December 2005

HON's Cedartown, GA, facility specializes in manufacturing laminate and metal desks, filing cabinets and bookcases.

This year, office furniture giant HON and its parent company, HNI Corp., earned that distinction by being named one of the "50 Best Manufacturing Companies" by IndustryWeek magazine. The selection was based on an evaluation of three-year's growth of the corporation's revenues ($2.1 billion in 2005), profit margin (5.43 percent), as well as inventory turns, asset turnover, return on assets and return on equity.

HON credits the corporate-wide implementation of Rapid Continuous Improvement (RCI) and lean office furniture manufacturing for helping it to achieve its high level of profitability, says Kevin Mathis, HON operations manager.

"[RCI] is a great process that really defines our lean office furniture manufacturing philosophy. It's part of The HON Company's culture where everyone is involved in taking the customer requirements, deploying them through the manufacturing facility and working to make sure we can satisfy those customer needs," Mathis says.

This philosophy is best exemplified by HON's Cedartown, GA, facility. In addition to winning the prestigious Shingo Prize for excellence and lean manufacturing in 2003, the plant has been named one of IW's "10 Best Plants" in North America for 2005. Located west of Atlanta, near the Alabama border, the 533,619-square-foot Cedartown plant produces metal and laminate filing cabinets, desks, bookcases and shelving units.

Mathis talked recently with Wood & Wood Products about the award-winning success HON has had in implementing lean office furniture manufacturing and of the company's philosophy of total employee involvement in its quest for continuous improvement.

Wood & Wood Products: The HON Company's Cedartown facility recently won the Shingo Prize for excellence in office furniture manufacturing and also has been recognized by IW magazine as one of the 10 best plants in North America. Can you provide a brief summary of the management practices that distinguish this facility from others like it?

Kevin Mathis: We're really focusing on how we take care of our customers. We've developed a process that allows us to take that feedback from our customers and deploy that within the factory so that individual members understand how what they do impacts our customers, whether it has to do with quality, the value of the product or delivery.

When we think about operational excellence, we really think about it from the marketing viewpoint and what that operational excellence means to the market. In other words, how do customers want their product delivered, what kind of value do they want and what kind of quality do they want? Then we translate that into action plans and measures for the factory floor. It's all part of the same process [of lean manufacturing].

W&WP: When did the Cedartown plant switch to lean office furniture manufacturing? Are all of The HON Company's plants run in a similar fashion?

Mathis: The HON Company started that transition [to lean manufacturing] back in the mid-90s as a way to provide better value to the customer. What the lean process allows us to do is focus on eliminating waste, or those non-value-added processes customers don't want to pay for [i.e., rework or time delays from parts waiting to be processed], and then streamline our operations so we can respond more quickly to customer demand. What we've been able to do is shorten our lead-time, which makes us more nimble and lowers the overall cost.

Lean office furniture manufacturing is more or less a journey. Lean isn't something where you just turn a switch and it starts. You start training people, you have a lot to learn and it really takes a long time to get it into the company culture. In a lot of respects, we still have a great deal of work to do, but as our learning continues, our members are getting more and more involved and the process improvement accelerates as time goes on.

All the HON plants are on different parts of the journey of learning. But in terms of the overall philosophy of how we deploy the end-user requirements and the customer requirements to the plant, and align those projects, measures and acts to achieve those [goals] - that's a process that is consistent in all our plants.

W&WP: : Did you embark on a lean office furniture manufacturing program with the goal of winning the Shingo Prize? If not, when did you realize it was a viable option?

Mathis: No we didn't, not at all. We thought about lean, implemented lean and pushed lean more as a means to better satisfy our customers.

We talk about driving quality and lead-time, but the process of applying and winning the Shingo Prize is really a process about learning - it's based on the lean manufacturing philosophy. And the process of applying, training, learning, and then winning and getting feedback from the Shingo Prize examiners, is part of the [journey].

We use the criteria [developed from the Shingo examination process] to evaluate all of our facilities. We have teams of members that are trained to do that, and they'll go into our facilities and will benchmark [them] against the Shingo Prize criteria. That then helps drive us toward continuous improvement in our facilities.

W&WP: The Cedartown facility has reduced costs by more than $7 million while at the same time increasing profitability by 27 percent. In which key areas did most of the savings occur? What other areas also saw savings?

Mathis: It was a lot of little things, not any one thing. It's really about eliminating that waste and non-value-added activities we talked about. It's how to take seconds out of a job, or minutes out of a job or cutting the inventory in half. You do that over and over again and the savings start to build up. It's about members getting involved in our processes, learning how to identify waste, and then energizing them to go and implement new processes or whatever it takes to eliminate that waste.

W&WP: Can you cite some specific examples/steps taken to streamline the office furniture manufacturing process?

Mathis: One example of how we eliminated waste [time] was simple. We had two machines that were 10 feet apart, and parts [had to be put] on pallets between them. We moved those two machines together, so now you take a part from one and move it directly to the other - it doesn't sit and wait for processing. It's pretty basic, but those things add up pretty quickly.

Another good example: we manufacture vertical files as one of the products in this facility. There was one particular station where there was manual welding. It was very difficult to do and created a bottleneck at the line. A group of members got together and designed an automatic process [which could] weld in a much faster cycle time. They were able to speed up the pace that the line could run, and also make a safety improvement by eliminating a job that was very difficult for members to do. That would be a typical example of the type of activities our members are involved in, and [how they are] looking at operations and trying to find ways to improve them.

W&WP: How have employees benefited from the transition to continuous improvement and lean office furniture manufacturing?

Mathis: We call our employees "members." Part of our culture is that they're members of the organization; they all contribute to the profit and improvement and in taking care of our customers.

We have many different ways they can do that. We have a process whereby [individuals] can implement ideas on their own. If they find something that they think can improve their job, then they are given time to work on it and allowed to implement the idea. We have teams that focus on a specific project. We also have teams where their full-time job is this continuous improvement process - how can we better serve our customers by improving our plant? Of course, [these ideas] help improve the process, and [everyone is] involved in the process.

Part of the HON culture also is that after one year, all of our members become shareholders and we all share in the profit of the company. That also helps engage members into our continuous improvement program. It helps keep members connected.

W&WP: In addition to winning the Shingo Prize and the IW award, what other ways has the Cedartown facility distinguished itself?

Mathis: Cedartown also has won a number of other awards including the Georgia Oglethorpe Award for performance excellence. We applied for these awards with the same thought in mind - the learning that we can gain by going through the process.

We also have active safety programs in all our facilities - safety is number one in everything we talk about. All of our facilities also have community involvement programs. Each facility has a team of members that decide what that facility will do in that community. Some of the things the Cedartown plant does include sponsoring local school programs where they do reading and mentoring. Cedartown also helps fund some continuous improvement programs at the schools. We also hold golf outings as part of the process to raise money for the community. Those types of things are part of being a good corporate citizen and part of the community.