The HON Co.: IW Best Plants Profile 2005

The HON Co., Cedartown Plant, Cedartown, Ga.

Employees: over 700, non-union

Total square footage: 533,619

Primary product: Metal and wooden case goods; vertical and lateral filing cabinets, desks and bookcases

Start-up: 1969

Achievements: Awarded the Shingo Prize in 2003, the Georgia Oglethorpe Award in 2004, as well as numerous local environmental awards.

The steel presses seem to set the pace of the plant, a steady whump that you feel in your chest as much as hear through ear plugs. It's the start of the production lines at The HON Co. in Cedartown, Ga., maker of midmarket office furniture -- steel and wooden desks, filing cabinets and bookshelves. As the sound reverberates through to the management offices, located just across the aisle from the machines, Vice President and General Manager Todd Murphy describes the plant's management philosophy and strategy, from how it's established at and communicated from corporate headquarters to how it's executed on the floor. Though the story sounds familiar, students of world-class manufacturing know the essence is in the execution. It's not what they're doing at Cedartown that's special -- isn't everybody doing lean and employee empowerment? Rather, it's how they're making the familiar operations strategies work to, for example, reduce costs by over $7 million in one year, as well as increase plant profitability by 27% and reduce an already stellar .22% warranty cost as percent of sales by nearly 32% over three years.

IW's 2005 Best Plants

See the other winners of IW's 2005 Best Plants award and find out how they made the top ten.Hon's effort, Murphy explains, begins at the top, with a parent company, HNI Corp. of Muscatine, Iowa, dedicated to meeting its customer's increasingly stringent needs through operations excellence and lean manufacturing. From headquarters also comes the values and vision that are firmly rooted in the beliefs of the corporation's founder, C. Maxwell Stanley. As Murphy retells it, Stanley set out to build a business where the employees would share in the company's success and be treated with fairness and respect -- before he knew what product he planned to sell. These core philosophies now are passed through the corporation to each plant member -- plant floor operators are members of the team, not employees in HNI's world -- in a Plan-Do-Check-Act sequence that circles from a corporate three-year plan to a unit-level policy development process that creates one-year plans with action-steps, and reports back to corporate via progress and annual reviews when the process begins again.

Plenty of corporations have great vision, and some even have similar plans for executing it, but at HNI -- itself an IW 50 Best Manufacturing Company for three years running (the corporation changed its name from Hon Industries in 2004) -- and its award-winning Cedartown plant, the plans are turned into results, thanks to Rapid Continuous Improvement (RCI), says Murphy. RCI, he explains, is the philosophy, department and on-going training and implementation program that is the centerpiece for transforming the corporation's policy and strategy into specific plans and actions. Indeed, at Cedartown, the RCI department office is located as near the center of the 534,000-square-foot facility as possible, with each of the five focused factories on one side and distribution along the other. There, seven permanent members work with six or more plant floor and distribution members who rotate through to learn the tools of and implement RCI throughout the plant. (Another seven permanent RCI members are deployed on the plant floor.) By immersing the members in the program, Murphy says, the company has been successful at instilling in their members the three elements needed to sustain a vibrant lean manufacturing effort: the sensitivity, or the ability to see processes that need to be improved; the passion, or the desire to improve them; and the tenacity, or the will to do the hard work necessary to improve them.

Scott Dingler, utility lead, cycle tests a drawer on a wooden desk and prepares to install packaging foam.A brief tour of the plant demonstrates how completely RCI, based in HON's own version of the Toyota Production System, is embedded in the facility. The plant itself houses five focused factories, each with its own profit and loss responsibilities and management team. The steel department runs 24-hours a day making and distributing steel components to Lines 1 and 3, which make vertical filing cabinets; Line 2, which makes metal desks; and Line 4, which makes lateral files and storage cases, shelf files and bookcases. (The fifth factory produces laminate produces, including desks, lateral files and bookcases.) Members in welding start the day first (and run two shifts), half an hour before painters, who start half an hour before assembling and packaging, following the flow of materials roughly from the front of the building to the back.

Once started, the pace of production is, frankly, relentless. Processes are designed so the machine operators can do nothing but the task at hand. Drop a file drawer handle as you try to place it for fastening? There's no time to stoop and pick it up, and just barely time to "grab another and go" onto the next drawer presenting itself on the paced conveyor. Need a tool changeover? A standardized mounting system reduces the time from an average of three to 11 minutes, down from 45 minutes to an hour.

Steven Whatley, work-cell operator, prepares drawers for finishing and assembly.Such an effort to keep the operator focused on producing product is by design, Murphy explains. The operator is the surgeon here, he says, and all processes are designed to allow the operator to focus on the patient -- the product being made -- and to make takt time.

The resulting work is as hard and sometimes as tedious as it looks, line workers acknowledge, but the company works with them in a continuous effort to make the job easier and safer, just as it does to make it faster and more productive. Custom-designed machine tools -- created, tested and implemented in RCI -- assist operators throughout the plant. The operator fastening handles to file cabinet drawers, for example, has a custom-made, poka-yoke designed, hydraulic-assisted, dual-feed fastening device to help her.

Ergonomic innovations garnered from the employee suggestion system (which thanks to the RCI program, Murphy says, increased 61% in one year) also are prevalent. The operator installing the file drawer slides (the device on which the drawer rides in the cabinet), is located at the point where the conveyor carrying the cabinet begins an angled decent toward the floor. Such placement presents the lower drawer opening to the operator at waist-high level, so she doesn't have to bend over to install the slide. In the assembly area, bins delivering steel parts feature spring-loaded bottoms, lifting the heavy parts so the operator won't have to.

Inspector Teresa Haynes evaluates vertical file drawer fit and function.Just as important, Hon shares the financial rewards of RCI with plant members, as the company founder had wanted. Employee's share of the profits are paid out semi-annually; weekly and monthly bonuses are paid out for exceeding quality and production goals; and individuals earn vacation credits by submitting member suggestions and participating on improvement teams.

2006 Nominations
IndustryWeek is now accepting nominations for the 2006 IW Best Plants Program.

In spite of the progress and the awards, Murphy says, his goal is to maintain a "healthy discontent" among members throughout the plant. More than anything, he concludes, it's the members' embrace of never being satisfied with the way things are and their commitment to implementing the RCI process that is the key to the plant's success.