When we think about lean manufacturing we think about work cells, kanban cards, TQM and so on. But many people do a basic mistake. That is the mistake of not understanding the concepts on which lean manufacturing built on. Many people who copied lean manufacturing failed because they did not understood the concepts behind lean manufacturing.
We shall give a simple definition to lean manufacturing before we go further. Lean manufacturing can be defined as a systematic approach to continuously identify and remove the wastes from the system. All the tools and techniques are based on fulfillment of this simple requirement.
To identify the conceptual difference between lean manufacturing and conventional manufacturing, we will have a look at the definition given above. There is a very important word to note. That is Removing. Removing of waste from the system might not sound very different to minimization of wastes in the system, what we talk in conventional manufacturing. But think carefully. These two words are very different in the context of manufacturing (or even services).
When you think about minimizing of waste, you are thinking about the current system where you have wastes. You think about minimizing those wastes by fine tuning the system. When you think about eliminating or removing wastes from the system, you will have to find the causes for the wastes and remove them from the system. This means that you will have to redefine the process in a way that there are no wastes generated. So in the first case you live in the system where there are wastes, and struggle to get some improvement. In the later, you change the system so that system itself will not have the wastes. Aren�t they really different?
I will give you one more example to clarify the conceptual difference between lean manufacturing and traditional manufacturing. Think about Work In Progress (WIP). In a traditional manufacturing process WIP is treated as an asset which helps to run the process smoothly. Lean manufacturing though, treats WIP as a waste itself. Further, lean manufacturing treats WIP as a mirror which reflects the imperfection of the system.
I can go on and on explaining conceptual differences these systems have. But it is very important to understand one thing about lean manufacturing. Lean manufacturing is not a fine tuning to the traditional manufacturing system you had. It is a completely different system. To be able to implement lean manufacturing correctly, understand the conceptual differences between lean manufacturing and traditional manufacturing.
Japanese automaker invests in workers, Economic Club luncheon told
Friday, May 19, 2006
BY LISA CAROLIN
News Staff Reporter
The key to success for the Toyota Motor Co. is that it makes long-term investments in developing its people.
That's according to Jeffrey Liker, professor of industrial and operations engineering at the University of Michigan. Liker was the speaker at Cleary University's Livingston Economic Club luncheon on May 15 and his focus was his best-selling book, "The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer.'' The book was published in 2004 and addresses the philosophy and principles that drive Toyota's quality.
Liker has studied Toyota since 1982 and said the company stands out in every way - better technology, lean manufacturing and hard work.
"Invest and develop your people and you win,'' Liker said. "The first things many American companies cut are human resources, training and development, and (they) encourage employees to take early retirement. It's not that way at Toyota.''
Sakiichi Toyoda started Toyota on a rice farm, where he decided to make a better wood loom by adding steam engine power. He developed the ability to stop the system when a thread would break without having to use people to constantly keep an eye on the thread.
"Technology is to serve the people, not for people to be subservient to technology,'' Liker said regarding Toyoda's philosophy, which forced workers to take immediate action whenever there was a problem.
Toyoda's son, Kiichiro Toyoda, started the Toyota Automotive Co. and introduced the concept of "just in time,'' which meant that from the time the customer gives the order until the cash is collected, the company would work to shrink the production time and eliminate waste to become more competitive.
Liker said Toyota uses what he refers to as the four Ps: problem solving (continuous improvement); people and partners (respect, challenge and grow); process (eliminating waste); and philosophy (long-term thinking). He said Toyota has always encouraged employees to solve quality problems rather than hide them, by every employee taking a do-it-yourself attitude.
"Toyota has one of the most productive systems in the world because of a strong support system,'' Liker said. "Every manager is expected to deeply understand the process they are managing. Most of the improvements at Toyota are happening at the operation level.''
Toyota approaches problems as opportunities to improve, Like said, and what separates Toyota from most companies in America is its belief in a long investment in its employees.
By streamlining their operations, some companies see costs drop and output rise.
May 16, 2006
Despite sales of almost $100 million a year, Torrance manufacturer Pelican Products Inc. ran its plant like a low-cost start-up: Picnic table workstations lined the factory floor. Workers handed parts back and forth. To clear room for work, employees loaded pallets of inventory into the parking lot each morning.
