TOBYHANNA ARMY DEPOT, Pa. -- People, not techniques and equipment, are the key to success in continuous process improvements that lead to business success.
This was the message of Steven Spear, senior lecturer at the MIT Sloan School of Management, during his keynote address at the 4th annual Lean Learning Workshop recently held here.
About 85 Lean business and Tobyhanna Army Depot representatives attended the workshop.
Participants included Dr. John Muka, president of APTOLEAN; Rick Harrington, senior vice president of operations, Raymond Corporation; Paul Brennan, superintendent of the Riverside School District; Ann Marie Millard and David King, both directors of Lean Performance, Sanofi Pasteur; and depot employees Bruce Carey, chief of the Equipage Branch (Systems Integration and Support Directorate), and Eric Dial, process improvement specialist (Continuous Process Improvement Directorate).
Spear's presentation, titled "Creating a high velocity learning organization: Executive imperative for fostering critical thinking", focused on how companies like Toyota and Alcoa, and health care organizations, turned negative situations around or saw through problems in industry to present better products and improve practices.
Toyota worked on building vehicles that had greater reliability but were still affordable, and changed the standard for new model design.
"The standard was four years to bring a new car to market," Spear said. Companies had to retool and introduce new equipment, but Toyota changed that by streamlining the retooling and other processes. This reduced their new car design process to two years, accomplishing what Spear called "bringing value to market with speed".
He noted that Toyota beat Chevrolet to the hybrid market, introducing the Prius 10 years earlier than the Volt, and has an earnings per vehicle of $2,726 versus Ford's $994.
He then profiled Apple, noting that it has a smaller market share than other computer companies, but higher profit.
"These businesses get the same resources and equipment, same cleanrooms, so there is no advantage. So what is the advantage? People."
Spears point is that it is how people are managed and how they are treated that makes the difference, emphasizing that people are the only advantage that companies have.
"The technology is not hard, but people, they are tricky," he said. "This is really a story about people in high performance organizations."
Business leaders and employees have to sort through a natural diversity among people and establish standardization and clarity of processes. Spear said this produces a gracefulness in terms of work producing good results. When standardization is low or missing, or what is expected is unclear, it produces awkwardness in processes.
He highlighted problems in the healthcare industry, noting a hospital that found itself at capacity and failing patients, some of whom were seen wondering the halls. The hospital's electronic equipment was confusing, nurses were having trouble even finding gowns. He contrasted that with Alcoa, a company that produces aluminum products and whose clear standards and processes has led to an injury rate cut from 2 percent to .07 percent, making it safer than the hospital at the time.
"The common root cause of problems is ignorance," Spear said. "Fundamentally it is all about ignorance. The antidote is knowledge."
People should try for perfection in processes. Spear noted common wisdom assumes perfection is impossible, which is not right in all cases, and it is the pursuit of perfection that matters.
"It is easy to say, but hard to do," he said. "You don't have to be perfect from the start. It took Alcoa 13 years (to reach its goals); some companies only took a year. It's about seeing problems and establishing an automatic effort to solve them."
Tobyhanna Army Depot is a recognized leader in providing world-class logistics support for C4ISR systems across the Department of Defense. Tobyhanna's Corporate Philosophy, dedicated work force and electronics expertise ensure the depot is the Joint C4ISR provider of choice for all branches of the Armed Forces and industry partners.
Tobyhanna's unparalleled capabilities include full-spectrum logistics support for sustainment, overhaul and repair, fabrication and manufacturing, engineering design and development, systems integration, post production software support, technology insertion, modification, foreign military sales and global field support to our Joint Warfighters.
About 3,200 personnel are employed at Tobyhanna, which is located in the Pocono Mountains of northeastern Pennsylvania. Tobyhanna Army Depot is part of the U.S. Army Communications-Electronics Command. Headquartered at Aberdeen Proving Ground, Maryland, the command's mission is to research, develop, acquire, field and sustain communications, command, control computer, intelligence, electronic warfare and sensors capabilities for the Armed Forces.
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