Summary

As the VP of Corporate Strategy at Tacony, Nick Hinman’s focus is on maximizing the customer experience while ensuring the business continually improves. Over the years, he has become an expert in all things lean, culture, and value.

In this episode of Zen and the Art of Manufacturing, Bryan Sapot and Nick sit down to talk about building the house. What does that mean exactly? Well, to build an exemplary company, you need to start by creating a road map and then begin laying the foundation. Using data to improve, a great culture, and transparency, are all things to be established for the company upfront.

Listen in as Nick share’s his experience with firefighting and how manufacturers can transition from constant firefighting to something more sustainable. And, finally, Bryan and Nick discuss focusing on the small wins, building trust throughout the organization, and daily morning meetings, all contributing to the success of your improvement efforts.

Transcript

[00:00:00] Bryan Sapot: Welcome to the Zen and the Art of Manufacturing podcast, where we learn about how to create calm in manufacturing. We focus on culture, developing people, continuous improvement and technology with an emphasis on quick wins and real information you can use to master the fundamentals and build a world-class manufacturing organization.

[00:00:16] BS: So today we have with us Nick Hinman, who is the Vice President of Corporate Strategy at Tacony in St. Louis, Missouri. And he works closely with Tacony’s executive leadership on strategic corporate projects, focusing on areas of network optimization, M&A, target evaluation, and continuous improvement.

[00:00:34] BS: It might seem odd to have a VP of Strategy on a manufacturing-oriented podcast, but Nick, you have a long history of working in manufacturing and lean and things like that.

[00:00:48] Nick Hinman: Yeah. Yeah. So prior to taking my current role at that Tacony, that was majority of what I did was manufacturing, lean, continuous improvement and efficiency work.

[00:00:56] BS: We’ve known each other for, I guess, five or six years now, how did you end up in the supply chain organizations of the different companies that you’ve worked for?

[00:01:05] Nick Hinman: Yeah. So I actually started my career in finance and after working for a trading company for a couple of years, I just took a leap of faith to drive a little bit more value in what I was doing every day.

[00:01:17] NH: Naturally it kind of got me into operations and my dad was in M&A and operational type work for a long time. So I kind of had an understanding about, you know, how companies operate and the value that process and different things can bring to the organization. So I took a job as a business analyst and through that opportunity, I was just put on a bunch of different projects that had a lot of different operational focuses or experience associated with them.

[00:01:48] NH: So I worked as a buyer for a little bit, ran a warehouse, did different things and kind of was a placeholder that just supported different corporate projects, which ultimately kind of morphed into supply chain, manufacturing and operations. So it was just really kind of a luck thing. And it was, I worked with all those different opportunities in different projects.

[00:02:09] NH: Then I just really fell in love with the idea of driving value, but also finding a better way to do things and just seeing how those improvements helped the business, but also helped people and really drove the culture of those businesses which provided that leadership kind of opportunities. And really just honestly, I just enjoy seeing the successes of operational.

[00:02:32] Bryan Sapot: So where did you learn? Did you kind of learn all of this on the job?

[00:02:38] Nick Hinman: Yes, reading a lot of books, talking to a lot of people, but then from a lean perspective, I did have the fortunate, you know, opportunities to work with a couple of different consulting firms and some practitioners that had a plethora of experience in different industries, and those opportunities and those experiences, those conversations really just helped me kind of put the pieces of the puzzle together.

[00:03:02] NH: So taking that, that opportunity of working closely with consultants, but then also having the ability to have all the different experiences that I’d had up to that point. It was easy for me to kind of meld the two together and really kind of start to develop a lean understanding if you will. That to this day,

[00:03:19] NH: I think is honestly enabling me to keep learning. Right. And, and that’s the beauty of it. But lean for me is one of those things that you just kind of get it, but you really don’t get it until you’re able to put it into action.

[00:03:31] Bryan Sapot: Yeah. Like you kind of don’t understand it until you see.

[00:03:34] Nick Hinman: Correct. Yeah. You’ve got to almost, you’ve got to be involved in it to really understand it and to be able to talk it and then ultimately be able to teach it.

[00:03:42] Bryan Sapot: Yeah, that makes sense. The more I see, the more I realize you have to see it and do it to understand it. Kind of the thing that I wanted to focus on with you today was maybe even a theoretical lean journey in a company, or even if you want to pull examples from, you know, where you’ve worked. What I’ve seen over my career in manufacturing is there’s a lot of places that are busy, fighting fires all the time.

[00:04:06] BS: And they don’t don’t feel like they have the time to stop and improve things. Right. Cause they’re constantly trying to get stuff out the door. And being reactive to what’s happening. So if you walked into one of those places, either as a new employee or you bought a place, or even as a consultant, where do you start?

[00:04:22] Nick Hinman: Yeah, so I think firefighting is everywhere, right? I mean it’s not just on the manufacturing floor or in the distribution warehouse. You know, it kind of starts at the front end and in that kind of culture permeates throughout most companies. So from an operational perspective, you know, if I was to walk into a plant, the first thing you kind of start with is just observing the people and just kind of the pace of work, right?

[00:04:44] NH: Because the first thing your mind is going to go to is, you know, what does this person do? What is their risk? And then you just kind of sit back and observe what they’re doing in relation to what they’re supposed to be doing. Right. And that answers a lot of questions right away. That ultimately opened up a conversation of, well, I noticed you were doing this when you should have been doing this, or how come you walked over and asked that person five times in the last 10 minutes for something.

[00:05:09] NH: And, those types of observations are quickly then linked to the rest of the operation, right? If one person is doing that on one line, you quickly then see that that’s happening on additional lines. You can see it with material handling. It then even works its way back into the scheduling and the leadership perspective of a plant.

[00:05:27] NH: So a lot of the times when you walk in it’s, it’s more of a, you know, an observational period, because if you’re quick to judgment, you almost go into it formulating a previous experience that may not be realistic to what’s going on in that particular situation.

[00:05:42] Bryan Sapot: Okay. So then after you’ve kind of observed.

[00:05:46] BS: This situation. And I mean, I can point out a couple of things, I guess, just by listening to the story of things that could be fixed there, but you know, where do you go next from that? So you’ve done your observations. You kind of see where, you know, maybe there’s redundancies and waste in the whole process, but what’s next?