"We were founded in a garage and we still did things with a garage-type mentality, only 26 years later it was a much bigger garage," said John Padian, chief operating officer at the maker of waterproof plastic cases and high-tech flashlights.
Pelican overhauled its production line four years ago, implementing "lean manufacturing" principles. Daily working capital requirements plummeted 70%. Productivity soared. Annual sales hit $105 million in fiscal 2005.
Professional audio gear maker Anchor Audio Inc., another decades-old Torrance garage start-up, recently made a similar move. Improved efficiency enabled the company to trim its workforce by more than half, increase production volume by 40% and free up money to invest in product development, owner David Jacobs said.
Manufacturers that hope to thrive in California's high-cost, heavily regulated business environment can learn from Anchor and Pelican. Both companies look to trim fat from every corner of their operations, allowing them to invest in innovation.
"To survive today you have to move faster because there is always somebody out there trying to figure out how to make your product better, faster or cheaper," said David Braunstein, chief executive of Torrance-based California Manufacturing Technology Consulting, a not-for-profit organization whose clients include Anchor and Pelican.
Manufacturing is a vital piece of the state's economic health. Factory jobs have traditionally been the ticket to the middle class for many workers. Each manufacturing job represents three to five additional jobs in the local economy, the consulting organization said.
But the sector is struggling, Braunstein said. Although Southern California would still be the nation's largest manufacturing state based on the number of manufacturing jobs here, according to the Los Angeles County Economic Development Corp., the numbers have declined sharply. Los Angeles County has lost 410,800 manufacturing jobs in the last 15 years.
Small and medium-sized manufacturers such as Anchor and Pelican can have an especially tough time dealing with rising costs and overseas competition. They don't typically have the resources of larger companies, including staff experts such as manufacturing engineers.
That's one reason the productivity gap between small and large manufacturers has increased, Braunstein said.
Teaching the principles of lean manufacturing, which moves a product rapidly through a plant from start to finish to reduce excess inventory of goods and raw materials, is one of the key programs of California Manufacturing Technology, one of 52 federally subsidized manufacturing resource centers.
"Probably a quarter or less of the manufacturers in Southern California use it, so there is potential for a lot more improvement," Braunstein said. He estimates the average return on investment in the process is two to four times its cost over the first couple of years.
Privately held Pelican had been cushioned against the cost of its inefficient operations for years, relying on a stream of new products and its high-end niche to drive sales and protect earnings.
Even growing pressure from international competitors and the expense of doing business in California was not strong enough to force the company to cut costs by sending its local manufacturing jobs to cheaper markets overseas.
" 'Made in the USA' is one of our biggest selling points" and is appreciated by customers including police departments, firefighters and the U.S. military, Padian said.
Maintaining that designation, though, has become increasingly expensive as the rising costs of labor, healthcare, real estate and energy squeeze cash flows.
"It became pretty clear to us that we would have to become more sophisticated on the manufacturing side," he said.
Pelican's lean manufacturing initiative enabled the company to make more products with fewer workers. One example: It increased output by 50% on its line of popular Sabrelight flashlights while trimming the number of workers needed to build the items by 40%.
Pelican has avoided layoffs by shifting the extra workers to new products.
"New products have probably accounted for 15% of our annual 20% growth in sales," said David Parker, the company's founder. The 69-year-old chief executive recently sold the business for $192.5 million to Behrman Capital of San Francisco, a private equity firm.
Magazine Article, Source : The Manufacturer US
Published : 18 May 2006 14:54
Martin Ashcroft reports on lean progress in US manufacturing, and the personal lean experiences of speakers at the first Manufacturer Lean Conference
April was a special month for the promotion of lean in US manufacturing. Firstly, the publication of the Lean Research Report by The Manufacturing Research Center plots where manufacturers are on their lean journey. Then, on April 25, The Manufacturer Lean Conference at The Hyatt Harborside, Boston, provided a roadmap and some high octane fuel to speed them along.
