Vehicle storage solutions manufacturer Black Widow Enterprises faces the challenges that most small, family-run businesses need to deal with. CEO Jason Oliver speaks with Roberto Priolo about what it means to gain leadership buy-in when leadership is your father, and talks about the application of lean in small organisations.
Roberto Priolo: Tell us a bit about Black Widow’s lean journey.
Jason Oliver: Years ago, while on a trip to Singapore, I came across the book The Toyota Way and decided to read it. A lot of it made sense. I took it back to Black Widow and talked about it with my father, who was then very hands on in the business. He said: ‘We are not going to do that, it is just rubbish!’ It’s the common story of resistance to change in favor of a more traditional batch and queue system.
A year or two later, we ran into trouble with cash flow and our lead times started to increase. It seemed we just couldn’t get the product out of the door and find the efficiencies that we needed. At that moment, I suggested lean again – but that attempt failed, too.
In the meantime I had started to contact a few TAFE training providers [which award certificates for lean manufacturing in Australia] and asked them to come in to provide training on site. Again, I had to deal with my father’s resistance.
But after another year, he finally agreed to give lean a try. ‘It can’t get much worse than this,’ he said. We had got to that shut-up-and-do-it point. We launched the implementation, with a monthly visit to our site from the training provider to teach us the fundamentals of lean.
RP: How did you see Mark’s approach to lean change over time?
JO: When my father saw 15-20 people sitting around during one of our meetings rather than working, he went crazy. How can we get more productive by sitting down, he wondered. After a few months, however, we managed to obtain buy-in from people and he started to understand why I was doing what I was doing. We got some traction and began getting a lot of low hanging fruit. Through those initial steps, we got some great results. He started to get it after seeing those quick gains, until he eventually told me, ‘This might not be so bad.’
Mark may have never fully committed to sitting down and learning about lean, but he has seen the results and is now full steam ahead with it. If I want to implement something he gives it 110% support.
RP: What were the quick wins you got in the first year?
JO: Black Widow’s productivity went up 40%. We moved from a batch and queue system to one piece flow and we introduced standard work. That created a lot of efficiencies. At the time, we were able to get 40% more production out with three less staff – we went from 18 to 15 employees. Those who left were the troublemakers, those who resisted. As soon as we made them accountable and measured them against standard work they couldn’t handle it and decided to go.
We cut all overtime, went back to standard 38-hour weeks from 45 hour weeks (cutting all overtime wages) and got 40% more products out, with three people less working with us. There were very big wins in that first year.
JO: Ours is a pretty unique product, which we supply to a niche market. In the past we only had one major competitor, based on the other side of Australia. When we started lean, we had a 50% market share. That company is no longer in business, but four or five other competitors have now popped up. We are now faced with competition from more angles (the Chinese included), so we always need to find ways to innovate and make better products.
Lean is challenging us every day to push forward and keep those competitors out of this limited market. We need to keep ourselves relevant to our customers.
RP: How often do you create new products? Is lean applied to your product development activities as well?
JO: My father may be a little old school, but new ideas and innovation are definitely his forte. We are very lucky to have him in the organisation.
We launch six to ten new products per year. Our weakness is not coming up with new ideas, but going through the product development process and then commercialising our products.
We have often found ourselves trying to work on too many products at any one time and not getting any of them done. When we do get them done, there are some basic things, like instructions and bills of material that should be in place but are not. Team leaders then have to sort it out. For the first six to 12 months of any product we launch, we are often facing big difficulties and sometimes lose market share because of that.
About 12 months ago, we started to benchmark against other companies (we went on a tour of a tier 1 Toyota supplier, for example) – we met their engineering manager who had had Toyota come out and step into the organisation’s product development process, which I asked them if I could borrow.
I applied that system to our own process. We are turning products around with a lot more clarity, because we have a structured approach. We have the next six months worth of engineering and development time booked out and we are working on two projects at the time.
Essentially, we are working products through and taking them to market in a more prepared and faster way. For our latest product, for instance, we spent a lot more time in the design phase than usual, working on lean before releasing the item to shop floor. It’s only been in the market for a month, but we were definitely more efficient in its production and smoother in its release and launch.
JO: Bigger players have off line resources (process engineers who can study the process, financial backing to invest in equipment, etc). On the flip side, small companies are not slowed down by bureaucracy, approval processes, and red tape. They can just get on and do it, because they are more nimble and reactive. We did find this to be an advantage for us. I do a lot of factory tours and talk to a lot of people: many have been very impressed by some of the results we have got. ‘We wish we were a small company… just to get it done,’ they tell us.
What I’d say is that lean has given structure to Black Widow’s growth. Over the years we have doubled our workforce.
RP: What impact do family ties and dynamics have on the way lean is implemented? Culture-wise, are they a challenge or a point of strength?
JO: Family businesses are always fun, but also present many challenges. Lean, when applied, is one of them. My personal view is that in family businesses it is common to see a father or grandfather who are very old school and set in their ways, while the young generation tends to be too ambitious at times.
My father has pulled me back on a number of occasions, when I was going too far. Family dynamics have slowed us down too much in the past, but have also helped to strike the right balance between the aspirations and ideas of two very different generations. I found it challenging to have my father in the business. In my opinion, companies could often get traction a lot quicker if they weren’t held back by this kind of situation.
RP: Does camaraderie have a role to play in the implementation of lean in a small organisation?
JO: For sure. Thinking back at that time, five years ago, I can honestly say our business’ culture was not good. Half of the group was hard working, the rest was made of bullies and even company detractors. That’s old school manufacturing, I guess, when you have a rough lot and good lot.
In the early days I think I was a little too soft with lean. I didn’t tell people to either get on board or get out. In hindsight, I should have been stricter. Once the more problematic staff left, engaging the rest was easy: they were loyal to each other and took part in fostering a new culture. We soon found out that this culture was self-reinforcing. We had high turnover of employees back then, while now most of our staff have been with us for a good three years. The culture of Black Widow is open to change, engaged, happy to get on board.
RP: One of your goals is to further double the number of employees – are you on track?
JO: That’s my ambition. That growth comes from new product development. We are diversifying ourselves to enter new markets. Ours is quite limited. We are starting to get into more commercial/fleet vehicles, which is a side of the business we are expecting to see grow a lot. We have already spoken with current distributors and researching new customers.
We always look for a niche, for a market that is not being served well or characterised by low quality products or customer service. I am very confident that we are going to grow and achieve these goals, provided that we have to be efficient and keep the prices low. In the future we are going to be applying lean in design. That’s where the growth is.