[00:06:03] Nick Hinman: Yeah. Next is, is conversations. Right? So, so really getting with the management and the leadership team to understand and get their viewpoint of what they think their challenges are. And what’s holding them back from reaching those goals, whether it’s inventory reduction, whether it’s an increase in throughput reduction in head count, you know, utilizing space whatever it might be, it, those conversations are critical to developing the roadmap, right?

[00:06:27] NH: And then from those conversations, you put down a game plan. And in that game plan really is in stages associated with the simplistic things that come along with lean. So the way that I would approach it is, again, you put that game plan together. And in those phases, in those milestones, you kind of determine easy to difficult.

[00:06:48] NH: And that then puts all the detail around those open lists of things to do. Right. So if we’ve got to do 5s. Okay, well, that’s obviously a huge undertaking. What does that look like in this plan? And then you put that detailed plan together. You start to then also develop a train the trainer program right out of the gate.

[00:07:07] NH: Right? So the first thing you want to make sure is that that team has a structure in place. It has leaders. And from there you start having conversations with those leaders about, okay, what do you know about 5s? What do you know about waste reduction? What do you know about spaghetti mapping? All of those different things that ultimately need to be done on that journey of getting you to where you want to go and mapping that process out, getting that structure in place, and then teaching people.

[00:07:34] NH: Through show or through PowerPoints, whatever it might be to, to engage with them. Because, you know, as a leader, that’s not there on the shop floor, maybe as a consultant or someone that doesn’t necessarily work in that particular building all the time. It’s very difficult to come out and implement change without really proving yourself the understanding and building those relationships.

[00:07:56] Bryan Sapot: Okay. So proving yourself, meaning that you understand what you’re doing, but at the same time you understand the operator, you understand the people you’re working with. You’re not making decisions based upon previous experiences or what, what a lean book tells you you should do.

[00:08:12] Nick Hinman: You’re really applying that fundamental logic to the application at hand. Right? So just because it says you need to have so-and-so or you should be doing, you know, the work instruction or the cycle time. And the bill of materials is saying, you know, you should make this every five seconds. If that’s theoretically not what’s going on, you mandating that right off the bat to someone is ultimately going to have them shut down.

[00:08:34] NH: So building that rapport is critical out of the gate with that end goal in sight, in that roadmap to show them how to get there. So if we’ve made it a little bit more concrete to like a common issue that folks have, that we talk to is they have unplanned overtime, right? You’re running overtime because you’re trying to deliver on time to your customers.

[00:08:55] NH: You know, you’re looking at totals for the week and then having to add a shift to half a shift, something like that on the weekend, you want to get rid of that. Cause it just eats into your margins. Then maybe that’s my biggest issue. So, what’s the roadmap look like for an issue like that. So the first thing you’re going to go to is, what is your efficiency?

[00:09:11] NH: So let’s take out the fact that you have a ton of demand that needs to flow through that plant. You really need to establish what is my current cycle time, and then back your way into the demand requirements from a forecast perspective or affirmed demand of PO to establish the takt time. From there, that ultimately tells me we’ve got to go from X to Y really quickly.

[00:09:31] NH: And how are we going to get there? And the first thing most people do to mitigate over time, Bryan, is throw resources at something. So pull someone from another line, go hire somebody. But all you’re really doing is robbing Peter to pay Paul in that circumstance because unless you’re overtime is a really small portion, a couple of hours a week.

[00:09:49] NH: You may not, you know, it may make sense to run overtime rather than to go hire a person. But a lot of the times, it’s that disconnect between the cycle time and the takt time. And a lot of those conversations had to start with forecast or demand and what was told to the customer versus the reality of the situation.

[00:10:07] NH: And I think there’s a big disconnect in most operational businesses between the front end and the back end of the house when it comes to customer satisfaction. And ultimately that customer experience, the disconnect being front of the house, promising something, the back can’t deliver or front of the house, not connected with back of the house, from a forecast and just an overall capacity understanding, right?

[00:10:28] NH: Just out of the gate, you know, we’re, we need to make a hundred widgets a week every week. Well, we’re only staffed to make 75. And if that’s the case, you have to then go to the 75 and say, how efficient am I at making 75 with the current amount of people I have, because right away, that doesn’t mean that we have to go back to the customer and tell them, “Hey, instead of getting you the a hundred, you, we promise you, we can only get you 75,” as an operational leader.

[00:10:53] NH: You need to go to that 75 and see, “How efficient am I being in that time?” And that’s where most of the focus for me is as an operational leader. It’s not just any efficiency there, there’s a lot of metrics that you can track. But the key metric that I focus on is that efficiency number. What, what am I controlling that I can control?

[00:11:10] Bryan Sapot: Yeah. Tell me a little bit more about that. What do you mean? What am I controlling there?

[00:11:13] Nick Hinman: So what I mean by that is that I can only control how many widgets my team makes given the operation that we have at hand. Right? So I can’t control how much a customer is going to order. I can only control how many widgets that we get out and how efficiently we get it out.

[00:11:28] NH: If I’m hyperly focused on, you know, what I can’t do, then I’m not going to be focused on what I can do. So that’s where those metrics that I look at tracking are really simplistic, right? Red and green. Did I get out the widget I was supposed to get out on time? If I did, great. Right. And then the operational side of that, and the management side of that are two different things.

[00:11:49] NH: Operationally, let’s execute on what we can execute on. Management-wise we need to go handle the customer expectation, completely separate of the operational floor, you know, because that’s where you get the disruption. And to your point, strategic and the executive leadership usually come in and say, “This needs to get out for this customer no matter what happens.”

[00:12:07] NH: And typically, yeah, that tends to permeate the firefighting situation. And you see that in a lot of, you know, a lot, a lot of businesses where, “This is our biggest customer, I don’t care what it takes, but get this out.” And that’s ultimately where you start running into things that impact your performance number, which is your quality, which is your scrap rate, head count, inefficiencies.

[00:12:26] NH: All of those things bundled into that. And it’s quick to quickly surface that up. Right?

[00:12:31] Bryan Sapot: Okay. If you’re walking into a place where, you know, you’re looking at a firefighting situation and you’re building out this roadmap to try to, let’s start to minimize the firefighting, right. Talked about the specifics of overtime as being one example.

