The fenestration business these days is subject to epic pressures including the volatile housing market, high interest rates, tight labor markets, and uncertain supply chains for wood, glass and other materials, all of which have been intensified by the pandemic and what’s come after.
But Chris Galvin, head of Andersen Corp., the huge maker of doors and windows, is navigating all of these challenges by relying not only on modern approaches to business cycles, inventory management and corporate culture but also by harking back to a principle of the company founder that has proven remarkably relevant to what Andersen faces today: “All together.”
“Hans Andersen was working on the river breaking log jams for what was originally a lumber company, and he rallied people by saying, ‘All together,’ to break the jams,” Galvin told Chief Executive. “We refer to that today because ‘all together’ means we share with employees in the success of the business and we share the challenges of the business as well.”
Here’s some of what Galvin has learned and is applying in his first year as CEO of the multi-billion-dollar wood-window leader based in Bayport, Minnesota, with more than 13,000 employees at more than 30 facilities:
Be deliberate on culture. Andersen, for instance, has offered profit-sharing to employees since 1914, and was a pioneer in that benefit. The company also has been creative in ensuring that its manufacturing workers can develop themselves “all together” on the job, offering, for instance, training in English as a second language across many locations — in some plants, more than half of the workforce is doesn’t speak English as their first language — and making communications in plants and online as visual as possible, to help hearing-impaired employees.
“We learned a lot from our supply-chain challenges and the pandemic about focusing on engagement and hearing the voices not only of our employees but also of our customers, so we over-index on communications with them,” said Galvin, who joined Andersen in 2002, has headed finance and operations, and was promoted to president and CEO at the beginning of this year. “You never can over-communicate.”
Go deep with suppliers. One pandemic lesson for Andersen, Galvin said, was “to get even closer to our business partners, our second-, third- and fourth-tier partners. Our success is dependent on their success. Traditionally, many manufacturers have worked on their first-tier suppliers, but we found in our [recent] supply-chain challenges that it was often the second- or third-tier supplier that was struggling with materials input into our process.
“We had to reach that far back and use lean and Six Sigma resources for continuous improvement to work with them. Part of that was building the relationships with them in the first place that we didn’t traditionally have, going in and helping them understand our growth potential and their pinch points and building those lines of communication.”
Emphasize worker integration. Andersen emphasizes training centers within its manufacturing facilities, including five within its flagship Bayport facility alone. “We bring in new team members and make sure they get trained not just day one on the line but also get trained inside these centers about safety, quality, how to use physical as well as digital tools,” Galvin said. “We give them time to practice for a good week and to feel comfortable making mistakes and going through that process.
“Once we get them on the floor, it’s about pairing them up with someone they can train with for a week, or up to five or six weeks — and not just in one role but in multiple roles. That variety, or flexibility — giving people options — is really important, for the comfort of team members. It makes all the difference in engagement.”
Use automation properly. “My view of automation is that it isn’t going to take a way a significant number of jobs in our industry, but it can assist our team members in areas where they are lifting heavy products,” Galvin said, “or work with things like glass that might be more dangerous.”
Andersen also uses automation to “integrate data flow,” he explained. “In the fenestration business, just about every window coming down the line could have a different shape, or color, and so we’re digitally enabling interactions between our products and team members so they’ll be more successful in their roles. Automating and having that information at their fingertips is really important to them [and to making] products that are mistake-free in the safest manner.”
Anticipate a downturn. Though economists keep “postponing” a U.S. recession, home resales have hit a ditch lately thanks to high interest rates, and Galvin must be back on his haunches. But, he said, “We’ve used the last 10 years to get ready for the next downturn. We’ve been building a strong balance sheet, strengthening partner relationships and capitalizing on opportunities that will help us drive share even in a down market. It’s about preparing for the normal cyclicality we see in our industry.”
Thus, he said, Andersen continues to build capacity even as it has experienced recent softness in the housing market, including a new, 550,000-square-foot facility in Goodyear, Arizona, a couple of years ago. “This fall we’re breaking ground on a 600,000-square-foot facility in the Atlanta area,” Galvin said. “So we’re going to continue to invest in capacity to make sure we’re going to fulfill the needs of our customers no matter what the environment.”
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