Every month, The Manufacturer publishes the enthusiastic accounts of US manufacturers who are implementing lean initiatives. Among this audience, lean is almost a religion, and the 30 to 40 companies we highlight every month demonstrate the practical benefits that lean offers. But anecdotal evidence is hardly scientific. To get a clearer picture of how lean is rolling out in US manufacturing, we surveyed our readership to find out how widespread the adoption of lean really is, and how far along the journey they have progressed. As contributors to the magazine tend naturally to be the ones who have lean stories to tell, the survey also gives an opportunity to hear from those who have not adopted lean practices and find out what’s holding them up.
The first survey question asked respondents to pick the most important attributes of a lean manufacturer, and over half chose continuous improvement. Given that this question contained 14 options, and respondents were limited to their top three, the results show a remarkable consensus. Almost half chose “responds quickly to the changing needs of customers,” while employee empowerment was not far behind in third place.
Identifying the benefits of lean, respondents cited improved efficiency and processes, followed by removal of waste as the two most associated with lean manufacturing. Reduced costs, lead time and inventory were also identified by almost two thirds. Reassuringly, only a small fraction saw workforce reduction, (the option thrown in to see if they were awake) as a benefit of lean manufacturing.
There is also a growing awareness that lean principles should not be confined to manufacturing operations, with almost nine out of ten recognizing their value throughout the entire organization. Action speaks louder than words, however, and manufacturers betrayed themselves somewhat in their answers to a later question about business initiatives, revealing that in practice, less than half had done anything about extending lean principles into business processes.
Speaking at The Manufacturer Lean Conference at The Hyatt Harborside, Boston, on 25 April, Gordon Hunter, chairman, president and chief executive of circuit protection specialist Littelfuse, exemplified these trends. “Littelfuse operates in a dynamic customer-driven environment,” said Hunter, confirming the survey findings about customer response. “They always want smaller size, lower resistance and, of course, lower cost.”
Littelfuse began to implement lean initiatives in its manufacturing operations in Des Plaines, IL, just over two years ago, and has already achieved significant results. One exercise involved restructuring a 90 foot long production line into a cell that reduced the occupied floor space by half. Workers are much closer to each other and cross-training has allowed job rotation; sharing of knowledge and experience has allowed process improvements to be made which have increased productivity by between 30 percent and 100 percent on some operations.
The next step, says Hunter, is to extend lean principles across the rest of the enterprise and into the supply chain. A pilot program on the engineering change order process has already proved “an excellent example of the applicability of this technique to a non-manufacturing/ administrative process.” Another future project he outlined was to “demonstrate to suppliers the lost cycle time associated with incoming inspection of their product, and cooperate to eliminate the need within our facility.”
Anand Sharma, author of The Perfect Engine, and president and CEO of TBM Consulting (sponsors of the Lean Research Report), commented on the proliferation of improvement programs in US manufacturing. “Every manufacturer we know is involved in an improvement program of one type or another,” he said, whether it be lean or something else. His words also reflect the survey findings. Asked which initiatives they were implementing, over three quarters of respondents were removing wasteful processes and following kaizen. Almost as many were practicing 5S. While the survey did have a few respondents who were not following any of the initiatives listed in the question, we did not give them an exhaustive list of options, confining ourselves to a narrow field of lean initiatives.
As he does regularly in his columns for this magazine, Sharma stressed the importance of customer focus, “anticipating the unarticulated needs of customers, being responsive in all customer experiences and offering a service solution that lasts well beyond the sale.” Addressing “the new market realities for 2006,” Sharma laid out a strategy he called “transformational management,” the key to which is leadership. “Lean leaders must have a clear, concise and compelling new vision to create excitement,” he said. “You must bring outside-in perspective within the organization to create a sense of urgency, then you must have ‘hedgehog’ focus on execution to achieve and exceed the vision. Finally, you must walk in your customer’s shoes and listen to uncover unique insights.”
For Peter Kampf, senior strategic initiatives manager for Raytheon Integrated Defense Systems, the lean experience is about the involvement of people. He explained how the company’s total employee improvement program (TEI) mined the DNA of its workforce to leverage early gains. Kampf spoke about transformational management, too, as a means to get the best out of people in a continuous improvement environment. Instead of the old command and control method, he said, “the essential task of management is to arrange organizational conditions so that people can achieve their own goals.” This is no text book theory. It works. Kampf reported a sales increase of 30 percent between 2003-2005, while operating profit increased 55 percent.