[00:12:45] BS: How do you transition from that into kind of building something more sustainable, you know, that improves over time?

[00:12:53] Nick Hinman: So start simple, right. Start really simple. Start showing that roadmap. And in that roadmap, you have detailed objectives of little things that ultimately are going to help you reach your goal.

[00:13:04] NH: Right? So that’s really the defining part of that roadmap is working with that line lead or working with that operations manager to really make sure that all the small things are noted in as objectives in that roadmap so that you can quickly show, prove to the team that those subtle little changes are adding up as key wins, which ultimately gets you to the end.

[00:13:29] NH: Right? So it’s really hard for people, especially those that have worked in manufacturing plants for a long time to accept change, everybody knows that, right? And when a guy comes in from corporate that’s here to quote unquote, “help”. A lot of the times, the first thing people do is they’re not going to tell you the truth and they’re going to be very reluctant to listening to you because you just don’t know.

[00:13:49] NH: And that’s natural, right? For any of us, not just manufacturing. So to win those people over from a leadership perspective, you’ve got to show this simple, small wins and ultimately start, you know, showing a scoreboard. And a lot of that is with, you know, a whiteboard or a chalkboard at the end of the line that shows, you know, we’ve got to make 10, “What’d you make today?”

[00:14:10] NH: And then you have a conversation about your shortfalls and then those shortfalls then are reviewed in that detailed list of, Okay, well we’re working on this, right? We’re trying to get better at getting the job to the line faster, by making sure you have enough material in your bin so that you don’t have to waste time.” By showing and then delivering on that, that ultimately gets people to buy-in.

[00:14:31] Bryan Sapot: How are you, how do you share that information amongst the group? Cause you can’t do the whole plant at once. Right? So like how do you kind of start small there and then share those wins?

[00:14:40] Nick Hinman: Yeah, that’s a great point because you always got to start small. I mean, if you walk into it and try to change a whole plant at once, it’s not going to work, there’s going to be too much to get done, too many people to manage, and that’s just too big of a change at once to be frank with you.

[00:14:53] NH: And that was one of my challenges when I first started, because I just didn’t, in nature, have kind of an aggressive personality and I like to see things get done quickly. Because, you know, when you do it once it clicks real quick, right? It’s, it’s very applicable to a lot of situations. So you have to select a line.

[00:15:12] NH: And usually it’s a line that you work with the leadership team that says, “Okay, it may not be the line that has the biggest issues.” It’s usually the line that people are the most comfortable knowing that it’ll be successful, and that the people that are associated with that have the rapport amongst the rest of the group, that the group will follow.

[00:15:29] NH: So if they see you being really successful, Bryan, as a long-term employee, or as someone that maybe had a reputation as being, you know, disgruntled or reluctant to change, and I can come in and I can get you to buy-in. That’s an easy, easy way for me to take on the next line and the next line.

[00:15:51] NH: And then everybody starts to buy it. Right. Because everybody starts seeing that line one doesn’t have to run on Saturdays anymore. “I want to be like line one.” Right? The overtimes nice to a point. So getting that buy-in from people is critical, but doing it again in a simplistic, successful way is really how you get people to fall in line with your journey and your ultimate goal.

[00:16:13] Bryan Sapot: Yeah. That makes a lot of sense. It seems to me that, I mean, I’m a technology guy, right? So I always look for technology solutions there, but it seems to me that all of this, it’s a people and a culture thing, right? If you can build this trust and this sort of engaged culture, change is much easier to affect in that environment than it is somewhere else.

[00:16:33] BS: Like this situation that you described, where people aren’t going to tell you the truth, they don’t really want to change, they don’t want to be called out.

[00:16:39] Nick Hinman: Yeah. I mean, you’re a technology guy, but to put it in technology terms though, you know, how you build a technology software is with programming, right?

[00:16:47] NH: So the ultimate thing at the end of going through all of this and learning, and then establishing is putting in a sustainable program. Right. And you have to have standard processes that are documented because if you don’t have those, it’s very hard to hold people accountable and to control the environment that you’ve put in place.

[00:17:06] NH: And that’s one of the challenges with lean and that’s where you see, most of the time, where it fails is that people do it and they, they can get it launched. They can’t sustain it. You see that a lot. Right? Because if your Executive team isn’t bought into the vision and isn’t bought into the culture, the next time that president of that company walks on that manufacturing floor and dictates that a customer’s order needs to go out today, that can kill the entire thing.

[00:17:31] NH: And you’re back to where you were from the beginning. And that’s a lot of what happens is that people just, once you slip on the discipline a little bit, it’s a slippery slope back to where you came from. And it’s really hard to get back to that lean journey.

[00:17:46] Bryan Sapot: So how do you do that?

[00:17:47] Nick Hinman: That’s probably the most difficult part and especially in a multi-site environment, you know, it’s easy for me to, to walk out into the plant when you’re there every day, but you know, when you’re across the country or even across the world, that’s where you really have to document your processes in your program.

[00:18:05] NH: Established standard of work, established KPIs, and establish a rapport with people that there’s a mutual understanding of an expectation here. I quickly can look at data and KPIs and know that you fell out of line. And I need to react to that with you as quickly as possible, and also really make sure that the teams that you’re working with understand that, that from a lean perspective, you have to be proactive.

[00:18:29] NH: That’s where continuous improvement is critical. Right? Reactive continuous improvement becomes proactive. Meaning you’re mitigating future mistakes if you have a culture of continuous improvement because you’re always learning from what you did wrong the first time to ensure it doesn’t happen a second time.

[00:18:46] NH: So those are the, I mean, that’s the big thing, right? Is that it’s a management in a culture that has to be established upfront. And it has to then be, you know, navigated in a sense to where, you know, [where those checks and balances are of when things start to get too good, which is just as concerning as if they start to get really bad.

[00:19:07] Bryan Sapot: So, how do you start to build that out, that structure and the standard work and everything that needs to go around there?

[00:19:14] Nick Hinman: A lot of it is just keeping it simple. So start with Excel, right? So standard of works can be built in Excel by structure. So when I think of lean and to go back to it, you know, lean is broad.

[00:19:25] NH: It’s really hard to, you know. My lean expectations, these are probably different for a majority of the people that are going to listen to this podcast. Right. They’re probably different than yours, or, you know, some of the guys that I work with or that I’ve worked with in the past, but you’ve got to start simple.

