In 2004, the New Balance firm, manufacturer of athletic footwear, underwent a radical transformation in its business model and incorporated the Lean Six Sigma methodology in its factories. Although the Lean Six Sigma model has its roots internationally – specifically within Japan’s Toyota factories – the actual concept was forged in Motorola in 1986, and developed on the basic principle that eliminating waste in production must translate to greater value in all areas of the company (Rampersad, El-Homsi, 2007, p. 5). By 2008, New Balance was reporting substantial, if not revolutionary, rates of success in its production rates. The achievement is all the more remarkable as New Balance is one of very few such manufacturers based entirely in the United States, and consequently obligated to meet U.S. standards in wages and employment conditions.
The adoption of Lean Six Sigma has vastly enabled New Balance to maintain a market position against competitors who are able to reduce operating costs by using overseas labor. For example, prior to implementing the methodology, a pair of shoes required eight days; less than four years later, the production time was reduced to several hours. Then, the approach occurs on every level of the operation, and space itself has been drastically reduced. The third less work area translates to ease in communication and greater efficiency in basic transport during the manufacturing process. Moreover, the “value stream”, or actual production, relies today upon the twin ideologies of utilizing existing equipment in more efficient ways and taking advantage of associate input. While “Lean” is considered an evolution in the Six Sigma methodology, the emphasis of the latter reflects wholly the “lean” principle, which is the elimination of variations which, in turn, create waste and inefficiency (Goldsby, Martichenko, 2005). New Balance remains successful chiefly because they recognize that this strategy is an ongoing process, and one which may only be achieved through consideration of the workforce’s feedback.
The accomplishments of New Balance thus far are remarkable, yet the video viewed indicates that perhaps a further component would bring a greater degree of success. That is to say, as the company so consistently relies upon the input of its associates in the production processes, it would seem that a more tangible reward system would provide greater incentive to these associates. The recognition of being on a “gold” team is pleasant, but the supervisor and manager referred to no actual compensation for those employees most active in streamlining the business. These associates are primarily fueling the enormous success New Balance is enjoying, and they should be accordingly rewarded.