Scott Morey uses lean at Morey Corp. for continuous improvement Featured

8:00pm EDT July 26, 2010
When Scott Morey arrived at the plateau, he realized what helped his company grow wouldn’t take it any higher.

After exponential growth, The Morey Corp. wasn’t quite the same company that Morey’s grandfather founded in a basement in 1934. While that growth was great, it also revealed the inefficiencies of old systems.

“The first signs that you have to do something different is when systems and processes and people that were performing well … start to crack,” says Morey, the third-generation president and CEO of the electronic manufacturing services provider. “Problems that you didn’t have before because they were just handled start to crop up again. A lot of it is just because the volume of work that needs to be addressed changes. The demands of customers have a tendency to become greater. The speed at which we need to operate increases and everything just has to move to another level of performance.”

The manufacturing processes that Morey Corp. developed for smaller-scale operations weren’t keeping up with its growth. The company was committed to keeping manufacturing operations in the U.S. instead of outsourcing overseas. It was also planning to expand beyond original equipment manufacturer services by offering products directly to end-users.

But the company was stuck.

“We recognized that, given the tools and the expertise that we had developed over time, we had gotten about as good as we could get,” Morey says. “We just were not making the types of improvements — particularly in quality — that we believed we needed to make to remain a world-class manufacturing company.”

To be able to scale to growth and compete in the global market, Morey knew he had to slim down the inefficiencies and improve quality. He found the perfect match for the company’s continuous improvement philosophies — not to mention an expanded toolbox of methods — in lean.

“When you’re providing any good or service, the fundamental objective is to do it as quickly and efficiently as you possibly can, at the highest quality,” he says. “The key to that is eliminating waste, eliminating rework, eliminating anything that doesn’t bring value to the process.”

Take a long-term approach

You can’t eliminate waste until you know what it is. You have to know what points to the end goal and what doesn’t, so you need to know your target.

“First and foremost is to adopt a long-term philosophy,” Morey says of lean. “In other words, I’m not doing this in order to meet some quarterly financial statement goal. The things that we do are aimed at achieving outstanding long-term performance for the company and for our people.”

To make sure improvements point toward long-term performance, start with your overall vision and work your way down.

At Morey Corp., the vision starts when owners set high-level performance goals — like revenue growth, profitability, cash flow and other financials. As those trickle down through the company, more of the 550 employees get involved at each step.

“From there, we will get our top leadership team together and we’ll go through a process that says, ‘OK, this is what it is we want to achieve. Here’s where we’re at today. What are the major types of initiatives that we need to focus on over the course of the coming year or two years?’” Morey says.

That sets high-level strategic initiatives — processes, capabilities, products and services that will contribute to corporate goals.

“From there, we’ll bring in our next layer of management,” Morey says. “We just start asking the questions: In order to achieve these strategic initiatives, what do we need to be able to do at a functional level? So everything is at this point still based upon these levels of performance that we want to achieve. We’re not focused on how we’re going to do it. We’re not focused on the sequence of events. We’re simply trying to get a clear picture of what it is that we need to try to achieve as a company.”

Keep moving the goal down, involving employees at functional levels to uncover tactical improvements that will contribute to those strategies. Teams at Morey Corp. meet to identify specific projects — and time frames for them — that will help the company achieve its objectives.

Even the way those projects are documented can get employees thinking about the connection between present and future. Morey Corp. uses an A3 — which refers to the size of paper they use.

“In the top left quadrant, you’ll have the stated goal and the specific metrics you’re trying to achieve,” Morey says. “Right below that in the lower left-hand quadrant, you will map out the current state. That’s where you’re going to get people all the way down the line involved in identifying what is our current state.

“Then in the top right-hand corner, we create a future state map. In other words, when we have achieved our objective, what will it look like? How will we be operating in the future? Then in the bottom right-hand quadrant, we create an action plan, which is simply a step-by-step, ‘This is what we’re going to do. This is who’s going to do it. This is when it’s due.’”

By trickling goals down that way, you ensure alignment between the high-level corporate vision and front-line improvements. You also encourage buy-in along the way by involving employees.

“The idea with this process is that, in the end, every corporate goal and objective — and improvement associated with them — permeates the daily tasks of functional area, team and individual employee,” Morey says.

Find opportunities for improvement

Now that you know where you’re trying to go, shave away waste to get there more efficiently.

First, you have to understand the current steps in a given process.