[00:19:41] NH: So you’ve got to build that house, right. You can’t put the second floor on a home until you build the foundation. So that’s where you have to have the right structure in place, roles and responsibilities, job descriptions. Everybody needs to understand. You have to have a training matrix that defines, “What are the key things that are associated with each line?

[00:20:00] NH: “What’s the skill set of the people that I have associated to this line? Where’s my backups, et cetera?” You have to have all of that built out and then you start establishing standard of work for people. “Hey, every day, I need you to do this. Once a week, I need you to do this.” And if you define that and you hold people accountable, it’s much easier to manage than constantly having to follow up on things.

[00:20:23] NH: We’re either missed or reminding people and that’s where more successful morning meetings come in. Right? Gemba walks are big on that because if you start having those routines, it builds in this expectation that people already know what they’re expected to do throughout the entire process. So, yeah.

[00:20:39] NH: From a scheduling and a planning perspective to a procurement. What’s our inventory philosophy. Everybody knows how their position helps the team ultimately win. And by defining that, you know, you’re able to then manage it through a scoreboard.

[00:20:54] Bryan Sapot: Okay. Because you understand that the foundation has been laid and the number’s going up or down on the scoreboard, is a symptom of the cost, right of somebody not calling something?

[00:21:03] Nick Hinman: Yeah. You can quickly do a root cause analysis when you look at a line and you, you know, the people that are on that line, that the job descriptions, what they’re supposed to do, you have the cycle time of the part that’s running on that line.

[00:21:14] NH: Once you kind of, once you have all of that, it’s easy to diagnose. It’s also a lot easier to not have to micromanage.

[00:21:20] Bryan Sapot: Yeah. Right.

[00:21:21] Nick Hinman: So that’s the other thing, micromanaging these people and the people you’re trying to take on this journey. If you micromanage them, it’s the same thing as telling someone that, you know, you need to use your left hand instead of your right hand. They’re just going to say, “Enough’s enough.” This person isn’t going to listen to me.

[00:21:35] Bryan Sapot: So how much detail are in those standard work documents or Excel templates?

[00:21:40] Nick Hinman: No, not much. It’s usually at a management level or a leader level, kind of like, you know, “I run my morning meeting every morning from 7:00 AM to 7:10. I do my gemba walks, but at 9:00 AM, 1130 and 1:45.”

[00:21:54] NH: “I have my end of day report out and email my manager or write in my log, anything that might’ve happened and get prepared for the next day.” I mean, it’s really simple. Or, “Once a week on Wednesdays, I’ve got to walk the corrugate aisle to make sure that our VMI inventories are at the right levels. And we didn’t miss anything to make sure that the ERP is, is running.“, right?

[00:22:14] NH: Because those are the things that if you don’t keep up on them, they permeate that firefighting and they can just totally kill what you’re trying to do. And to be frank, I mean, those are the things that probably everybody on this podcast deals with on a daily basis.

[00:22:27] Bryan Sapot: Yeah. Yeah. I’m sure. Definitely. I mean, I can’t even relate this stuff to software development. Like it, it cuts across most industries and what everybody has to deal with.

[00:22:36] Nick Hinman: Yeah.

[00:22:37] Bryan Sapot: So when you’re talking about standard work, it’s not getting down to like what the individual operators or people working on the line are specifically doing necessarily?

[00:22:45] Nick Hinman: No, that that’s all in that work instructions in those things that engineering put together with them at the front end. You know, the only things really lean wise that, that you would work with them on is, is, you know, if you’re running a Kanban system with hardware, things like that.

[00:22:59] NH: You want to educate them on the importance of being diligent with that system, right? Because if you run through Bin 1, and you pull Bin 2 forward, you have to make sure that bin 1 goes in the replenishment area because someone’s not going to see that. And that ultimately then will run you out of parts, but that’s also kind of the expectation that’s built into the job description of those leaders. And a lot of times, you know, after you get through the initial conversations, the observance of what’s going on.

[00:23:27] NH: A lot of it, you find out that people really don’t know what they’re expected to do every day. And once you work with them and define that, ultimately you find that you become more successful right away because people like to feel successful. They don’t like to feel like failures. So. If you can set them up and you can walk with them and make sure that, you know, you’re working with them to put them in a successful position, then comes the scoreboard, but don’t throw the scoreboard up right away.

[00:23:52] NH: No one wants to look up there and just constantly see that they’re losing every day. So there’s a fine line there, right? Because ultimately that, you know, [00:24:00] again, if executive leadership is not on this journey with you. That’s where you’re going to have a conflict of interest.

[00:24:05] Bryan Sapot: Yeah. Can you be successful if executive leadership’s not on the journey with you?

[00:24:09] Nick Hinman: No, I truly don’t believe so. They need to be lean practitioners. Do they need to, you know, understand lean in and be able to do that? No, but I think that they have to trust the team that they have in place to execute and what lean will do for their operations. And that’s really that, that sponge.

[00:24:26] NH: Right. So it’s okay if that customer order needs to go out today, but it’s not the CEO’s job to walk out on the floor and share that. That needs to go through the plant manager or the production or operations manager, who then articulates it appropriate within the foundations that have been laid.

[00:24:42] Bryan Sapot: Yeah. Okay. Makes sense. Okay. So you have to build, you know, like you were talking about the analogy of a house, right. Where you’re building the foundation, which is kind of the standard work roles and responsibilities training matrix, putting in the sounds like morning meetings, Gemba Walks are kind of part of that too.

[00:24:58] Nick Hinman: Yep. Yeah. I mean, just all those like kind of foundational things, right that are associated with making sure that you’re going to put you and your team in a position to maintain your KPIs. Right? And then once you get there, then you can go up a level, which is the five whys, doing Kaizen events, doing continuous improvement type fishbone activities.

[00:25:19] NH: Putting in more complicated Kanban type processes that gets you less reliant on an ERP system and more reliant on visual management and things like that. But if you go out of the gate with that, without the foundation and the fundamentals in place, those things become too difficult to manage. And ultimately you revert back to what you’re used to, right?

