Business Pragmatic Experimenter could win
Metal industries are difficult to find new concepts and ways to break through the process of doing businesses. But there are human brains who can do that with creative and pragmatic ways of dealing talents within.
Globe Metallurgical is a small, profitable producer of high value added special metals marketed to the chemical and foundry industries worldwide. The company has won quality awards in a number of countries and is considered one of the most innovative in its industry. However, not long ago, Globe was a textbook example of everything that was ailing the rust belt industries of the USA- outmoded equipment, terrible labor relations, undifferentiated products, and uncompetitive cost structures. Arden Sims, the firm’s CEO, initially tackled these problems by cutting costs to regain competitiveness. But slashed salaried positions and revamped operations proved ineffective in addressing the competitive situation, and the weakening company was threatened with bankruptcy.
Backed into a corner and fighting for its life, the company began to experiment, and during an 8year transformation process the firm showed that it was capable of learning dramatically new ways of operating. The changes were not the result of some insightful master plan; rather, faced with a series of crises. Globe set about to find out what might work better than its old ways.
In reflecting on this learning process, Sims said that he didn’t know what would replace the old ways. In some cases, he found the solution himself, in other cases, some one directed him there, and in still other cases, the solution evolved over time through trying one thing, then trying something else. Some of the innovations were the result of serendipity, but regardless of the source, once a useful insight was discovered, Sims skillfully turned it into a new standard for operating the firm.
One of the most significant periods for learning came while one of the firm’s two plants was shut down by a strike. During this period, Sims and a team of 35 salaried workers operated the plant by working 12 hours shifts, 7days a week, for nearly a year, Sims described the period as follows- ‘ the strike was a time of great stress, but also a time of great progress. We experimented with everything. We were operating in a very fast, continuous improvement mode. Everyday, people would suggest ways to improve the operation of the furnaces or the additive process or the way we transported materials around the plants. I kept a pocket notebook, and if I saw something, I’d jot it down and discuss it with the team over coffee or during a meal. I filled a notebook everyday.’
The development of a new process for breaking slabs offers a good example of how this learning process took place. Over a meal, workers discussed how to break up metal slabs after they had cooled in trays 8feet across and 8inches thick. Traditionally, the slabs had been positioned on top of grate, where machines broke them into pieces; when the pieces were small enough, they fell through the grate into a transportation bin and were carried away by forklift and dumped into a bulk storage area. However, the two managers who were supervising this process felt that if the slabs were dumped directly into the bed of a dump truck, that alone might break them sufficiently and the pieces could then go directly into the storage bin. With Sims’ encouragement, after meal, the managers rounded up a truck, tried their idea and discovered that it worked. This eliminated two around the clock jobs, or eight positions altogether, an annual saving of more than $300,000 for the reduced labor alone.
Thanks to such changes, a few weeks after the strike began, the plant was actually able to increase its output by 20% over pre-strike levels, and in the strike’s tenth month the plant began to turn a profit.