that most companies are not yet taking full advantage of the potential that lies within an integrated approach.
The biggest challenge on the way to becoming an excellent company nowadays is the transformation of transactional functions and supporting processes. For example, in Germany only one out of five companies has in place Lean Management* – at least the methodology. In China this has just started with some companies realizing that improving production performance is not enough to stay competitive.
Often enough just copying the approach from production into the offices, without first understanding the principals and properly translating them, has just left nothing, but scorched earth behind. Whilst clearly a company can only become excellent in the performance of their value streams if the supporting functions and processes do so, too.
Why is it so much harder to understand and apply Lean principals as soon as we move from the shop floor to offices? Being farther away from the place where “value is created” – production - and being instead in an environment with a lack of basic understanding of value add value streams, offices are a place where we cannot observe the transactional processes, as we do in production, which means that the waste will be less obvious, too. So, the two basics of defining value and identifying waste are a much higher hurdle to take in Administration and yet indispensable to move forward on the way to excellence.
Good news – most leaders have understood, that their companies need to tackle this issue. Within the next decade they plan to have implemented ‘’Lean Administration’’ to a level above 60%. Might sound like an ambitious target, on the other hand one could question whether this is enough. Clearly, the ones that will be going faster will outperform competition and gain market shares. In China, with raising salaries, especially for qualified staff in the indirect areas, this is even more crucial.
Digitalization (Smart factories, Industry 4.0.) is moving fast. Without clear and lean ways of communicating and sharing information across all areas, the digital transformation will most likely fail. Therefore, companies need to identify and measure value contribution and success factors of transactional areas and supporting processes in order to control them on a highly frequent base. This will allow identifying and reducing waste. The less waste and disturbances between all interfaces in your company as a whole, the better your position to outperform and be one step ahead of your competitors.
*Source: Study „25 Years of Lean Management“
Raise Administration up to excellence – Lean Transformation @ Carl Stahl
Moving from producing ropes on the German countryside to Best practice in the industry with Lean Administration
Carl Stahl’s history starts on the idyllic hills of the Swabian Alb in Germany, manufacturing ropes for the farmers in the area. Today they are a global player within their industry, serving customers in 61 locations across Europe, Asia, North America and the Middle East. Since passing the first million mark of revenues, a rapid growth started to more than 300 million turnover these days… and still growing.
The initial idea to rebuild the company structure reflecting the core value streams was born in 2007 and finally implemented in 2016, when at the same time Carl Stahl managed the introduction of a new IT system.
‘’The know-how and motivation of our employees has always been a driving force at Carl Stahl. We have learned to use this strength systematically for sustainable success and continuous improvement.’’
Growth = Success?
Not so many years ago, it was a little surprising how this company could be so successfully growing looking at all the difficulties that growth brought along – highly complex organizational structures, unclear processes and very long lead-times. The answer to the question on how they could manage that is simple: with a tremendous amount of effort.
Innumerable overtime, countless extra days of the staff for internal alignments, clarifications, corrections and even double work. At that time no one really knew how to apply Lean in indirect areas. There were very many improvement ideas and a lot of activities started to change things for the better, but only little got effectively implemented.
Today, all activities at Carl Stahl focus on delivering added value to the customers with all products and services. Instead of adopting processes to functional organization charts, they designed processes in value streams to best serve their customers. This not only extremely reduced complexity e.g. in material handling and order fulfillment, but also through the synergies created even more benefit for the customers: service, quality, delivery performance und Innovation.
With no doubt, we can say the formula is: growth + value add for customers * minimized effort = Success!
Mr. Tobias Kehrer, General Manager Carl Stahl Lifting Technologies, explains their success the following way: „Quality as the customer sees it, is our focus. These days, that has become a decisive factor to be ahead of our competitors “.
Of course, but how can we really manage? Common thinking has always been: better results in quality demand for higher costs…
Approach and solution to this dilemma:
Top Performance = Lean Management Competences + effective implementation in every day operations
After many isolated projects and attempts, finally in 2012 a team ‘’controlling & processes’’ is newly formed. As a crucial element of the comprehensive approach being initiated then, the team is being trained and supported to become Lean Experts by Staufen. One of these persons being Mr. Kehrer himself, at that time Controlling Manager. Now General Manager, he still is a convinced driver of Lean Management, having experienced the benefits for the company and the employees through challenging times to today’s success story.
Lean Competence top-down and with a large scale
Carl Stahl launched their Lean Program in 2013. Every leader of the company group participated in the custom-made trainings and workshops of Staufen.
In addition to the proven methodology of Lean Administration, Staufen conveyed the essential knowledge on how to handle the processes in cooperation: motivated people being the base of any Lean transformation. The leaders and involved staff could experience the effects and benefits of Lean Administration through the practical workshops.
In parallel since then nearly every site kicked-off their activities participating in trainings and improvement workshops. Within that, further Lean Administration experts were trained inhouse by Staufen to spread practical improvement of core business processes.
Systematic continuity of the Lean Transformation
In 2015 a re-organization took place, consequently following value streams and lean principles. Essentially – the value streams are designed to the strategy, following market needs and organization as well as IT infrastructures are aligned to the value streams. Carl Stahl stringently followed that, building their new sales and team organization to allow best processes with least waste and even the new office layout supporting that.
The next major step on the way to excellence throughout the company is to further develop leadership with Shop floor management in both, direct and indirect areas.
Results and conclusions
Instead of pushing Lean Management now there is a pull!
Nowadays time and space to work on innovation and creating values for customers is available. “The benefits resulting from that, as well as the thousands of ‘’little’’ improvements within the daily work, make Carl Stahl employees wanting more, which actually results in them pulling for support by the Lean Experts.
From a company view – after 2 years of trainings plus additional 50 workshops in 14 sites the revenues per FTE have tripled (in percentage).
„Only downside, we did not keep track of the improvements by directly related KPIs. Shop floor management will help creating this transparency by developing process indicators to become even more effective and efficient. “emphasizes Tobias Kehrer.