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CASE HISTORY

New Balance Manufacturing System


Emphasizes the Human Side of Lean
Summary: New Balance is the only major athletic
shoe company that continues to have domestic
manufacturing operations. Their factory in Lawrence,
Massachusetts, is one of five U.S.-based plants where
managers and teams are implementing the practical
principles of Keir Carroll’s “Leading and Motivating”
workshops as part of their New Balance Lean
Manufacturing System (NBLMS).

Keir Carroll & Associates


61 Fales Street
Worcester, MA 01606
Phone: +1 508.414.3959
Web: www.keircarroll.com
New Balance Manufacturing System
Emphasizes the Human Side of Lean
If there’s a major shoe company that
marches to a different beat, it would
surely be New Balance.

Based in Boston, Massachusetts, the


company made their first pair of run-
ning shoes in 1938, and today they
employ more than 2,800 people around
the world.

New Balance describes their products as


technologically innovative performance
footwear for women, men, and children.
That includes shoes for running, walk-
ing, training, basketball and tennis, as
well as cleated and kids styles.

New Balance has developed a loyal and


dedicated following by focusing on “fit
and function” and continuing to offer
shoes in differing widths. And they have
built and maintained their business
through brand loyalty and word of
mouth, rather than through high-profile Production manager George Skafas points with pride to the “Wall of Fame” which recognizes
advertising and celebrity endorsements. employee contributions that help make lean manufacturing work at the New Balance plant in
Lawrence, Massachusetts.
More importantly, they are the only
major manufacturer still making ath- tions on a single floor, defining the flow process through the production
letic shoes in the United States. production process in very specific cycle. As is typical for this type of
New Balance operates two plants in steps, tracking workflow, and achieving “just in time” manufacturing, parts
Massachusetts and three in Maine, with stability in their operations. are delivered where they’re needed as
approximately 25% of the shoes they they’re needed. Maintaining proper
sell in North America made or assembled Today that manufacturing operation workflow is critical, which certainly
here – some 7 million pairs a year. And occupies the brightly lit second floor in means producing product to keep pace,
the New Balance Lean Manufacturing a rehabbed industrial era brick building but also means not producing too fast
System (NBLMS) makes that possible. that sits alongside the Merrimack River. or too much product.
On one side of the aisle, teams or “cells”
Lean Manufacturing Initiative make shoes from start to finish using It’s lean - With a difference
To stay competitive in a global domestically produced parts, while In its technical respects, their imple-
market and as a way to continue to on the other side the teams do final mentation was typical, George says,
manufacture products domestically, assembly and finishing that includes but it’s their emphasis on the human
the company began implementing its components from overseas in an side that distinguishes New Balance
lean manufacturing system in 2004. operation that is called “closing”. from many of the companies that have
Production manager George Skafas implemented so-called “lean” systems.
credits New Balance’s vice Employees follow a specific series of
president of manufacturing, John steps that are designed to minimize He describes NBLMS as a hands-on,
Wilson, for setting this in motion. waste, optimize output, and achieve tacit learning system. “You’re actively
a steady flow of product through the involved on the shop floor in applying
The effort began in the company’s manufacturing process. The whole the principles, and those principles
Lawrence, Massachusetts, plant with an factory operates on the concept of are certainly in line with our company
initial focus on logistical considerations “takt” time, which is basically the pace culture prior to this implementation,
like combining manufacturing opera- of the work as it follows a single-piece which is very people focused.
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“Our leaders, Jim and Anne Davis, are Motivating” was held at Lawrence in both the operational principles and the
exceptional people, and they have April 2008 and was open to general underlying rationale into people in the
definitely committed to domestic managers from all five domestic plants. plant.
manufacturing. As we lean the process
and make more with fewer people, no George attended that session with his “It boils down to effective leadership
one has ever lost their job. That’s the boss, Lawrence plant manager Claudio skills, to choosing not to put your entire
commitment to the people. Gelman, and, based on their experiences, faith into the mechanical aspect of
they decided that they wanted all making the system work, but rather
“That has to exist if you’re going to have of the company’s plant managers looking at what makes people care about
a successful lean implementation. People and supervisors to take part. They the system.”
can’t be threatened by the fact we’re commissioned a second L&M workshop
doing as much or more with fewer of us exclusively for manufacturing that was Leadership learning
and be wondering ‘What’s happening to held in November 2009. At a practical level, managers learn how
me?’ They have to feel safe that they will to influence outcomes through the use
have continued employment here. “I highly recommended it, and fortu- of Positive Immediate Consequences
nately, upper management responded (PICs) and Negative Immediate
