Herman Miller’s GreenHouse site currently produces 17 brands of chairs in the same space it used to produce three chairs during the mid-1990s. Courtesy Nicholas Calcott
In the early 1990s, Herman Miller was “bleeding money” in its pedestal assembly business and desperate to get back on track with assistance from the pioneer of lean manufacturing, Toyota.
Through a series of fortuitous events, the Zeeland-based office furniture manufacturer got its wish and was able to completely retool its production approach and business processes with tutelage from the Japanese automotive company.
Twenty-five years later, it’s a gift that’s still giving.
Dave Vruggink, operations work team leader for Herman Miller’s GreenHouse seating operations, took the Business Journal on a tour of the GreenHouse production facility at 10201 Adams St. in Holland last month.
Vruggink undertook to demonstrate how Herman Miller — after building the facility in 1995 and adopting the Herman Miller Performance System (HMPS) modeled after the Toyota Performance System (TPS) around 2000 — has in the past 20 years honed its just-in-time production processes to fill customers’ needs faster and more efficiently with less waste and a focus on greater quality.
In 1993, Herman Miller already was working to become more efficient, in terms of energy usage.
The company helped fund the startup of the U.S. Green Building Council nonprofit, and Herman Miller’s GreenHouse facility was then selected in 1995 as a pilot site for the development of the council’s Leadership in Energy and Environmental Design (LEED) certification process, conferring “Pioneer” LEED status on the facility, according to a fact sheet on Herman Miller’s website, at bit.ly/HMgreenhouse.
Going from increasing its energy efficiency to lowering waste and lessening its carbon footprint through the HMPS was a logical next step, even though it was precipitated mainly by the aforementioned production issues, according to Vruggink.
“We had a lot of scrap. We had a very long lead time. We were struggling with all of that,” Vruggink said. “Our senior vice president of operations at the time, Ken Goodson, reached out to Toyota and said, ‘Hey, we want to partner with you guys. We really like what you’re doing,’ and Toyota politely turned us down.”
Vruggink attributes that mainly to the fact that in the 1990s, many manufacturers were looking to save money by laying off workers while keeping production volumes the same, and Toyota was not in favor of that.
Goodson decided to try from another angle.
“During that time, one of our suppliers, Grand Haven Stamped Products (now GHSP) was also a supplier of Toyota, and they were running TPS. Ken called up their owner and said, ‘Hey, we’d love to send our people to learn from you guys; teach us everything you can in six months, and we’ll pay for everything that we need to,’” Vruggink said.
One day while representatives from Herman Miller were at GHSP learning about TPS, a delegation from Toyota happened to be there on a supplier visit.
“They noticed two random people standing in the corner, asked about them, heard ‘Herman Miller’ and thought, ‘That really annoying guy named Ken who calls us on a weekly or daily basis to ask, and we keep telling them ‘no’? They must actually be really serious about this,’” Vruggink said.
Toyota agreed to help. Their entourage came and did a site visit at Herman Miller and left the company a long list of things to fix before they could implement TPS.
“It would be like somebody coming into your house and saying, ‘Do this to your closet, do this to your kitchen and do this to your living room,’ and then walk out,” Vruggink said.
“Luckily for us, the (GHSP) owner called us and said, ‘You guys have been given a golden opportunity; follow through on this.’ We did it, Toyota called us back, and two weeks later, we were able to verify that we did all these changes, and that’s when we signed on with Toyota.”
Herman Miller signed a contract that it would not eliminate jobs because of the efficiencies TPS would create. Between then and now, the economic downturns following 9/11 and the 2007 housing crisis caused the company to implement temporary layoffs, but the hourly employees all were given the opportunity to come back after the layoffs.
TPS, or HMPS as Herman Miller now calls it, is “a system that focuses on understanding and meeting (its) customers’ needs through the engagement and development of (its) employees.”
The four philosophies Herman Miller adapted from Toyota to help guide its practices are “customer first, people are our most important resource, kaizen (the Japanese word for continuous improvement) is a way of life, and we have a shop floor focus.”
Vruggink said most people think of a “customer” just as the end user, but on the production line at the GreenHouse seating assembly plant and in its other production settings, Herman Miller employees are challenged to think of their “customer” as the next person in line.
“If I’m a command team member of the people who are bringing the parts to the line, my customer is the line,” Vruggink said.
During the Business Journal’s tour, he pointed out that the employees on the line, as they build chairs, all do small motions thousands of times a day that are meant to help the next person in line do their job better.
“They’re going to turn the chair ever so slightly or lift it or do something with it for that next person. It’s, ‘How do I present this for my customer?’ The customer is always first — and always knowing that we’re driving the business forward — and we want to make sure that we’re setting up the next person to succeed.”
The management system at the GreenHouse is set up so team members out on the floor, called facilitators, act as a support and problem-solving system for the line workers, coming to the aid of whoever has hit the help button — which is called the “andon” button at the GreenHouse and is accompanied by a song — because every second and half-second matters when each chair takes less than 20 seconds to produce.
The GreenHouse operation currently produces 17 chairs — including the Aeron, Cosm, Embody, Mirra and Celle — in the same space it used to produce three chairs during the mid-1990s. It now operates with 10- or 20-day lead times versus the three-month lead times it was struggling with for its pedestal assembly business before consulting Toyota.
The dramatic rise in efficiency is possible in part because, under the lean manufacturing model, Herman Miller does not build anything to warehouse. Its products are made for specific customers and shipped to them as they are finished. The systems all have been streamlined and standardized so that everything built on the line is done in a uniform and exact way with minimal waste. When problems arise, workers are trained to document them, and the team works together to adjust their approach to prevent future slowdowns.
Vruggink said although he can’t discuss specifics, three or four more products currently are in the mix and about to be rolled out. The production team will adapt its existing lines to build the new products, so the GreenHouse won’t need to be expanded.
Under the HMPS, Herman Miller always is working toward “true north,” a “mythical direction” that represents a perfection the company knows it will probably never reach but will always try to achieve, Vruggink said. It will do so by concentrating on the safety and success of employees, and increasing quality, flexibility and reliability for customers while reducing lead times.
“You’re either moving forward or you’re moving backward,” Vruggink said. “If we don’t keep trying to get better, somebody else will, and they’ll pass us.”