The room was full of Lincoln Electric sales trainees listening attentively to a veteran sales representative. His advice was to work smarter, not harder. John Stropki, then relatively new to Lincoln Electric, didn’t necessarily agree.
“The more I thought about it, I realized there’s always going to be somebody who’s smarter than you,” says Stropki. “And if your philosophy is you’re just going to work harder, there’s always somebody who’ll work harder than you. But what if you couple the two together … that’s a pretty tough combination for people to beat.”
Over the next 29 years, Stropki worked both harder and smarter, rising through the ranks to national sales manager. He became president of Lincoln Electric’s North America division in 1995.
Since his time as a sales trainee, Stropki has driven change, taking the 100-year-old arc-welding company into a new century by focusing on finding a new way to manufacture its product.
“We’ve focused on industry best-of-class, not welding industry best-of-class,” he says.
Improvements are difficult to implement at a traditional organization, but for Lincoln, a large-batch manufacturer, it was a monumental task. Traditionally, Lincoln concentrated on big batch manufacturing runs, large inventories and a piecework pay policy that encouraged mass production.
But manufacturing was changing, and for Lincoln, as inventory grew, so did the order backlog. More flexible and efficient companies were outperforming larger, traditional manufacturers, and something needed to change.
With the help of his staff, Stropki reworked Lincoln’s manufacturing philosophy top to bottom. But even with significant changes, Lincoln kept many of the strategies that were part of its history, like employee profit-sharing and promoting from within.
One major change was the revamping of Lincoln’s plant. The company replaced outdated machinery with state-of-the-art equipment and re-engineered the manufacturing floor to eliminate production redundancies. It cleared out warehouses overfilled with raw materials and changed suppliers to accommodate just-in-time delivery capabilities rather than bulk discounts.
Many operational improvements were driven by the need to incorporate e-commerce.
“We recognized that we had to be operationally excellent in order to be able to take advantage of what e-commerce would require,” says Stropki.
New technology coupled with other changes had a profound effect. On the administrative side, Web-based platforms allow customer inquiries to be received via the Internet rather than through the front office.
“If your goal is to get an order in an expedient, cost-effective way, you have to be able then to fill that order in an expedient cost-effective way,” says Stropki.
Approximately $75 million and many logistical improvements later, Lincoln had decreased machine downtime and increased the number of cross-trained of employees.
The risk has paid off. Under Stropki’s guidance, Lincoln has remained a competitive player, with approximately $1 billion in sales last year.
In the world of big manufacturing, change is a necessity for survival, and Stropki and Lincoln’s management recognized that.
“The business used to be a slow, steady go — just drive costs out of the manufacturing side,” says Stropki. “My view is that Lincoln relied too heavily on the workers to outperform their peers without providing the necessary investment in tools to get additional leverage.”
The only thing constant in life is change. And by embracing change, Lincoln has been able to stay profitable while many other traditional manufacturers went out of business.
“Change is embedded in the organization in both product and methodology,” says Stropki. “I think we hire very intelligent people, and now we’re giving them the tools to use that intelligence and work ethic and have the best in class manufacturing.”