[00:25:39] NH: Which is usually a push system where you’re making stuff just to make it, instead of making it with the purpose, which is also what I really find really neat about lean is that everything you do has a purpose. Everything you do drives value at the end of the day. And ultimately everything that you do is reflected on your scoreboard, both the scoreboard for your production side and for the plant as well.

[00:26:02] Bryan Sapot: So how do you guys run your morning meetings? Like at the plants? What’s the structure of those thing?

[00:26:07] Nick Hinman: We try to do it as consistently as possible across all of our manufacturing sites. We do morning meetings in our manufacturing areas. And we do them in our warehouse distribution, receiving areas. And what we focus on is really, again, simple.

[00:26:22] NH: “How did we do yesterday? What do we have to do today to improve from yesterday? Are there anything we need to talk about that’s of importance, any, any unique situations, any, anything critical happening today that we need to make sure as a team we get done, whether it’s completing an order, that’s on the line or

[00:26:38] NH: being aware that you know, something is on back orders of critical importance.” Highlighting quality issues we ran into the day before, mispicks, customer service issues, scrap from engineering.” And then we just review where we are at back order wise or overall efficiency wise to make sure that the team is all aware that, “Hey, here’s where we are for the week.”

[00:26:59] NH: “Here’s where we got to get to go. Here’s the things we need to pay attention to.” And from there, we start the day, right? We try not to inundate people with too much information because that can tend to be a distraction.

[00:27:09] Bryan Sapot: It seems to me that the morning meetings are kind of critical to the whole process. Like, is it also where you share some of those quick wins or how does that come up?

[00:27:17] Nick Hinman: You know, every day we want to show that we’re successful. We want people to feel successful. If we weren’t successful, that’s where we talk about, “How do we get better?” We don’t focus on what happened. We focus on where are we going to improve today from yesterday.

[00:27:29] NH: And a lot of it to be, to be honest is, is just the communication piece. The morning meeting in my mind is just open communication and dialogue. It’s keeping everybody on the same page, answering questions and also addressing the things that need to be addressed. Don’t make it personal. We really educate our leaders to make sure that they do that right.

[00:27:47] NH: So we empower them to be in charge of their own. We don’t have like a regimented morning meeting. We let our guys run their morning meetings the way that it best suits their team, because everybody’s got a little bit different, right? I think that’s the flexibility of the way that we kind of operate at Tacony is, we’re a very diverse company.

[00:28:05] NH: So one plant is different than another plant. One warehouse is different than another one in terms of just the sheer amount of way we ship product, build product inventory product. So we’ve got KPIs that are aligned across all of those plants so that we can all talk the same talk when we’re looking at KPIs and discussing, ultimately, how we’re doing, but from a day-to-day execution piece. We just kind of let them do it.

[00:28:30] NH: And as long as they stay within our expected you know, guidelines.

[00:28:33] Bryan Sapot: Yeah. So kind of following the standard work stuff.

[00:28:35] Nick Hinman: Yeah. We just say, Hey, communicate with your team. Have a morning meeting. Not, “You have to talk dah, dah, dah, dah, dah.” We just say the expectation is, “You have a morning meeting.” And you’re building the rapport with your team appropriately.

[00:28:47] Bryan Sapot: Yeah. Okay. It’s surprising to me that there’s still a lot of companies out there that don’t do that. They don’t have a morning meeting. They have a weekly meeting with the production team and they’re sitting in a conference room looking at stuff.

[00:28:57] Nick Hinman: Just real quick. I think that’s a great point because in a corporate strategy role, I work with a lot of different areas now within our business.

[00:29:05] NH: So admin stuff, sales, it’s amazing to see the value of a morning meeting across an entire organization. So that’s one of the things that we’ve been looking at implementing in these other areas of the business is morning meetings and scoreboards, right? Because it ultimately just breeds inclusion, it breeds communication, it breeds winning.

[00:29:27] NH: And when people are winning, they have fun. Fun creates a great culture. So it’s very important. And that’s, to your point, it’s amazing that people don’t do it because I think people see it as, “Well, we don’t have time to do that.” Well, you gotta make time.

[00:29:40] Bryan Sapot: Right? And it seems to be a key part of that continuous improvement culture, because if you’re not getting together on a regular basis, you’re probably not going to get all the feedback that you need on the issues that happened yesterday.

[00:29:51] BS: And they’re going to fester until they become too big. And nobody really, you miss the chance to stop them while they’re small.

[00:29:57] Nick Hinman: Yeah. Communication leads to assumptions and assumptions lead to problems. So, you know, if you can stay connected at the right level and you have the right goals in the right tracking in place as a leadership team, you should quickly be able to know to ask the right questions and go to the areas of concern.

[00:30:12] NH: So that’s again, that’s where a Gemba walks come in, right? So you’re not necessarily unaware of what’s going on until the next morning’s meeting. You’re aware of that throughout the day. And trying to identify what’s going on, whether it’s through an Andon board or. you know, a light on the line when it goes down, you know, “Hey, I gotta go see what’s going on.”

[00:30:29] NH: They need support. Those are the things I think that really, to your point gets you out of reactive mode and gets you into proactive mode.

[00:30:36] Bryan Sapot: Yeah, it makes sense. You also said something to me when I toured the Chicago plant with you a couple of years ago about looking at issues and determining like, “Is this an ongoing concern or is this just like a one-time issue?”

[00:30:47] Nick Hinman: Yep.

[00:30:47] Bryan Sapot: And is that part of those meetings too? Or is that kind of part of, you know, problem solving further down the chain?

[00:30:53] Nick Hinman: Yeah. So I think you can do it in two ways. So if it’s product manufacturing related, so say it’s like a scrap reason, obviously a Pareto Chart will identify.

[00:31:05] NH: Exceptions to consistent problems. Right. But when you’re walking around in a plant, I think that’s at an operational management level. That’s a critical piece that you have to learn, which is where do I dig in versus where do I just let it roll? Right. So becoming over reactionary is going to actually make you more inefficient.

[00:31:27] NH: It’s hard to explain, but you’re right. like if I walk around and worry about every single thing that goes wrong, then I’m just going to drive myself crazy. I’m going to drive the employees crazy and we’re not going to get anything done. But if I only focus and work on the right things that need the right amount of attention, then hopefully that’s going to just improve us going down the road and you’ll see that.

