The Management Brief | Lean Improvement Group Helps Appliance Maker Reshore Products

Josh Howell, LEI President, and Mark Reich, LEI Chief Engineer Strategy, talk with Rich Calvaruso, Senior Director of the Lean Management Office for GE Appliances. Rich — with GE for 36 years and the leader of GE Appliances’ continuous improvement (CI) group for 15 of those years — has been instrumental in driving lean thinking and practice for the company. He says the purpose of his group is to “develop people and improve process at the same time.”

GE Appliances started its first lean activities in 2005, says Rich, and applied lean to a model line and got good results that impressed leadership. This was at a time when the company was using overseas contract manufacturers and concluded that in addition to designing products they needed to again make things back in the U.S.

In 2009 GE Appliances began to build back its U.S. manufacturing capability and reshore products to Louisville, KY. “[After] two years of planning, we launched that first plant. It did not go as great as you’d want from a launch standpoint,” Rich concedes. “But, I think, in retrospect, it was about as good as we could have done, considering the fact that we had lost a lot of capability over the years in this space, and we were having to build that back. You can build a plant and bring a product back, but there’s a lot more that goes into manufacturing than the product and the building.”

From that humbling restart as a lean manufacturer, GE Appliances proceeded to become the No. 1 appliance maker in the U.S. Each time the company reshored a product, it took actions to continuously get better. “We tried to get our costs right. We tried to get our quality right. We tried to get our lead times down,” says Rich. “We are a U.S. manufacturer that supplies our products to the U.S. market. So for us, making products close to the customer is super important because shipping this stuff around the world is tough.” Rich likes the LEI-coined term of “leanshoring,” because “you’re not just bringing back what you lost. You have to do it differently. You have to think about it differently.”

Rich also tells Josh and Jeff that:

• Kaizen events are beneficial and do provide change and learning, but they lack the “stickiness” to change culture and leave a lot of people out of lean capability development. GE Appliances moved from events to systems, such as standardized work and how to improve the work, and focused on getting results and developing capabilities of people across production.

• Leader lean capabilities were developed at the company through the Immersion training program for senior leaders and plant managers. “It was humbling for them,” says Rich. “We made them experience the work of a team member on the line. It created some empathy. But also they go to see not only how the tool works but the whole social aspect of how you make change.”

• Those trying to spread lean broader throughout their organizations have to have perseverance and expect some things won’t go as planned. Rich encourages those supporting lean to “learn as much as you can and do as much as you can... Go do it with them. If you really want to spread this, go find somebody who has a business problem and partner up with them and try to solve it together. That’s the best way to get people on board.”

• He looks for certain characteristics for those on his CI team: “You don’t have to know really anything about the lean toolset or lean thinking, but you do have to be humble and you have to be a learner. If you have those two characteristics, I’ll hire you. Then we’ll basically put you out on the floor and start to teach you the process, and it takes a while.”

Want to take these ideas further?

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