A gold standard lean production system: the Madshus Business System

It is Winter Olympics in Sochi. The world’s best winter sport athletes use world-class winter sport equipment to fight for honor and gold. Just like the athletes use exercise regimens to become stronger and quicker, equipment manufacturers can deploy lean production programs to better their production. This post highlights a gold standard lean production system developed by a leading sports equipment manufacturer.

Lean sports

When Discovery Channel casts their “How do they do it?” episode of cross-country ski production, they go to the world’s oldest ski factory still in operation: the Madshus factory in Biri, Norway. Madshus—now part of K2 Sports and Jarden Corporation—has always been at the forefront of ski innovation, and they know that it takes a serious effort to remain there. That is why Madshus has just launched a company-specific lean production system: The Madshus Business System. Its goal is to accelerate continuous improvement in Madshus.

The Madshus Business System

Let me be clear about one thing: together with colleagues at SINTEF, I have been personally involved in the development of this system since 2012. My opinions are unavoidably biased. Nevertheless, Madshus has been in the driving seat. In fact, the chief executive officer, the chief operations officer, and the chief financial officer have all been part of the development team together with other key employees at the administration and on shop-floor. The Madshus Business System is the result of a 14-month development project. Just like the athletes prepare for the Olympics, nothing is left to chance when Madshus aims for betterment.

The Madshus Business System consists of a careful selection of elements from its century-long experience with ski production combined with the best of lean production and other company-specific production systems. The Madshus Business System describes “the guidelines that govern how we create and deliver the Madshus Experience for our customers, partners, and employees. It is our genuine approach to continuous improvement and increasing revenue.” It is illustrated as a dynamic and forward-pointing house of performance:

Madshus Business System_house

The Madshus Business System | (c) Madshus 2014

Madshus’ lean production system consists of modules that explain how Madshus operates: Core Values, Built-in Quality, Value-adding Processes, and, the “diamond” in the system, Innovation. All geared towards delivering The Madshus Experience. Each module is based on carefully selected principles, and each principle hold a set of tools that assist the implementation of the system. While at the first glimpse the Madshus Business System may look identical to other lean production systems, it incorporates that “big little difference” that Madshus has become famous for in the ski tracks too. Here are three main reasons why I think it qualifies as an Olympic gold standard lean production system.

A gold standard lean production system

First, Madshus Business System is rooted in the organisation. It has been developed for Madshus by Madshus. That it, it is “invented here”. All employees have seen it being developed from early drafts. Comments from the shop-floor have been systematically collected and listened to. In particular, the language has been simplified and made-to-fit with local factory slang. Importantly, the top-management has led the development. The Madshus Business System brochure is collectively signed off by both the CEO Nils Hult and the Head of the Union with the words: “Together we build the future and take responsibility for each other and our organisation”. Mr. Hult explains why: “Competing in cross-country skiing is individual sport, but making skis takes a team effort”.

Second, the Madshus Business System is tailored to the firm. It is a true company-specific production system. It is lends heavily from lean production principles, methods and tools that are already proven effective in other industries, but it also contains a strong focus on Madshus values and their particular stronghold in innovation. Besides, it is built around the Madshus logo and its simple design symbolises the light-weight and speedy characteristics of Madshus’ ski products. Presenting the system, the operations manager Tom Bjerregaard euphorically states: “This is Madshus –and that is extremely important”.

Third, Madshus Business System is lean itself. Almost as important as the principles and tools that have been selected as part of the system, are the ones that have not been chosen. Ironically, the lean philosophy holds a large inventory of principles and tools. Too many companies have abandoned their lean projects simply because they have drowned in “solutions” and lost sight of the vision. In contrast, Madshus has carefully selected a few principles and tools that fit its current situation and competence. There is no “Six Sigma”, no Japanese words. Just a simple system and a few tool templates (e.g. improvement groups, fish-bone analysis, value stream mapping) that will accelerate production of world-class skis to future Olympic gold medalists… and to you and me.

gold sochi 2014

Now—as Madshus is aware of—having a good lean production system is not enough. It is just like having an excellent pair of skis… the race still has to be done.