November 5, 2008
by Joe Terrett, Editor, Plant Newspaper
An overhead view of Cogent’s clean, organized and much leaner manufacturing operations in Burlington, Ont.
Photo: Cogent Power
A pillar of lean manufacturing is the elimination of waste, defined as anything that does not provide value to the customer. So naturally, when a company dives into lean, the focus turns to cleaning up the manufacturing areas, reorganizing, simplifying and improving processes, then taking it all up a notch by building a culture of continuous improvement. But no matter how much kaisaning, value streaming, 5S-ing and poka-yoka-ing you do, it won’t mean a lot if the customer isn’t “delighted.”
So what does the customer really want?
That’s a question often inadequately answered when manufacturers embark on a lean transformation and one that Cogent Power Inc. decided to pursue in a comprehensive fashion with an up close and personal customer survey.
The company serves the power, transmission and distribution industry from its 125,000 square-foot plant in Burlington, Ont., where 175 shop workers and 25 staff are employed in the manufacture of high-quality cut wound, flat and toroidal transformer cores that are sold to utilities and industrial transformer customers.
Business has been pretty good for Cogent (annual sales are in the neighbourhood of $150 million), which is owned by India’s Tata Steel, the world’s sixth largest steel company. But in 2003, the global transformer business was in the doldrums and the Burlington plant was for sale. Part of preparing the plant for sale was the adoption of lean in the manufacturing area. Like most companies embarking on a lean journey, Cogent did many of the usual things, such as executing 5S, value stream and kaisan projects. It was having some success with these, although there were typical challenges such as developing a lean culture among staff and sustaining gains. Meanwhile, business picked up and as it turns out, the plant wasn’t sold. But about three years in, Chris Brown, the director of commercial activity (which covers buying materials to customer strategy), was struggling with one aspect of Cogent’s new lean lifestyle.
“It’s all about being customer-led,” says Brown. “But nobody was really talking to the customers to obtain their input. The key to our future is long-term sustainable growth. So where do we invest our capital? Where do our customers want us to invest our capital? Do we really know what our customers want?”
Lean on the shop floor, although developing nicely, clearly wasn’t enough: the process would have to include sales, and understanding the strategic objectives of Cogent’s customers, as well as its customers’ customers.
Cardiff University in Wales, which houses a Lean Enterprise Research Centre (LERC) and a very knowledgeable lean team, was consulted. That led to a customer insight survey.
Brown describes it as “painfully simple” with no more than five focus areas. At first the survey was sent off by fax or presented during occasional face-to-face meetings between Cogent account managers and purchasers during sales calls. But the information that came back was too vague and of little use. “Customers treated the faxed survey as most of us would: impersonal and added work,” says Brown.