Page 427 - The Toyota Way Fieldbook

400 THE TOYOTA WAY FIELDBOOK

Tenneco had recently hired a lean manufacturing expert, Pasquale
Digirolamo, who agreed to dedicate almost all of his time to the plant
for 8 to 12 months and treat it as a Tenneco lean pilot. Digirolamo
and the plant manager, Glenn Drodge, met three times every day—a
morning planning meeting, a midday review, and an end-of-day review.
Digirolamo played a coaching role but was aggressive. He found the
overall level of discipline in the plant to be weak and was fond of
saying, “You get what you tolerate.” The Japanese consulting firm
Shingijutsu had trained Digirolamo to lead radical kaizen workshops.
He scheduled aggressive workshops every other week, in most cases
setting up a complete manufacturing cell within the week. In the first
six months, all subassembly operations were converted to cells. In
the second six months, all final assembly operations became cells. The
entire plant was laid out almost from scratch, and about 450 pieces of
equipment were moved to the new layout. New shipping docks were
built near the point of use. Primarily through the radical kaizen work-
shops, the plant was virtually remade from the bottom up. This was
kaikaku (radical transformation), not kaizen (continuous improvement).

In preparation for this one-year radical remaking of the plant, Digirolamo
estimated that the plant had 40 percent more workers than it should
have. He recommended a one time layoff before the workshops began.
Mostly temporary workers were let go as the plant relied heavily on
agency workers. Other workers were offered Tenneco’s standard
severance package, and enough took it to preclude involuntary
layoffs for hourly employees. Some front-line supervisors were let
go—people who did not have the management and leadership skills
to perform in the new lean environment. The verbal commitment
between the plant manager and Digirolamo essentially meant that
Digirolamo was taking over the plant.
The bottom-line results were striking. Digirolamo came in as sensei in
November 2000. Some time was spent on stability issues. In January
2001 lean deployment started seriously, led by the Smithville Lean
Steering Committee. By April the plant had made a turnaround from
below target to above target and other Tenneco plant managers were
asking what was going on at Smithville. In the first year, labor cost was
reduced by 39 percent, direct labor efficiency improved by 92 percent,
total labor productivity went up by 56 percent, inventory dollars on
hand were cut in half—freeing up $5 million in cash—external defects
were reduced from 638 to 44 parts per million, and lead time was cut
in half. In 2002 the plant for the first time received Toyota’s coveted
quality and service award.

In terms of the different approaches to change covered in this chapter,
Smithville in this first year had used a radical version of the “kaizen