[00:31:48] NH: So it’s, it’s kind of difficult to explain, but it’s it’s really up to the plant and the leadership team to define that. But I do find that if you go into trying to solve every single problem, every single day, you’re never going to get anywhere and you’re going to start to bury people and burn people out because that also tends to focus on the negative and when you focus constantly on the negative, then that permeates in the culture and you start to get people pushing back and not being as flexible and bought into the systems that you’re trying to build.

[00:32:19] Bryan Sapot: Yeah. That makes a lot of sense. So, all right. So we’re kind of thinking about this house and you know, I’m leading towards like this incentive package you guys have. And I’m really intrigued by that. A lot of people want to do those things for their plants. So you build this foundation, you build this culture that we’ve been talking about, and it sounds like you have lean tools that can kind of fit in the middle, like Kaizen events and fishbone diagrams, five whys, 5s, all of that fun stuff.

[00:32:43] BS: But how do you get from there up to the point where things are stabilized enough, that you can do an incentive program? And what do those things look like and how do you start that?

[00:32:52] Nick Hinman: So we do run an incentive program and it took us quite a while to get to the incentive program. And we had a lot of strategic and management conversations around when was the right time and how do we put it in the right way

[00:33:05] NH: so it doesn’t kill what we’re trying to do, right? Because people will just see the end goal versus, you know, making sure they’re doing everything correctly. So what’s the right way to roll out the incentive program? So to go back to the first point, that’s part of that roadmap. So the first time you walk into the plant to, when you think you’ve gotten to where you need to go at some point, when you get farther down that roadmap and through that project plan, you’ll hit a period where you say, okay, this thing is running pretty sweet.

[00:33:34] NH: Like, we’re doing a really good job. Our structures in place. We’re keeping up, we’re meeting our KPIs, the culture’s there. People are getting it. Right. They’re speaking it, they’re behaving it. Okay. Now I can look at doing something a little bit more accelerated and that has a little bit different connotation to it.

[00:33:51] NH: So that’s where we decided, “Okay. Let’s go with the incentive program.” So we didn’t roll it out corporate-wide. We did it at the plant level. So we started and said, okay,

[00:34:00] NH: but we needed to establish, Bryan, what goes into this incentive program? It just can’t be production output. Because quality will suffer.

[00:34:08] NH: Right. And everybody will just forget, you know, I got to get another five units out the last 10 minutes of my shift rather than 5s my line and get ready for tomorrow. So we built out a tiered incentive plan that has three pillars. So we’ve got production efficiency, right? So we don’t go off of standard.

[00:34:27] NH: We go off of reality, big time, because we don’t want to push inventory. We don’t want to have more inventory than we need. We want to keep ourselves lean from a flexibility standpoint. So we go off of efficiency. What did I get done with what I could control? We go off of quality. So we’re tracking quality issues at the line for two reasons.

[00:34:44] NH: One, we don’t want to let bad parts get to the end customer, obviously that’s number one. And number two, we want to get the right information for that continuous improvement process. And then the third pillar is 5s because I’m a firm firm firm believer that 5s is a critical, critical component of a successful lean plant.

[00:35:03] NH: And the reason being is that clutter causes confusion and confusion causes inefficiencies. So it’s easy to onboard people. It’s easy to move people around. It helps you establish standard of work. It helps you put in visual management, Kanban, et cetera, because everything is in its place. So it’s critical that we focused on 5s early in our journey.

[00:35:25] NH: You would think, “Okay. Yeah, everybody’s going to be focusing on production and quality.” We actually put production and quality as 25% of the incentive program and 5s as 50% of our incentive program. We’re hyper-focused on 5s because if we do and hold ourselves accountable to being organized, we should meet our productivity goal.

[00:35:44] NH: We should have better quality because we know what’s good, what’s bad. And so if we’re in a position to be efficient and in a position to be productive, then our quality should be better. And it all starts with the discipline of being organized and running the system. Because if you don’t establish a robust 5s program, then you can’t have everything else as you go up the chain of that house, right.

[00:36:06] NH: As you start to build out that foundation, it’s going to crumble. So it’s very interesting because most people think incentive programs are all based on efficiency. No, ours is based on 5s. And then production and efficiency. And you know what? People got that really quickly. If you walked into our plants from three years ago to where they are today, you probably wouldn’t recognize them.

[00:36:26] NH: And people understand that, and they buy in and then people start thinking, “Oh, well, you know, maybe we need to tape out the floor here, you know, maybe we need to start moving things over here because this is where we always put this.” It starts to just then permeate ideas, which ultimately impacts your productivity.

[00:36:42] Bryan Sapot: Yeah. It’s really interesting there. Have you ever read the book, ‘The Power of Habit?’ I think that’s what it’s called.

[00:36:47] Nick Hinman: No, I have not. It sounds like maybe I I’d like that.

[00:36:51] Bryan Sapot: It’s how to build habits in organizations, you know, and like what, what the components are to make that happen. And there’s a story in there.

[00:36:58] BS: I wish I remembered the company’s name, but there’s a story in there where a guy took over this company. It might’ve been U.S. Steel. They had all kinds of problems across the entire company. And like the share price was going down and just like, tons of issues. And he decided, “We’re going to focus on safety.”

[00:37:11] BS: “We focus on safety and we keep all of our employees safe. And that is our number one goal that we’re going to do. Everything else will fall in place.” And that is similar to what you guys did with 5s it sounds like. Cause it’s like, “If you can focus on this organization and making everything clear, then the rest of it should fall in place.”

[00:37:29] BS: Plus you’re building these habits of organization following these processes and things like that. Is that kind of how you see it?

[00:37:36] Nick Hinman: Yeah, so I actually stopped telling places that I was visiting them, so I stopped letting people know that I was traveling to their plant because I didn’t want them to clean up before I got there, because that’s a learning opportunity. I would just literally spend hours walking around with different leaders in different areas of these facilities, explaining and teaching, not necessarily calling them out, but explaining the importance, like why would you put that there?

[00:38:01] NH: Or, “Hey, I noticed that that’s over there. Why is that?” And if they can’t speak to it, then we would walk over there and we would talk about it. And I would just share that, you know, the expectation is next time I’m here, this needs to be in a different place because this is very important because what if, you know the big thing in that power of habit, right?