Lean events used to be held to persuade manufacturers to adopt lean principles. That’s no longer the case. As the Lean Research Report shows, manufacturers now realize they have to be lean, as Peter Kampf illustrated from his own experience of working for the US Navy. “The Navy used to encourage suppliers to adopt lean practices,” he said. “It doesn’t do that now, because lean is now accepted common sense and is expected.”
Lean events now have to focus on how to implement lean and keep it going. Jeff Whiteacre, value stream manager/lean champion at frozen seafood producer Gorton’s, is another whose experience revolves around the workforce. “Everyone needs to be involved,” he said. “Allow employees to own the change.” While Gorton’s has made huge advances in operational processes, Whiteacre also stressed the need to take lean beyond manufacturing into the whole enterprise, and to outside suppliers and service providers. During the educational stage at Gorton’s, one problem was communication between people who worked on different shifts. The solution was simple, as lean solutions often are. Video tapes were shot of how processes were carried out on each shift and then shown to workers on the other shifts. “I didn’t realize they did it that way,” was a common reaction.
Whiteacre gave a fascinating demonstration of supply chain value stream maps, showing how lead times and processing times have been falling since 1999 – the most striking factor being how much simpler the value stream maps have become. After one particular “kaizen burst”, a sawing process that used to take two hours was completed in three and a half minutes, using one person fewer, and with one saw, rather than two. A U-shaped cell was created with one piece flow, and adjustments made to the saw table, so that work in process was reduced from 56 slabs of frozen fish to just six. And who came up with the practical ideas? Not management, but the people who worked on the line. Whiteacre quoted a catalogue of measured improvements in every area of operation, all inspired by the workforce.
Gorton’s has managed to keep its lean drive going for some years, but others find it difficult to sustain momentum after the low hanging fruit has been picked and pickled. It gets harder as you climb further up the tree, and the temptation is strong to put up one’s feet and think the job is done. Kevin Prouty, senior director of manufacturing solutions for Symbol Technologies, calls the phenomenon the “lean dip”. Symbol won the Shingo Prize for Manufacturing in 2003 for its implementation of lean and continuous improvement, so Prouty was an excellent choice to address the Lean Conference.
Prouty warned against thinking of lean separately, as a project. It may start out that way, “but it’s part of the business. Lean is about continuous flow, not just of the product, but also of ideas.” Lean is a long arduous process, said Prouty, and the whole company must be committed, and after that, the suppliers. Complacency of thinking is a trap that will suck you into a lean dip while you are still congratulating yourselves. “Everyone should know that everything is up for grabs. If you think you have to stay the same when you get lean, you create the same environment you started with.”
Anand Sharma made a similar point. “Leadership is all about creating and sustaining a superior value proposition,” he said, and he had examples of clients who have succeeded in the sustaining game. Hayward Pools, seven years into its lean journey, increased sales by 25 percent between 1999 and 2003, while profitability grew by 17 percent a year. Productivity (sales per employee) rose over 50 percent. Sharma quoted equally impressive statistics from Pella Windows and Hubbell Corporation, stressing that what these companies have in common is a “visible, proactive and engaged leadership, with an unwavering commitment to achieve the vision.”
Andy Carlino, founder of The Lean Learning Center and author of The Hitchhiker’s Guide to Lean, focused on the choices faced by leaders when dealing with lean. “Lean is often a difficult choice between what is easiest for an organization or what is right for an organization,” he said. “Leadership is about making a choice. Lean leadership is about making the right choice.” Many lean programs fail, he says, because of the culture of the organization.
Culture can be an intangible concept to define, but Carlino has no problem with it. “Culture is common thinking,” he said, and went on to explain why it was therefore necessary to get the culture right. “Thinking drives behavior and behavior drives results.” Addressing delegates, he continued: “Most of you have accidental cultures. You didn’t make it happen that way.” But, he went on, “leadership is responsible for company culture. Get the culture right and everything else follows.”
Carlino used Toyota to prove his point. Automotive executives have been visiting Toyota plants for years, he said, then trying to copy the system in their own facilities. They mostly failed, even when they made carbon copies of Toyota’s tools and systems. Why? “Toyota is not afraid of showing you,” said Carlino, “because you can’t copy the way they think.”
