Volume 1 / Issue 7 / June 20, 2016
This story is in line with Steve Job’s thinking about the need to look back and identify the “Dots” that brought you to where you are today to better prepare you for the future. In this true story, there are so many Dots and like anything which is organic in nature, the ‘significant Dots of learning’ are so intertwined that a full analysis is hardly possible. See if the following few Dots make sense to and deliver some value, as they did for your editor.
Vision & Leadership is the starting Dot for just about any undertaking. This Dot originated from a respected manufacturing leader over two and a half decades ago. He was a leader with the vision, ability and drive to help others see a better way. This contribution helped launch a unique style of collaboration that is still thriving 26 years later and some of it still lives under the name of the ‘HPM Consortium.’ It derived its energy from the similarly-minded manufacturing suppliers who saw real value in exchanging practical experience, ideas, and know-how in order to build Continuous Improvement Cultures for themselves and their customers.
The leader was Allen-Bradley Canada’s President and CEO, Bill Hetherington who opened the doors of Allen-Bradley Canada to his suppliers who saw, as he did, the value of collaboration that reduced the “Total Cost of Procurement.” In the early 80’s and 90’s his company was a proponent of collaborating with the community at all levels especially in providing sound advice to the College’s advisory committees. He championed the application of new technology and in-plant-developed company processes that always focused on the customer. (Note: Allen-Bradley Canada is now Rockwell Automation and still located in Cambridge Ontario. They have a world mandate for many of their products).
Dot 2 Collaborative thinking
On an early visit to Allen-Bradley Canada in Cambridge, it was surprising to find offices set up with the names of some 12 companies on the doors – all inside of Allen-Bradly! All were referred to as Commodity Managers according to Allen Bradley. This was not normal two decades ago and represented new thinking. It was amazing to see the degree of trust and respect among these companies that all ‘lived together in the 'A-B house’ in Cambridge. They willingly took responsibility for maintaining product levels line-side which meant fewer outages, more constant production, and significant savings. Because suppliers were at hand who understood exactly how their products were being used the benefits were being felt globally by A-B’s customers. Everyone was winning.
This initiative was an indicator of the advanced thinking Allen-Bradley Canada's president had developed in this team and which was put into action by his willing A-B process-builders, Richard Kunst and Paul Deckert. These two deployed one of the first Commodity Manager functions that put control of the supplier-commodities into the hands of commodity experts who really understood them. The resulting rich, in-house training and relationships contributed to the constant influx of new know-how and technology. The close proximity and the win-win attraction for all players spurred overall excitement about being able to better compete and win in the global marketplace. The thinking in this Dot, prepared Allen-Bradley Canada for the enhanced sharing and inter-company learning that was to come with the arrival of the CAD/CAM Centre in 1983 which led to the formation of the HPM Consortium circa 1989.
Dot 3 Divine intervention
This dot emerged from the ugly 1981-82 recession (the biggest ever until 2008) with the insertion of rapidly-assembled stimulus money from the Ontario government. Industry was recruited to assemble the vision for one of the 5 new centres - the Ontario Centre for Advanced Manufacturing (OCAM) that would accelerate the adoption of new technologies and practices for manufacturers and their infrastructure. It was to be practitioner-staffed to help get companies back on their feet rapidly with hands-on skills, know-how and applied technology.
One of the five technology Centres that opened in 1983 was the CAD/CAM Centre was opened in Cambridge, Ontario quite close to Allen-Bradley. Over the next five years, the CAD/CAM Centre exposed Ontario manufacturers to concepts they’d never seen before. It provided hands-on demonstrations of how new skills, thinking and technology could cut costs and cycle times. Centre practitioners travelled to Japan to learn just why Toyota was so far ahead of General Motors. It was at this time that Jim Womack’s team of MIT investigators were gathering data from 17 plants on five continents which would be introduced as Lean in 1990, in the best-selling book The Machine That Changed the World. Hence this Dot confirms the exposure this centre had to real-world manufacturers in Japan, Europe, and the US – and its occurrence alongside the evolution of Lean Thinking. All this meant good value and leverage to those were already steeped in collaboration and TCOP. It unleashed a thirst for continuous improvement among damaged companies that the Centre aimed to heal in the first place.
Dot 4 When one path ends...another begins
The new CAD/CAM Centre’s existence was driven by a Board of Directors drawn exclusively from manufacturing practitioners and included Allen-Bradley Canada and many other area companies who served as demonstration sites to help companies see applications first-hand.
When the CAD/CAM Centre closed in 1988, companies of all sizes had become really excited about the new functionality called Lean and the power of the Toyota Production System. They became anxious to acquire both newer technology and lean thinking and to get it into place to compete.
As we moved into the ‘90s, Lean arrived with Womack’s and Jones’ book, The Machine that Changed the World. Lean went viral in 1996 when Lean Thinking was published. There was keen interest in tapping into the people, leadership and managerial skills needed to apply advanced technology and the applications learned from the Centre’s practitioner-staff. In the late 1980’s, this led to the involvement of the CAD/CAM Centre’s Manager of Educational Programs and Services with Allen-Bradley and their suppliers network. This in turn led to discussions about forming a ‘world-class’ Consortium of non-competing companies that saw real value in learning from each other to advance their march toward accelerated competitiveness. The Centre’s manager became the facilitator circa 1989 of what came to be known as the High Performance Manufacturing Consortium.