“You can think of it in terms of getting ready for work in the morning,” says Morey, explaining his 18-minute routine: shave, shower, dress and head out the door.

If you wake up, head downstairs for coffee, climb back upstairs for a shower, walk outside to get the paper then back upstairs to brush your teeth, think about how you could simplify the process.

“Identify … any activity that you’re performing that doesn’t directly add value to the process or require you to perform this activity to get the overall done job,” Morey says.

In lean, that’s illustrated with a value stream map.

“On a piece of paper, you simply make a map of all of the major activities that need to be performed in order to achieve some process output,” Morey says. “Then once you create that value stream map, you start to look at, ‘Well, how much does it cost me to perform this step?’ You can measure it either in terms of dollars, if that’s the appropriate measure. Typically, we’ll measure it in terms of time.

“When you map things out and you map the actual flow of information and you map the actual flow of a product or service, it looks like spaghetti — things are just shooting out all over the place.”

Waste may not be obvious in day-to-day operations, but when you look at an illustration of the entire process, you can spot it in those offshoots that jut out instead of pointing toward the goal.

Of course, employees at the functional level should be involved in this process because they know it best. Dialogue with them about the issues that they see.

“You can take a look at, ‘What are customers asking for that we can’t provide? What are the things that cause us the most problems?’” Morey says. “If you start asking those questions, I find that, generally, the intuition within the organization is very strong. The people know what the weaknesses are and if you ask the right questions, they’ll give you the answers.

“They might not necessarily understand the root cause of the problem, but they can certainly point to the symptoms or to the performance indicators that will lead you to where the problems are.”

Those employees can also explain why certain steps in the process exist — or if they’re even necessary.

“You’re saying, ‘Why do you have to go from this person to get something from this other person who sits on the other side of the building and then that information goes to a third person who’s sitting over here only to get back to you?’” Morey says. “And they say, ‘Well, that’s the way we’ve always done it.’ When you hear that answer, you know that it’s the easiest thing in the world to change.”

Tackle it

There may be plenty of ideas about what to improve but only so many resources to devote. To set priorities — which Morey identifies as his primary objective — he takes a few approaches.

“One is obviously to try to get some early wins so that people gain confidence in the process,” he says.

First, he looks for problems that come with quick, easy fixes. That’s a good way to begin a process as detailed as lean because it acquaints employees with the specific methods and tools used to analyze problems.

After you get a few successes, you can look for weaknesses that need improvement most. Using the theory of constraints, Morey visualizes the company’s operations as a steel chain stretched between two points.

“Think of each of the links in that chain as some process that you need to perform in order to turn an input into an output,” he says. “Eventually that chain will break. There is, by definition, only one weakest link that’s going to break first. The objective of theory of constraints and a lot of what we try to do when we are trying to implement lean is to identify: Where is that weakest link in our company? If we can identify and strengthen that weakest link, that then allows us to strengthen the overall performance of the company. Strengthening any link other than the weakest link does not strengthen the overall chain.”

One way to identify weak links is to look for substantial capital drains.

“Typically, the money and that weakest system are tied together very closely because that’s where your leaks are,” Morey says.

Tackling those improvements goes deeper than just looking at numbers.

“Much of that has to do with understanding your business, understanding your customers and understanding your people,” he says. “There’s no substitute for intimately understanding your business and what you do.”

Again, it goes back to your employees. Morey asks interdisciplinary teams to discuss solutions around a particular process. Internal experts with experience and knowledge in that area meet with people outside of the process that are affected by it — like employees from other departments, customers and suppliers.

If everyone gets a chance to share his or her varied perspectives, Morey has found that general consensus around a direction usually falls into place. But the ones he really cares about getting on board are the front-line employees who handle the process.

“It’s most important to have the people who are actually responsible for the system or the process and for implementing it, they’re the ones that really have to believe in the solution,” he says. “If they don’t believe in it, you’re not going to get very far.”

Fortunately, those same employees may even envision the solution. You just have to be open to the suggestion.

“Generally, they know how to fix it,” he says. “You just have to be willing to ask the question. You have to be willing to accept the truth. Sometimes it’s difficult to accept that your baby’s not necessarily as cute as you think it is, but that’s OK. The objective isn’t to be perfect; the objective is to continue to get better.”

HOW TO REACH: The Morey Corp., (630) 754-2300 or www.moreycorp.com

Read Morey Corp.’s lean blog: www.moreycorp.com/lean-into-it-blog