‘The Meggitt Production System takes Lean to a whole new level’ says Helge Huerkamp.
‘With what I know now, I could go back to consultancy and make a heap of money. But if you have the opportunity to make the best even better, why go anywhere else?’
In my time at CAE Inc, I must have done about 12 week-long Kaizen workshops. Pretty much every operational problem you can imagine came up and some great solutions too. But so often, we’d get distracted by other issues before we had time to implement. Later, at McKinsey & Company, we had our standard Lean tools and frameworks that we deployed in 3 months intense project waves.
You don’t know what you’re missing until you’ve got it, of course, but what I realise now is that we didn’t have the full 360° view. At the heart of the Meggitt Production System (MPS) is a set of daily interlocking meetings which cascade information up and down the business, escalating problems and good ideas so they get the attention they need.
Daily layered accountability (DLA), as we call this process, is the glue that holds the many, many components of continuous improvement in the spotlight. At the Meggitt site in Fribourg, Switzerland, the first meetings kick off in each production cell every morning. We run through the same rigorous agenda of safety, quality, delivery, inventory, productivity each day. Any issues are noted down, Living Pareto Boards are updated and anything that needs escalating is taken by the cell leaders to the next meeting. That starts immediately afterwards and also includes representatives from each function.
Using the same agenda, they review and pass on what they find and so on, up to senior management who get a higher altitude view of the whole plant’s performance. We start at 8.30 am and we’re done by 9.30am.
It sounds simple but these meetings have actually turned our approach to OPEX on its head: everyone from sales to compliance and delivery – including top management’s focus on the people who make the product. Poor process, bottlenecks and any other problems are outed immediately because these meetings make responsibility totally transparent. Each of us knows exactly what we have to do and how our work affects others. Making improvements and beating your own record becomes a question of personal pride.
Today, there’s not a single person who wants to miss a DLA meeting. And yet a couple of years ago, we didn’t even know what they were. Fully embedding the process has been hard work and took about a year but there was full support from the start, both here at Fribourg and at group level.
That meant the necessary resources were available and I could go out and find the people I needed. There are lots of highly experienced Lean practitioners out there but most are from organisations where implementation is at a very advanced stage. I needed people who could work in an environment where less was defined. There were only a handful I met who had the spark and energy necessary: one from a hi-tech Swiss medical business, for example, one from a smaller French aerospace businesses and one from Airbus.
A key focus from the start was performance management. I’d seen attempts at getting this right at McKinsey & Company but the tools we have developed here are really delivering.
The first is a monthly review of the one-year plan for the whole site, called SD-Matrix. Thanks to the quality of the data we get from the DLA meetings, we can measure where we are very precisely and fine-tune accordingly.
Five pillars sit right at the heart of MPS, namely, strategy deployment, organisational development, leadership culture, performance management and tools and methods. Progress is measured against set criteria defined across six levels. Before you can move up, you’ve got to hit all the targets across a whole site. It’s seriously demanding. There’s no automatic approval. You’ve got to prove you’re ready.
You have to prove your worth but if you’ve got what it takes, you can move on really fast.
We moved from the foundational initial phase ‘Red’ to the next ‘Yellow’ phase in March 2014 and all 600 of us here in Fribourg joined in the celebrations. We have since move on from ‘Yellow’ into ‘Green’ and recently ‘Bronze’ phase, a continuous journey of improvement across the whole business.
Considering we were the first site to formally launch MPS in the group and the first half of 2013 was taken up with hiring, developing the right culture and reviewing our value streams, I’m proud of how we’re doing. During that review, we realised that although we had five shops on site, we only have three types of customer – sensors and cables, energy electronics, and aerospace systems. Reorganising on that basis meant physically moving 60% of our operations around the site and about 90 people. That was in September 2013 but already we’re seeing big improvements; on time delivery (OTD), for example, is up to 96%.
I believe it’s the unique combination of DLA and our performance management tools in MPS that sets what we’re doing here apart.
But there are other areas we’re focusing on too. Take sales and inventory operations planning. We have transformed our process over the last 4 years and now review our three-yearly sales forecasts monthly. We are reformulating how we translate forecasts into demand for the site and our supply chain.
The goal is to slash inventory by 50% but still keep improving OTD. We’re about half way there on OTD and inventory is down by 10% so, again, progress is good.
In terms of my own learning, I found the 12-month Oxford Leadership Programme hugely rewarding. It consists of three intensives – two at the Said Business School in Oxford and one in Silicon Valley – as well as project work focused on live strategic issues at Meggitt. We present recommendations and an implementation plan to our Board.
Both the content of the course and the networking have pushed me on far quicker than I thought possible and it’s a great example of the kind of opportunities there are here. You have to prove your worth but if you’ve got what it takes, you can move on really fast. It’s partly the culture but also because we’re growing fast.
Looking ahead, our journey to excellence with MPS will again be accelerated by the ‘High Performance Culture’ (HPC) program, which really goes to the heart of our individual behaviors and values. As MPS focuses a lot on the business, HPC is the glue that holds us together, makes us accountable towards each other and really creates an exciting place to work.