This discussion continued in Allen-Bradley Canada's thinking as they decided to support the formation of the first Manufacturing Consortium. The prospective members came together and dubbed their new consortium as the ‘High Performance Manufacturing Consortium' or "HPM." It all came together circa 1990 with the initial members consisting of Eastwood Printing, Gerrie Electric, Peckover’s, Willow Manufacturing, Multilin, Bird Packaging, Bolt & Nut Supply, Hammond Manufacturing, Samuel Steele & Gould Shawmut, and Dueck Inc. Your editor acted as the facilitator who promptly assembled the first fax update since email was not widely available yet.
Dot 5 The weekly FAX update
Sustaining a consortium requires communication no matter the number of members. Companies who had never collaborated in this way before required clear and sustained thought about how to keep everyone focused and aligned on a consistent vision. It was Communications 101 again.
In the case of the HPM consortium, it began with the identification of a vision every company could align itself with. To tie everyone together the Weekly Fax Update served the purpose at the time and it evolved to become The Weekly Update when email became more widely accessible. It was this Weekly Update that spawned interest across the U.S., Canada and Australia which led to the growth of more consortia.
This Dot was all about communication and the importance of relationships. It taught us that each company has a different heartbeat and each is uncertain about the value to expect in a consortium. It taught us that no matter who you are, everyone fears embarrassment. Keeping everyone informed and feeling that they are listened to getting the value they believe they should was a key priority. This required direct conversation.
In other words, this Dot is all about people and the need for time spent getting to know each company one person at a time. It is critical to spend the time needed to get to know the expectations of all participants! Initially, we discovered it can be a half-page or one page communication focusing only on matters of the Consortium that are relevant and instructive.
Dot 6 An open letter that worked
This issue’s ‘TIPs’ to take away: We conclude this eLetter which was taken from the first HPM Consortium Fax Update circa 1993. This issue contained an early vision and mission with detail on the Consortium but, most importantly, it carried this “Open Letter To HPM Consortium Members” written by Allen-Bradley Canada’s President & CEO, Bill Hetherington. It was a leadership letter that was deep in thought, relevant to every member, and very high in value. At any rate, it propelled a new Consortium on its way. Read it carefully and see if there are any lessons of use to your company. Here it is as it was printed:
An Open Letter to HPM Consortium Members
“I think often about the benefits Allen-Bradley can bring to the marketplace and what can be done to sustain our growth and success. As I look to the marketplace, I see many companies with many different advantages and I wonder how Allen-Bradley Canada will compete against them in the long run. When I study our history and culture, it is apparent that our principal distinguishing factor has been our creativity based on a foundation of quality. Repeatedly, we have generated innovations with our products, our selling and marketing techniques, and our operations strategies.
Creativity can apply to all phases of a business, and a competitive advantage can accrue in any area of a company. Here is one idea that came as a creative solution to a problem we were having. To do a better job materials required more people, but, due to business levels no additional resources could be allocated. Purchasing approached our key suppliers, and through discussions with them, and some trial and error, the concept of Commodity Manager was born.
The idea seemed like a natural continuance of our supplier program; eliminating inventory; reducing procurement cost; and bringing the customer and supplier closer together on an operational basis. As it evolves, Commodity Management is turning out to have many more benefits than any of us could have imagined.
This type of partnership which requires a certain level of give and take, can help both parties understand and meet each others need in a continuous improvement context. For the customer, commodity management:
• Provides a natural foundation of effective paperwork, and administration savings
• Reduces material costs on an ongoing basis because the supplier
representative is empowered to pursue concurrent engineering and help reduce
new product design and redesign cost
• Frees up purchasing staff from administrative tasks which enables them
to cultivate other skill in sourcing and product market research
• Improves communication and purchase order placement
• Replicates the supplier development and quality program deeper into
the supply chain
• Provides the opportunity to design preferred suppliers into the product with certain
supply and quality standards in mind
The supplier’s organization can reap benefits as well, including:
• Elimination of sales effort
• Ability to sell directly to engineering
• Efficient invoicing and payment administration, which means less paperwork
• Improved communication and purchase order placement
• Increased business volume
• Ability to leverage resources (equipment and technology acquisition as well, plant loading)
The key element of Commodity Management is not only having a supplier located within Allen-Bradley, but having the supplier empowered within the purchasing function as the link between the customer’s planning department and the supplier’s production plant. Maximum efficiency can be gained by fully implementing the concept and by combining the “planner” position with the Commodity Manager.
Creativity can create a competitive edge. Taking a creative idea – a breakthrough idea – and continuously improving on it can reap benefits that go far beyond the initial concept. For example, the assistance of our commodity Managers has enabled us to embrace the rapid increase in business levels with minimal component shortages.I ask you all to look at the Allen-Bradley experience, perhaps leading you to discover similar advantages within your own company or increasing the benefits to be gained from our commodity management program.
With this quarter’s report, I have included a poster which shows the breadth of the products offered by our Medium Voltage Group. You may want to post it with your quarterly report to allow your employees an appreciation of where the components you supply are used.”
Regards, W. E. Hetherington, President and Chief Executive Officer
There are so many Dots yet to be recognized but glancing back and pausing to revisit the Dots you have come from can provide a new perception of your travels AND produce a new lease on life.
We were saddened when Bill Hetherington passed away in April of 2010.