CEO tells local business leaders to adopt a business system that increases value, minimizes waste
By Richard Gaw
Alix James, the president and chief executive officer of Boothwyn-based Nielsen-Kellerman [NK], a world-recognized maker of sports performance equipment, told more than 200 Chester County business leaders last week that incorporating the key concepts of a management system may increase a company's profitability and reliability.
James was the keynote speaker at the Southern Chester County Chamber of Commerce's annual fall luncheon, held Oct. 22 at the Hartefeld Country Club.
Throughout her presentation, entitled "Lean, Agile and Strong: How to Build a Lasting Company in a Challenging Environment," James introduced the concepts of the Lean Management System, which has helped NK improve profits by maximizing its customer value and minimizing waste.
James said that the Lean business model is not only used effectively in manufacturing but in other industries such as health care and other service industries. Lean's purpose is not to make employees work harder, but to maintain a nicely-paced work tempo in the workplace by adapting to a fundamental, long-term shift in the way they approach the workplace.
The framework of the program, James said, is to identify the value of what a company is creating, connect the program to flow, eliminate the waste in the process, allow customer demand to pull the product, and involve employees in the transformation process while communicating your company's differences to them, and continue to the process repeatedly.
The bottom line of getting the Lean system to work in a company, James said, is to identify change agents within the company; respect and use the knowledge of employees in a company's mission, and reward them for using Lean principles in the workplace; and to commit long-term to the management system.
"As the manufacturing industry grew, we started investing in heavy pieces of equipment and became very focused on optimizing assets, based on the productivity of the machines we bought," James said.
"That actually drives some very undesirable results, with overproduction. Lean is very focused on flow, throughout [a businesses' process]."
The paradigm of how the Lean Management System works in a company, James said, is best seen through a value stream map, which covers the physical flow of the company, including what individuals and departments are involved, the amount of time spent on the work, the amount of time spent in wait, and the flow of information throughout the company.
"Typically when you start [the Lean system], your [value stream map] will look like spaghetti," she said. "Any place in the business where something is waiting, such as a pile of inventory or a pile of work to be done, is always an indication that there is a constraint in the system, and no matter how much you speed up other parts, that constraint is always going to be what sets the flow of your company's entire flow process."
No matter if its manufacturing, communication or paperwork, James said that the Lean program succeeds when each person is doing their part to properly flow the product from start to finish through balance, time management and cooperation between employees.
James said that the key component of the Lean Management System is to find ways to eliminate waste in a company, such as defects, lost time, excessive transportation, over-production, excess processing and inventory that sits for too long a time.
"You're going to get rid of anything in the workspace that doesn't contribute to getting that job done," James said. "You're going to make sure that every tool you need to do that job is right there, and is appropriately sized for the amount of work you'll need to do. You're going to organize the tools so that you can find them, which creates space."
James stressed that the best way to successfully educate and dedicate company employees to the Lean Management System is for the company's leaders to demonstrate to their staff that they, too, are committed.
"It's time to walk the walk and talk the talk," she said.
To contact Staff Writer Richard L. Gaw, e-mail firstname.lastname@example.org.