[00:38:17] NH: Is that if I can get those leaders to buy into the habit, it ultimately then feeds through the organization. It becomes that expectation that everybody needs to hold themselves to the same standard. Right. So what you also find in manufacturing in that first conversational piece a lot, is that there’s so much tribal knowledge built into these facilities.
[00:38:39] NH: And a lot of the teaching of 5s in visual management is around, well, what happens when you’re not here? Who’s going to know that that box, even though systematically, it says it’s an IOB. You remember you put in ILL because you didn’t have time to do the scan from B to L. Those are the things that you just, you teach people through practice and through conversation.

[00:39:02] NH: And that starts to then connect the dots for them, which ultimately is a waterfall effect around that. And frankly, the incentive plan has helped us and has been a catalyst to us doing that correctly. Right. So they know that if they don’t hold their 5s, they are not going to get that portion of their incentive.

[00:39:20] NH: And ultimately we set it up so that they do get their bonus. We want people to meet their bonus. We don’t want to put in an efficiency goal that is unrealistic. You can’t say, “Yeah, you’re supposed to make 10 widgets. And that, especially that you have 10 people, but only seven people showed up today. I’m sorry, you guys didn’t meet it.”

[00:39:36] NH: The other thing is too, like there’s all other rules built into the incentive program that are outside of those three pillars. Attendance is a big one. If you have an unexcused absence outside of the fact that, you know, you had a family member sick, or you had something that you couldn’t control come up, or you have a doctor’s note, you’re excluded from that week.

[00:39:55] NH: And we focus weekly on the incentive programs. So it allows people to recover and still get some piece of the incentive. What we found is remarkable. Our efficiency’s gone up, our backorders have gone down, our inventory levels have dropped, and our efficiency rate is better than it’s ever been.

[00:40:12] Bryan Sapot: Crazy. So is it daily or is it weekly?

[00:40:16] Nick Hinman: Weekly.

[00:40:18] NH: But, daily we track every day, which ends to the week. So from a reaction perspective, it’s not like, “Oh my God, yesterday, we were terrible. I’m not going to make it this week.” And say that to Monday or Tuesday. That’s where “Hey guys, what do we need to do to make it up, to get to 95% or 90% by the end of the week?” It’s not a hundred percent, you know, we don’t want to set it too high.

[00:40:40] NH: It’s like everybody says, you know, what’s your OEE calculation, right. Or, what’s your capacity? Are you at a hundred percent capacity? You never schedule to a hundred percent capacity. So, we set it up to be successful so that people can get it because ultimately our capacity is at 80%. But we want people to achieve 80, 85% efficiency, because that allows us that flexibility, which we know is wrong, which is the forecast.

[00:41:04] NH: And that comes from where I started, which was in supply chain and planning. So I know the forecast volatility there, but now I can understand how the volatility of the forecast impacts the daily output of the plant. And one of the jobs that I really really relished in this, “Is how do you bring these teams together to really build that cohesive teamwork from this schedule to the warehouse and just the importance of that leadership team working together every day?”

[00:41:30] NH: That ultimately lets the associates that work on the floor be successful.

[00:41:34] Bryan Sapot: Yeah, that’s an interesting thing that you just said that is the forecast is always wrong. It’s not possible to make it a hundred percent correct. And so having the flexibility, kind of the slack of being at 80% capacity gives you the ability to respond to those variations. And in the forecast that you know is wrong, right? Right.

[00:41:55] Nick Hinman: And we can have a whole other podcast to be quite honest on push versus pull. I am a practitioner and a proponent of pull. I grew up in a push upbringing if you will, because I was in PE for a little bit. And that’s all about absorption. That’s all about, you know, getting as much through that plant to make as much money as possible.

[00:42:15] NH: But ultimately when you push too much inventory, it eats into your lean culture. So that’s where that forecast is critical. But it’s really that the cadence of that plant, that’s the key piece of making that successful operation, holding that efficiency target, holding that performance target, holding your ground and your organization and your standard of work, holding yourself to KPIs, you’ll then ultimately be successful.

[00:42:38] Bryan Sapot: I would like to talk about that. I think that would be really interesting, but it is not going to fit in the next five minutes. So how do you determine whether or not somebody’s got the 5s goal for the week? Is that easy to do or is it subjective?

[00:42:49] Nick Hinman: That’s why we have a scorecard. It’s a manual scorecard, but we have a scorecard and we’ve identified, or you’re kind of assigned areas of the facility to a leader of a different area.

[00:43:01] NH: So if I was in shipping and on the distribution piece, I may go look at our quality area and I would do a 5s and the checklist is the same. And it’s pretty easy. It’s, you know, a one through a five and then the total score determines if you pass or not. So you have to get over a total score in order to hit the incentive.

[00:43:21] NH: That’s the biggest thing with our 5S program is that there’s no leniency on the 5s portion of the incentive. You either hit it. Or, or you don’t. If you don’t hit it, there’s nothing you can do about it other than try to get it next week. And so within that, there’s a report out, right? So I take the scorecard and then I note specific things that I saw throughout that scoring session.

[00:43:41] NH: I give it to the line lead and then they’re, you know, responsible for ultimately implementing that or working on those with their team.

[00:43:47] Bryan Sapot: That’s really interesting. There’s a lot of stuff that I think we could dive more deeply into, but so let me make sure that I have this, this correct as we wrap this up and tell me where I’m missing, you know, kind of this house analogy.

[00:43:58] BS: So we talked about the foundation that you put in and really in the middle, once you put in that foundation of trust engagement of the employees, kind of the beginnings of continuous improvement, is that the point where you add in sort of those more traditional lean tools?

[00:44:14] Nick Hinman: Correct. That’s when you can get more sophisticated.

[00:44:16] Bryan Sapot: Okay. Yeah. And then once you have things kind of stabilized and running, well, like you said before, I mean, would you recommend everybody do an incentive program at the plant level, if rolled out the right way?

[00:44:30] Nick Hinman: I think it really helps, you know, keep people engaged.

[00:44:33] NH: It’s hard for associates to understand a backorder and a budget because that doesn’t impact them. They get paid, whether they come to work or not, right. They don’t get paid on a commission plan. And a lot of the times, back-order really, isn’t an associate’s problem. It’s somewhere down the chain forecast, supplier ERP, bill of materials, whatever you want to, you know, say it is.