“There isn’t any question here from favorably to it.” George relates. Consequences (NICs). This works
any of our people, even during some in concert with providing objective
difficult times when business may have “Production managers, plant managers, feedback on how close or far you
been off a little. No one is ever laid off at and HR representatives all attended this are from being on target.
New Balance,” he says, adding that the second training that Keir provided.”
company’s workforce has been steady “Feedback by itself should be inherently
for three years. Human side of change fact-based or informative, without
Among the topics that Keir covers in the emotional overtones ” Keir says,
“From the seat I sit in, I have a com- Leading and Motivating workshop are “You’re just learning what you did
parison. ‘Lean’ is a like a diet plan. There communication, feedback, positive and right and what you did wrong. It’s the
are so many versions out there focused negative reinforcement, and change consequences that go along with the
on losing weight, and if you commit and management – with a particular feedback that make a difference in
have the discipline to follow any one of emphasis on the latter. how people react and behave.
them, you will lose weight. Of course,
there are similarities among the basic “In the short term,” he says, “people “If I say ‘Thanks’ along with the
principles of the various systems, but it’s usually see change as just ‘new stuff’ feedback, that’s the consequence. You’re
the way you go about implementing it which either entails more work or a getting something positive directly
that makes a difference.” less familiar – and thus less comfortable connected to the very specific feedback.”
– kind of work. But people are generally
Workshops in leading and motivating adaptable to change over the long term, “The workshop gives people the
To help with the human part of the and part of what I bring to the party opportunity to take these very simple-
equation, New Balance has provided its is how to get people into that thinking to-understand but difficult-to-put-into-
managers and HR professionals with – and love doing it.” practice ideas and then apply them in
a series of workshops on Leading and little chunks to real life things. During
Motivating, Creativity, and Conflict What sometimes gets overlooked, Keir the workshop, participants get some
Communication presented by Keir notes, is the necessity of favoring the practice in specifying the behaviors
Carroll, a consultant with many years’ human side. and actions they want from others. The
experience in the field, who has worked road map is getting clarity on what you
with many of the world’s top “If there’s a choice between bringing want them to do, say, or deliver – and
corporations. in a new technology or getting a small noticing them whenever they do so.
group of people together and having
His firm, Keir Carroll and Associates, them figure out a better way of doing “The culminating exercise in this
specializes in designing and delivering business, it often pays to do the latter. workshop brings the learning right
fastpaced, practical, and highly enter- People are always more willing to make to where you live, right to the heart.
taining learning experiences that the thing work if it’s their idea in the In a very short period of time, people
boost leadership and communication first place,” he says. experience what it feels like to work for
skills throughout organizations. These a leader who is adept at that program
custom-designed workshops integrate “Companies also need to realize that and discover why the three other styles
ideas, reflection, skill practice, and lean manufacturing is as much – or of ‘leading’ don’t work to motivate.
instrumentation. more – of a psychological system as it
is an engineering system, and that it “Then we debrief on what it was
The first workshop on “Leading and takes time, energy, and focus to instill like to work under those different
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circumstances. What’s amazing is the award at the $15 level that comes with have always been exceptional. Ninety-
power of the emotional response in coupons for coffee at Dunkin’ Donuts or six per cent say that they know what is
people with an exercise that takes movie tickets, to the “Bravo” level with expected of them, that they have the
no more than five minutes. They can monetary rewards from $25 to $100, tools that are necessary for them to
imagine what it’s like to work under the on up to “All Star” and ‘Team of the be successful, that they’re listened to,
different conditions day-in day-out, Quarter” awards. that they’re communicated with, all of
week-in week-out, month-in month-out, those things that go toward making a
year-in year-out. George Skafas says, “Keir has the ability collaboration work.”
to take these basic concepts and present
“They emerge from the workshop with them in a way as to really make an Team involvement
an almost excruciating self awareness impression. He’s a remarkable trainer, “With any of the improvements that we
about how the slightest action from a and he has the ability to inject people make on the shop floor, we have kind of
leader can have grotesquely dispropor- with enthusiasm. a tradition if we are going to go through
tionate effects on the people around a re-balancing process. Let’s say you
them, either to motivate or to de- “But I think the real motivating factor have a 6-person cell and we find that we
motivate.” out here is that fact – and that goes can do the same work with five people,
along with Keir’s training – is that not by asking anyone to work any
