Sandra Cadjenovic looks back at the last 18 months of lean implementation at SCGM, pointing out the main difference between the old ways and the new approach to running the business.
Back in 2004, I founded SCGM together with my partner. We invested a little amount of money, rented a small home office in a residential building where we spent a lot of time working, sharing ideas and day-dreaming about the future of our small enterprise.
In front of us, we had two computers and a vision – to grow into a regional leader in plastic processing. Too ambitious a plan at the time, but the one we strongly believed in.
The first big international customer came along soon after. Realising we had to give our best to keep them (and keep them happy), we hired local companies to do tool production and injection molding for us. We had been following the project, simultaneously looking for new customers.
With that initial project, the first huge one for us, issues came – the companies we hired for the job failed at respecting their deadlines and at producing high quality products as required. That’s how we lost our customer.
We were lucky enough to find another client. It was our second chance, and this time we knew we had to take the reins: we started manufacturing ourselves, as we could not afford to make mistakes.
The following year, we moved to a 1,000-square-metre production facility, hired 15 people and bought four machines. Everything got organised in three main sections – tool shop, injection molding department and assembly shop.
Jobs were coming in one after the other and the number of people and machines increased accordingly. In 2008, we found ourselves in space twice as big as previous one, with several new machines and many more people. Obligations and workload were piling up. We were growing, but uncontrollably and in an unsystematic way.
I realised that in 2011, when we decided to hire a consultancy firm to help us see where we stood and give us direction. They introduced us to lean thinking. The lean tools that we started to use made us conscious of the losses we were generating; the lean philosophy convinced us of the need to change the culture of the organisation.
Time loss from management and employees proved to be one of the major challenges for us – offers took a long time to be generated, tasks took ages to be completed, with people dawdling and customers waiting in the meantime. Why? Because the decision-making process was way too long. Why? Because information was travelling a long way from the lower levels of the company to me or somebody else from top management (we were supposed to check and approve everything). Why? Because people at all levels were not given enough autonomy. Why? Because the internal structure of the business was bad.
By looking at our processes from the right perspective, we saw the following:
What we had:
- Employees with basic skills
- Individual interests
- Different goals
- “I-did-not-do-it” mentality
What we did not have:
- Common goal
- Team work
- Clearly defined responsibilities
- Multi-skilled people
- Autonomous work
To start up with our new way to do things, we had to leave behind our pride; compromise between different views and interests; align our personal objectives into one, common company goal that everybody would accept and follow so as if their own – customer satisfaction.
For the company, that goal meant a long-term business strategy. For my employees it meant the same, but the setting of the goal and the way to reach it had to be clear and highly understandable by everyone, or people would quickly become disengaged.
Once the company-wide goal was established, we gathered group leaders to create The SCGM Way Master Plan that we’d need to implement to reach that goal. The analysis of the current situation and a few well-defined steps helped group leaders to figure out improvement goals for their individual departments. Presented action steps for each of the pillars allowed transparency across the company, avoiding conflicts and doubling up on efforts.
Finally, it made me happy to see a true corporate atmosphere around me and to see growing team work stemming from within. In each department, more teams were arranged with one person leading them.
All of this created a perfect framework for the leaders to create a new competence matrix and assign clear responsibilities to each one of the team members, carefully estimating their potential. Daily training both at the gemba and in the office was conducted.
After strong initial resistance, eye rolling and sentences like “It is not possible” echoing throughout the plant, people grew more interested in learning by doing, changing their routines and seeing themselves solving problems that earlier they couldn’t tackle. They were happy to express their ideas and see that they matter. One could see how proud they have become to have more power in their hands to change things for the better.
For management this change meant a lot of patience and a lot of explaining to do to deal with resistance. Leadership and perseverance were tested, but they, too, were increasingly satisfied in seeing team members getting on board and taking an active role in changing the organization. Bit by bit, autonomous work of shop floor operators started to become a reality.
The structure of the company went from being strictly hierarchical to one where everyone is equally responsible for their own areas; where decisions flow smoothly and information does not get lost; where offers are prepared in 50% less time than before and where the lead time is considerably lower.
I am aware that leveled management and employee empowerment are still in their infancy, but I believe in the path we have decided to take, and – more importantly – in my employees.
However, enough with my perspective of things. Here is how the people see it.
Olivera Cekerevac – Assembly operator (in SCGM since the founding of the organisation)
“At the beginning, we did not have a systematic way to run the organisation. Over time, and especially recently, a new system has been built and now we all know our responsibilities. The quality is what we continuously focus on, as well as efficiency. The introduction of overall manpower efficiency at SCGM meant the world to me because, being one of the oldest people in assembly, I thought I was the slowest one but it turned out it is quite the opposite. I am quite happy about that.”
Glisovic Sandra – Injection molding operator (four years with the company)
“What I have noticed in the last four years is that everything we do has increasingly become a team effort; we do things together and accomplish work more easily and faster than before. Our shop floor is cleaner and everybody has a responsibility and is very much aware of it – it used to be a women’s duty and we were overburdened all the time. Lean and 5S have helped us. We take more care of machines and our working environment now. We always try to be better for the sake of the company, which means for ourselves really. What we save we re-use to improve our workplace. Also, people and their efforts are appreciated and awarded. That makes us all more motivated.”
Radoslav Prcic – Tool shop group leader (with the company since its establishment)
If we compare the before and after, the after is way better. People in the tool shop are far more independent these days. They have been trained to know their machines and maintain them. Training is in process and workers respond well to it. Concurrently, there has been investment in tools – earlier we used to struggle with what we had (and we had little equipment to work with), while now we have everything we need.
Nine years have passed and we are finally starting to realise our dream to build a truly successful organisation, with one huge difference. Up to 2011 we were building the company by investing in additional space and technology. We have since then begun to build a different culture, develop our people and their minds, grow team spirit and construct the right structure.
The growth of the company is a natural result of that.