[00:44:55] NH: So we found it to be successful. And to be honest with you, it pays them more than most spot bonus programs at the end of the year would pay them anyways. And they get the money sooner. Again, it’s the incentive, but no pun intended, it’s that incentive to do well now, see immediate gratification.

[00:45:11] Bryan Sapot: So a couple of other generic questions that I like, I like to ask. What’s something that you learned as a kid that still sticks with you today.

[00:45:18] Nick Hinman: So one of the things I think is just from a leadership perspective, growing up, I played a lot of sports. I was always kinda like, I liked the aspect of, of winning.

[00:45:26] NH: I was a very competitive kid and I think that just being in operations is kind of an extension of playing a sport. Right. You know, I can equate a CEO to owning a football team. Right. You can equate a ops manager, a plant manager to being a head coach. There’s just so many ways that I can take a situation from a work perspective and quickly dissect it and apply it to something that is very simplistic for me to understand.

[00:45:52] NH: So by being in sports and seeing that, and just being involved, it allows me to just kind of decompress real quick, “What’s going on?” And then decide, you know, how do you lead these people? Cause not everybody, not every team can be led the same, right? You don’t lead a baseball team the same way you lead a football team, you don’t coach them the same way.

[00:46:08] NH: So if you can quickly kind of understand the personalities that you’re dealing with, you can cultivate and realign your leadership approach. And I think that’s probably the biggest thing that I can use now, that I got growing up.

[00:46:22] Bryan Sapot: Yeah, that’s great. Do you have a favorite book? It doesn’t have to be a business book, but like something you recommend.

[00:46:29] Nick Hinman: Yeah. I mean, there’s all sorts of books that I love. I love to read books. I like to, especially at, you know, Ray Dalio’s ‘Principles’ is a really good book. ‘The Goal’ from a manufacturing perspective is probably the best one to just really kind of connect the dots without getting into the lean minutiae.

[00:46:44] NH: It really kind of just shows you, okay, yeah, this is what I need to be focusing on. There’s just so many. And then. Obviously, just going through an MBA program, you have to read so many books, but I’ve been reading a little bit of ‘Extreme Ownership’ by Jocko Willa recently. That’s a good one because again, I, you know, take business management and applying it to something that.

[00:47:05] NH: Like a war or leading an army or leading a group of Navy Seals is really easy to tie the two together. And you can just quickly reference things like that. So I like books that I can reference real applicable type situations too. That helps me then when I’m in the moment, say, “Oh yeah, I remember I read how they did this in ‘The Goal'”.

[00:47:25] NH: I remember them talking about the Herbie, right. So, you know, I can go, “Oh, where’s the Herbie in this plant?” Okay. You know, it’s easy for me to go find it.

[00:47:33] Bryan Sapot: Yeah, you start to pick up themes throughout all of these books, too. That at least the one that I’ve been picking up is culture is everything.

[00:47:39] BS: Like, if you have a good culture and you can build that good culture, you can do a whole lot and be successful with that, you’ve got other problems.

[00:47:46] Nick Hinman: Yeah, the thing is that culture is everything, but there is no set culture, right? Every business has a different culture. And I think that’s one of the difficulties with something like LinkedIn or whatever you want to test it too.

[00:47:58] NH: It’s really neat to see cool cultures out there, but trying to hold yourself from a culture perspective to another organization is really, really difficult to do. And it’s unachievable. So for example, in lean, obviously everybody wants to be Toyota, right? Every book in lean is written about Toyota.

[00:48:16] NH: Well, Tacony is not Toyota. Tacony is never going to be Toyota. So we have to be Tacony. We have to come up with our own processing system. I think. Yeah. I agree with you. Culture is everything. And I think there’s a big piece of that is just developing relationships with people, treating people as human beings and not treating people as associate.

[00:48:34] Bryan Sapot: Building trust and engagement. And that makes a lot of sense.

[00:48:38] Nick Hinman: And I that’s one of the things that I took away from a consultant I worked with a couple of years ago is him saying as a consultant, “My job here is to get to know the people. First. I want to know everybody’s name. I want to know their kid’s name before I can actually get out there.”

[00:48:52] NH:And then they’ll start to trust me. Once I get that relationship built, then the trust comes. Then the culture comes.”

[00:48:58] Bryan Sapot: Interesting point. I know a lot of people who wouldn’t be willing to pay for somebody to walk around and meet all the employees as a consultant. But yeah, no, I know.

[00:49:08] Nick Hinman: It’s an interesting perspective though, if you really think about it because

[00:49:11] NH: you bring in a consultant. That consultants going to tell you what to do, but you’re also need sometimes that consultant to be a change agent for you. And, people look at consultants says they just get scared of them.

[00:49:22] Bryan Sapot: Yeah. Consultant gets a bad reputation sometimes like lawyers, maybe not as bad as the lawyers.

[00:49:26] BS: All right. Well, thanks Nick. I really appreciate you giving us an hour and coming on the podcast to do this. Is there anything you want to plug or talk about as we wrap this up?

[00:49:35] Nick Hinman: I mean, I appreciate you having me on. We’ve known each other, yeah, like you said, five, six years. What you’re doing with SensrTrx, you know, Tacony is a SensrTrx user.

[00:49:44] NH: I would recommend it to any company out there that’s looking to either have a really sophisticated data collection system or a really simple data collection system. But I think the timing has to be right, you know, and you have to build out and work with your team to put in the right systems

[00:50:00] NH: that work for you, your different businesses. So I think it’s really cool what you’re doing. I’ve seen it from the very beginning when you first started to where you are now, and it’s really neat. So kudos to you and your team on that.

[00:50:11] Bryan Sapot: Yeah. Thank you. Yeah. Nick was at customer number two, five years ago, more than five years ago at this point.

[00:50:17] BS: So I appreciate that. And it’s been fun to watch you what you’ve been able to do with the different organizations that you’ve been at. I’ve been really impressed with what you’ve done. So, yeah, you’re welcome. All right. So this has been Zen and the Art of Manufacturing podcast with Nick Hinman VP of Strategy at Tacony.

[00:50:34] BS: Please subscribe wherever you get your podcasts, Apple podcasts, or Spotify, or anywhere else you find them on the internet. So this is Bryan Sapot, and we’ll talk to you in a couple of weeks.