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strategy and business
Published: May 25, 2010
 / Summer 2010 / Issue 59

 
 

Herman Miller’s Design for Growth

Muscat (now senior vice president of operations engineering) and others started to question the wisdom of their commitment to batch manufacturing, for which they had spent heavily to build product in lots of 500 or more. At Spring Lake, they had invested in a giant robot assembly that welded supports inside file cabinet housings, including a tractor-trailer-length automated welding line with 1,000 sensors. The Holy Grail of this approach was to drive labor completely out of the process. “Our dream was a ‘lights out’ factory,” says Matt Long, then the head of manufacturing engineering.

But the batch manufacturing approach had created several problems. Some customers had started to reduce the size of orders. They wanted file cabinets in lots of 100 instead of 500. Other customers wanted file cabinets in two weeks instead of six. And many of them wanted much higher quality, the kind apparent in products like the Lexus and Acura cars that were now dominating the luxury auto market.

The Spring Lake plant couldn’t deliver, and certainly not for the lower prices customers demanded. To Muscat and his colleagues who had been raised on the wonders of big-batch manufacturing, the prospect of change was mind-bending. Desperate, they searched for solutions, finally reaching out to the global leader in lean manufacturing, Toyota. Starting in 1995, they adapted Toyota’s leading-edge formula for plant-floor management into an approach they called the Herman Miller Performance System (HMPS).

Having followed these lean principles for more than 10 years, the plant now ships a product in two and a half hours instead of the former 60. It engages 20 people on one assembly line rather than 120 on two. Instead of manufacturing in lots of 500, it manufactures in lots of one. As just one example, a metal stamping machine once took more than four hours for changeovers. Now operators conduct a changeover in about 15 minutes — and are working toward a goal of eight minutes. So adept are workers at what people now call lean manufacturing that the plant has been used as a demonstration site by Toyota itself for many years. Toyota’s inspectors reaffirmed that status in mid-2009.

In implementing the HMPS approach, plant managers across Herman Miller have learned that the best-run plants rely on people, not machines. Only people can solve problems to make assembly lines go faster, run cheaper, and deliver higher quality. As Long (now director of the corporate HMPS team) toured the file cabinet plant recently, a visitor paused by a welding robot and asked, “Why don’t you use more robots?”

“Robots,” Long said, “can’t make themselves better.”

Another lesson that the Herman Miller team learned from the lean approach was the importance of reducing waste — waste in space, cost, material, motion, process, and inventory. In the world of lean production, “waste” is anything that doesn’t yield customer value. At some companies, managers make periodic stabs at cutting waste. At Herman Miller, they make a practice of it daily.

Muscat, Long, and others then spread the essence of the lean production system to all Herman Miller plants. Meeting demand for the company’s best-selling Aeron ergonomic chair required five assembly lines back in 1998. Although the lines could collectively make several thousand units per week, they covered 27,000 square feet (2,500 square meters), and employed 77 people in three shifts. Now Herman Miller has equal or greater production capacity in a mere 2,500 square feet (230 square meters), using 24 people in three shifts on one line.

 
 
 
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Resources

  1. John Berry, Herman Miller: The Purpose of Design (Rizzoli, 2009): A definitive history of the company’s continuing collaboration with some of the giants of modern design.
  2. Kevin Dehoff and John Loehr, “Innovation Agility,” s+b, Summer 2007: How to build the capability to manage a large, global product development portfolio and consistently deliver winners.
  3. Max De Pree, Leadership Is an Art (Dell, 1990): The former CEO on why a leader should recognize human diversity and make full use of his or her employees’ gifts.
  4. Kaj Grichnik and Conrad Winkler, with Jeffrey Rothfeder, Make or Break: How Manufacturers Can Leap from Decline to Revitalization (McGraw-Hill, 2008): A guide to emulating companies like Herman Miller.
  5. Art Kleiner, “Leaning Toward Utopia,” s+b, Summer 2005: Lean production experts James Womack and Daniel Jones talk about how the system has revolutionized industry and can transform the world.
  6. Tim Laseter, “An Essential Step for Corporate Strategy,” s+b, Winter 2009: Though often missing, a formal operations strategy can guide the crucial decisions that build competitive advantage.
  7. Richard Verity and Chris McNally, “Virtuous Connections,” s+b, Spring 2010: How a fine-tuned supply chain can improve performance throughout an organization.
  8. For more thought leadership on this topic, see the s+b website at: www.strategy-business.com/strategy_and_leadership
 
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