Encouraging good habits we’re thanking people for doing what’s harder, but by asking you to eliminate
“Your job as a leader is not only en- expected of them. the waste in your process.
courage habits that build success, but
also to discourage habits that fight “What Keir has pointed out in his “We would meet with that group for
success, which means your job is to training is, not just for doing a good a half an hour and we show them the
notice behaviors, notice habits. The big job, but specifically for what you balance charts, explain to them that we
thing is we change other people’s habits, did that you get the recognition for, expect that there will be problems and
not by changing what they do but by and pinpointing it right at the time. that we don’t have the answers, and
changing what we do. It’s a quite remarkable concept, this that they know best on how to deal with
pinpointing. It’s a perfect complement these problems. We need their help,
“In manufacturing, people are pretty to the management system and the we’ll be there to support in management
good about delivering the bad news, manufacturing system that we apply and supervision and engineering and
because it usually sticks out like a sore here.” technical help, and we wish to meet the
thumb. If something stops the line, that first degree of stability.
becomes a trigger, so that I go and fix it, Making it measurable
because that’s how I’ve been brought up, On-the-spot recognition has become one “During these meetings, it’s required,
to solve problems. of the key items that the manufacturing we want everyone to touch it. What are
group at New Balance tracks in its your thoughts? What are you thinking
“But if something goes right, the ten- daily project management and general going into it? What did you learn after
dency is just to carry on. What I’m operations meetings. They’ve even gone the activity.
trying to do is to get them to say, okay, so far as to incorporate Keir’s ideas
something going right is a trigger to on recognition into forms that were And usually, in a humorous way, are you
go and find out how and why it went developed in cooperation with the HR ready for the next one? Always setting
right and reinforce it – then and there department. the stage.
or as soon as you reasonably can – so it
goes right again in the future. And that “We’re trying to live this concept here “Involvement in this type of a process
should happen on the spot, specifically in New Balance,” George says, “and helps everyone focus their thinking
pointing out what it’s for.” we’re trying to find a way to actually toward getting waste out of the system.
measure. One of the fifteen reportable Our people are tremendously respon-
Recognizing employee contributions items or measurables that we have, sive at this stage. They have all been
New Balance has incorporated this is ‘Who did you recognize today, and through numerous changes in work
concept in their system by setting for what reason?’ It’s the concept of content, and they expect more of the
up a very specific rewards structure pinpointing exactly what the person is same.”
that includes immediate positive being recognized for.
reinforcement by team leaders and The Wall of Fame
peers, which is underlined by the “We’re very focused on motivating New Balance has made it a priority to
company’s formal recognition program. people – ordinary people doing gets 100% participation in the process
extraordinary things – and it’s also of waste reduction and continuing
That includes various award levels about satisfaction. Once a year we do an improvements, and all of the employees
coupled with monetary incentives associate survey. It’s done throughout have their contributions toward
ranging from a simple “NB Thanks” New Balance, and typically, our results improvement recognized on the
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company’s Wall of Fame, where their Spreading the word Spotlight on leadership
photos are posted at the entrance to the The experience of the Lawrence plant Keir Carroll applauds the fact that
shop floor. has become a good reference model that George and Claudio have taken these
the company is now working to share concepts to heart and are putting them
“Every associate on the shop floor with all of its domestic manufacturing into practice in the real world.
is actually required to come up with operations.
a documented improvement to the “Of all the things you do as a leader,”
process every year, and we usually “Our plant manager, Claudio Gelman, Keir concludes, “you can outsource or
average four ideas per person for the and I have both attended Keir’s training delegate many things, but you can’t
year,” George says. sessions, and we’re trying to spread the outsource or delegate motivation. That’s
word to the other domestic managers,” because you’re always in the spotlight.
“We explain the steps and what that cost George says. Whatever you do or say shows up in
and what that benefit is. So, when we the lives of the people around you as
talk about our continuous improvement “Having had that training, we took some something they like or something they
environment, we’re talking about of the concepts that Keir taught and don’t, i.e., positive or negative
everyday simple waste reductions that thought that it would be a good idea consequences.
drop by drop overflow that bucket and to share this common language and
create that thinking process of how do common philosophy with the rest of “Peter Drucker said leadership is
we eliminate the waste. That’s what our the management group. One of the next getting action through others. What I
goal is. steps that we just accomplished want to help managers learn is how to
is to have all of the manufacturing gain willing action or enthusiastic action
