4 questions with Dave Goodwin
Position: CEO of Reviva, the largest national non-OE re-manufacturer of diesel engines.
Role: Sustaining and growing the business by finding new ways to provide high-quality re-manufactured solutions to its customers quickly and for a competitive price.
You told people in 2004 that your company would “get lean or die.” Why was lean so important?
Prior to 2004, we were able to sustain batch producing our engines because we were selling them to customers who bought truckloads at a time. We realized that business model was not sustainable and fired those customers. The business model we needed required producing many different models based on actual customer demand, not a forecast. Without adopting lean production processes we would not have been able to adapt to the new paradigm.
How are you retaining customers in this evolving industry?
The follow-up is very important. We’re calling back someone who has bought a product of ours, and we’re saying, “Did everything go OK? Did you enjoy it? Do you have any other friends that have a similar need?” This is really tough because it takes time, and I would like to say that two years from now, we’d see a lot from the long-term effect, because that really is going to get the customer in place and engage them in the discussion. If you can call them up and ask them about what they’re doing, I think from that strategy right there we’re going to find a lot more business opportunities.
Looking back, are there aspects of lean that you might have deployed differently?
Recently we realized that many processes that existed before we started our lean transformation were not documented and understood by the production teams. These training and documentation deficiencies were creating field warranties. In retrospect, we should have incorporated more basic skill training along with our lean education.
What, in your experience, is the best incentive for other companies looking at becoming lean?
In our batch pool, we had engines going down the line, fingers were being smashed, foreign objects in the eye—we had backaches, we had every conceivable problem. We were paying a huge premium in workers’ comp. Talking about the investment in lean, we went into it pretty strong. Our investment in lean, in going to outside consultants, was $300,000 the first year, $200,000 the second, and I think we’re down to around $150,000 now. But what we saved in safety alone—we went for 24 months without a lost-time accident. It saved us over $150,000 in workers’ comp alone. So to me, if you look at lean and don’t mention safety, you’re missing a great justification for it. It’s a very big deal for us, and it continues to be a big deal. It means a lot to the employees, to know that you really care.