ThermOmegaTech’s Cultural Transformation
How Continuous Improvement Led to a High Performing Organization that Places Considerable Value on Its Greatest Asset!
When ThermOmegaTech leaders set out to adopt the principles of lean and begin their continuous improvement journey, they knew it would have a positive effect on the company’s bottom line, but they never imagined the transformation their employees would undergo and the effect that would ultimately have on the company culture.
Jim Logue, President and CEO of ThermOmegaTech, reflected on the state of the company when he first joined as a consultant. “There was departmental dysfunctionality to the point where machinists wouldn’t even eat lunch with assemblers. Continuous improvement is all about building communication.”
When Logue took on the role of COO in 2010, he knew the company had tremendous potential, but also knew that he would have to make significant changes to bring his vision to fruition. One of those changes was introducing lean continuous improvement principles. Logue had been sold on the idea ever since going to a luncheon held by the DVIRC years earlier where they presented the benefits of lean manufacturing and their lean training program. Now he was in charge, and ready to pursue that goal.
Logue knew he would not reach his goal overnight and that changing the company culture through lean continuous improvement would have to be demonstrated and committed to by the company’s leadership team. Otherwise, the employees would think it was just some “flavor of the month” management style that would not last.
“The first thing I did was to take DVIRC’s Lean training and coaching.” And Logue didn’t do it alone; he brought two of his top executives with him. Through that training and executive coaching, the leadership team saw the value in both the concept and the program, and committed to moving forward.
Many manufacturers similar in size to ThermOmegaTech see the potential of continuous improvement but are hesitant to implement it because they think they do not have the bandwidth to fully commit, or believe that they will not get buy-in from their employees. To be successful requires a complete paradigm shift in the way a company operates, specifically, leadership commitment and support, and employee engagement – ultimately employees buy in because they are making decisions that contribute to improvements in the company, it’s products, and their job. Continuous improvement transforms the culture of a company into a high performance organization—one that individuals want to be a part of.
Crystal Peterson, an assembler and one of ThermOmegaTech’s newer employees, had experience with that hesitation at her previous employer. “They attempted to be lean, but there was never a class. They tried to do it themselves, and it was forcefully introduced. It didn’t go over well,” said Peterson. Conversely, at ThermOmegaTech, everyone is included in the training, and management explains why they are implementing the program. “It’s easy to see the big picture,” said Peterson.
ThermOmegaTech leaders were committed to the change, but also took the time to convince their valuable employees that the lean methodology was the right way to go. Management knew they would have hurdles to get over, and the coaching that DVIRC provided helped them do that. Still, not everyone was so easy to convince.
“I’m not going to lie—I was resistant to it,” said Chris Kline, a machine shop manager. Kline had been with the company for a long time and had been taught to do things a certain way. He did not understand what lean was all about, but he soon became a champion of the program. “It didn’t take long to realize how much better it was for me in doing my job. It was mostly small changes; not a big money investment; just logical choices.”
Part of ThermOmegaTech’s commitment to their employees was to provide DVIRC training and coaching for this new way of working. “In order to sustain the tremendous value Continuous Improvement provides, 80% of DVIRC’s unique applied learning is focused on soft skills such as high performance team development and leadership development, and 20% on the Continuous Improvement tools and concepts, said Jeff Kopenitz, continuous improvement practice leader at DVIRC.
To date, about 65 percent of the company has gone through at least Level One Lean Certification. The intention is to have all production employees take the level one training, but the company is growing at such a rapid pace, it will take a bit more time to reach that goal.
Kline, with perhaps one of the best breakdowns on what lean continuous improvement is, said, “Once you have the core understanding, it’s looking at what you’re doing and getting the stupid out of it. It’s making the right amount and making it the right way.”
Doing things the right way has made a huge difference in production. When Kline started with the company, the production run batches were about 50 to 100 pieces each run and his team was working a lot of overtime. Now they are producing much larger runs of product, with less overtime.
Doug Snow, VP of Production, remembers when it took 17 minutes to assemble their PartyQ Automatic BBQ Temperature Control. Now that everyone is organized and working together as a team, they can assemble the product in just six minutes.
Lean continuous improvement training also taught them to ensure everyone was cross-trained. “I love that we do that. I like to be moving around. It keeps you awake and energized. It makes you feel good when you see the end result,” said Kristen Agasar, an assembler.
Today, everyone has more responsibility, but that added responsibility has a purpose. Co-workers are excellent at communicating with one another and working together. If there is an issue, everyone works together to solve it. The cultural barriers that used to exist between departments are gone.
Bi-weekly kaizen (continuous improvement) meetings contribute to the increased efficiencies. Employees working in information technology, accounting, and purchasing regularly join employees working in production. In these meetings, they discuss solutions to problems or product improvements. After ten months of doing this, one department had implemented over 300 suggestions.
There are very few mistakes made, but when they do happen no one is pointing fingers and asking who made them. Instead, everyone sits down together to figure out why those mistakes happen and then cooperate to prevent the same thing from occurring in the future.
It is evident to Logue that lean works when he looks at the numbers. In 2009, the employee productivity average was $351,000. In 2015 that number rose to almost $800,000 per employee. During those six years, the company’s EBIDTA percentage grew 3.5 times. Credit for this success also goes to Logue’s business model. In addition to the lean culture of continuous improvement, the model also includes driving Sales, product diversity, product improvement, and development of new products.
“The beauty of this is that I can take off for two months and know that a quality product will go out the door on time. I am not engaged in that process. My role is a strategic one,” said Logue.
Chris Kline and Ed DiPalentino laughed when they remembered that before their lean training they barely even knew each other, let alone talked to one another on the shop floor. DiPalantino is responsible for assembly, and Kline is in charge of scheduling the machine shop. They were the first to begin to communicate.
DiPalantino said, “We broke down the first walls.” Now it seems ludicrous that assembly would not be regularly communicating with the machine shop. Little by little, the silos were breaking down, and teams were figuring out how to take the stupid out of their processes and begin doing things the right way.
When you talk to the employees of ThermOmegaTech today, you would never recognize they were the same group as a few years ago. Where once no one spoke to anyone outside of their little group, now their first instinct is to ask for help when they need it and bring other people to the table to solve a problem. It is this distributed decision making that keeps employees engaged. They feel empowered and in control over what they do. They have pride not only in their work, but in the skills, experience, and thought they bring to the team.
Another key to high levels of job satisfaction at ThermOmegaTech is the value proposition between the employees and company ownership. Part of that proposition is profit sharing, so not only do employees have a steak in their own success and the success of their teammates, but they have a steak in the overall success in the company as well.
Employees will tell you they like working at ThermOmegaTech. In fact, Agasar says, “We all like each other too. We’re like a family.” That is a far cry from the time when people from different departments were not even willing to sit with one another in the lunchroom.
Peterson says that feeling of family increases accountability across the board, “I don’t want to pass you a bad part. I want it to be right so you can do your job. I want you to be successful.”
Through its consulting services, DVIRC has worked with firms of varying sizes and functions on Lean and Continuous Improvement strategies. To learn more about these and other services DVIRC offers, contact us here.