“Now it’s a matter of, ‘Okay, what are we managers and HR groups attend the through others. But it’s not the art of
all going to do about it?’ We have added training. persuasion. It’s about using objective
this to our daily agenda. It’s a reportable measures and positive and negative
item. We’re expecting that people pro- “We’re trying to spread this thinking consequences to motivate them to do
vide this positive reinforcement on a throughout our entire organization and this stuff and de-motivate them to do
daily basis and report on the results.” pass it down, not only from managers to that stuff.
supervisors, but from supervisors to our
Evolving management style lead people and also to our associates. “It’s easy to understand but very hard
“Keir’s training in clearly defining We also have a program where associ- to do. You need discipline, you need
the difference between feedback and ates are starting to recognize their attention, and you need to change a lot
motivation led me to look at things a lot peers. of your own beliefs about people, too.
differently in my own style in dealing Sometimes, it also means confronting
with our associates,” George adds. “We’re trying to develop our people and people who are not doing a good job,
also coach them to be motivators and and most of us are pretty uncomfortable
“You know, even with the best of in- improving their soft skills. They’re about that and find it stressful and
tentions, providing feedback it’s not interacting directly with other associ- miserable.
always well received. There’s a time for ates, so we’re trying to make them
it for improvement, but maybe what stronger. So this concept of positive “None of these things is as easy as it
you’re looking for in a peer group is the motivation and pinpointing is sounds. Which is why it matters to
positive reinforcement and ‘Why am I something that we are passing down.” have a system, a structure, a schedule,
going to continue to do more of a timetable. What George and Claudio
the same?’ As a leader in implementing lean have done that is brilliant is to make
manufacturing, the Lawrence facility the behavior of delivering positives a
“We’ve tried to recognize that in our- gets a lot of requests from other ‘reportable’ item. They’ve built it into
selves and pass it on to supervisors companies for tours. what they’re doing.
and actually the flow coordinators
in working with their people. It’s a “Visitors are impressed with what they “That’s what distinguishes any
powerful tool, and it doesn’t cost a see on the shop floor,” George says, “but really effective company from other
nickel. It’s all the things our mothers it’s the culture in particular and the companies. The other companies will
taught us. That’s the wonder of this involvement of the people that stands give lip service to any fad that comes
system. out, especially in comparison to what down the road, but the effective ones
they’ve seen in other plants. What we’ve build it into their systems, into their
“So, we’re reaching out continually to been able to do as far as involving our processes. And that’s what New
our people and we’re trying to motivate people and culture they find to be quite Balance has done. They’ve baked it in.
them and recognize them with this remarkable.” They’ve done a beautiful job.”
thinking and training that Keir has
provided.”
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About Keir Carroll & Associates
We are Experts in Leadership Learning™ executive sponsorship, role-modeling,
who provide dynamic learning experi- reinforcement, and recognition, just
ences specifically designed to meet your to name a few. But what counts is that
organization’s leadership development these elements are carefully crafted
needs. ahead of time and rigorously monitored
along the way.
Established in 1985, our firm specializes
in designing and delivering fast-paced,
practical, and hugely entertaining learn- About Keir
ing experiences that boost leadership Born in England, Keir Carroll holds mas-
and communication skills throughout ter’s degrees from Cambridge University
organizations. and Boston University. He has taught at
Boston University, Suffolk University,
We see Leadership LearningTM as a and UNC (Chapel Hill).
process rather than an event or series
of events. We are your colleagues in As a management consultant and
designing experiences, over time, where trainer, he has been on the faculty of
leaders and potential leaders have the the world-renowned Center for Creative
opportunity to reflect, to experiment, Leadership, as well as the Rensselaer
to translate ideas into practical actions, Learning Institute and the prestigious
all with the right balance of support and Center for Executive Development.
stretch.

Our custom-designed workshops in- A team approach


tegrate ideas, skills practice and in- Keir leads a global team of seasoned
strumentation. They are an important professionals with backgrounds in lead-
part of leadership development, but ership development, program design,
workshops alone rarely lead to behavior workshops, instrumentation/metrics,
change. and coaching.

The Leadership LearningTM approach Each member of our team has specific
creates a customized learning strategy expertise in his or her own right. Collec-
that transforms noble aspirations into tively we have consulted and conducted
practical action. Elements of the strategy programs on six continents with many
might include Action Learnng, one-on- of the world’s leading companies and
one coaching, peer support, networking, institutions.

Keir Carroll & Associates


61 Fales Street
Worcester, MA 01606
Phone: +1 508.414.3959
Email: keir@keircarroll.com
Web: www.keircarroll.com