New Model, New Metrics
As Buck was adopting lean accounting and ramping up lean projects at its new plant, it also invested in a new ERP system. This provided an important lesson learned that Buck mangers repeatedly cite: Don’t attempt to install a new ERP system while starting massive lean conversions. Wait until you are farther along.
Buck Knives has had to invest countless hours converting the ERP system from its traditional-accounting focus to value-stream/lean-accounting focus. The work continues. Potts is constantly refining the reports he produces for value-stream managers that document costs and profits. He does this in conjunction with lean process changes. For instance, the company is in the process of creating supermarkets at each value stream that will hold production supplies, some of which are used by everyone and currently are warehoused in a central location. The supermarkets will allow for more accurate capturing of supply costs by value stream and reduce the need for warehousing.
"Each year as we go forward, we’ll get closer and closer to having a true, actual cost for all of these things," Potts said. "This will be the first year we’ll be able to take a look at this year’s actual versus last year’s actual. So we’ll be able to fine-tune our expectations."
In addition to the finance-oriented measures, Buck is recreating is performance metrics. This need has arisen from both the cultural changes that have taken place and the obliteration of the old ERP system. C.J.Buck said this is where most of his focus as a leader is these days — asking not just what are the answers, but what should be the questions. When the new performance metrics are rolled out, they likely will be some of the most well-tuned lean performance measures created by a manufacturer. In so many ways like this, Buck Knives is an idyllic lean operation — a company that is building not just products based on lean principles, but a culture based on lean principles.
"This is a family business. It has a very specific culture," Buck said. "I like the way lean invites you to share information because sharing information can help you. That strikes me as common sense. It also reinforces that I
don’t want robots. Trained people are by far your best asset. And as people learn more and become more flexible, it adds flexibility and robustness to your operations."