Magazine Article, Source : The Manufacturer US
Zone : World class manufacturing
Published : 18 May 2006 15:02
Many manufacturers dabble in lean, trying out small scale initiatives on the shop floor. When they see a return they think they’ve done it, but those who really understand lean tell Barbara Axelson about its universal application, and the commitment required to keep going
Experts assert that lean is a function of leadership. Companies must be committed. For large organizations with multiple locations, challenges include standardizing the approach as geography and cultures come into play.
Andy Carlino and Jamie Flinchbaugh, partners at Lean Learning Center in Novi, MI, serving North American clients with worldwide operations, agree that lean is about thinking, rather than tools. “Lean is about more than manufacturing,” says Flinchbaugh, who explains that even a manufacturing company must perform design and maintain accounts payable and order fulfillment, so it is more than the act of manufacturing.
Senior management must understand lean and the ways to develop the culture, which will obviously require more time and commitment than quick fixes. “It’s not necessary to understand every technique,” says Carlino. “Start at the top, it depends on the variables – what baggage, what culture. We suggest a parallel path, one that has tools for quick returns. It’s about ‘show me the money’ from a company’s standpoint.”
Once on the path, you have to stay there, too. It takes a lot of sustaining. “A fatigue sets in after you’ve taken a big swipe at inefficiencies in your company,” says Kevin Prouty, senior director of manufacturing at New York-based Symbol Technologies, a manufacturer of wireless devices and mobile technology. A former winner of a prestigious Shingo award, Symbol implemented lean in Prouty’s plant. However, he explains, “the rest of the company didn’t and we lost potential benefits.”
Prouty categorizes companies into those who have fully implemented lean, such as the big automakers; those trying to implement it in fits and starts; and those who haven’t done anything. The latter is the majority. It takes a concerted effort. A lean champion will confirm it’s a way of running a business, rather than a project. “Companies who say ‘we’re already lean’ — that makes them fall off the edge of lean. They say ‘we don’t need all these tools.’ That’s the biggest pitfall. If lean is done properly, it changes the company. It’s a core change, like having, or not having, electricity.”
Flinchbaugh agrees. “The minute you declare you’ve achieved lean, you’re not lean! It’s how you do everything, not just a workshop. “You don’t ‘get’ lean – you’ll never get there. Leaned out inventory, which significantly reduces goods, can be impacted by catastrophes such as 9/11. Companies need to know that they are now more fragile.” “Organizations chase lean tools and do not get into the lean thinking,” cautions Carlino. An organization may use tools like 5S or visual management and see some gain, but then may slide back. Carlino says it’s somewhat like throwing a tool, like a hammer, at an organization. “Lean must first be understood. An auto mechanic with a wrench must understand the car.”
Lean also includes partners and suppliers and distributors. Symbol’s Prouty maintains that lean is not fully embraced by nearly enough manufacturers. “A lot of companies say it, but only use it to implement a superficial piece of their organization. You can lean isolated points of the company, but you need to change how they interconnect parts of the business. You have to look at suppliers and customers — that’s the hard part, although there are some ways that you can isolate yourself from non-lean companies.”
“We’ve done quite a bit with lean,” says John Smith, senior vice president and chief operating officer at Ross Controls, a manufacturer of pneumatic valves, controls systems, and safety products for the fluid power industry. “We had realized we weren’t going anywhere and, internally, we knew we’d have to change our culture and way of thinking.” As an international company, top people from each country, plus corporate management (CEO, COO, CFO, legal counsel, HR, heads of sales and engineering), attended a week of training with a consulting company that came onsite and then followed that up by working with Lean Learning Center.
Describing himself as a type A personality, Smith says: “You cannot do it yourself. You have to rethink the management of people. My job is to promote others through education, coaching and mentoring for their betterment, so people feel needed and have a place and can make changes. For true empowerment, people must feel it.” Ross Controls started with manufacturing, believing that if there were good results there, then other areas would come on board. The chief steward of the unionized plant in Michigan went to classes with others from the company and, after some initial hesitation, found that he could participate and could help convince those on the shop-floor of lean’s value.
You don’t get anywhere until you have the lean mindset, Smith points out. When his group was in class, “we thought ‘pretty good stuff! Let’s 5S this area!’ But we weren’t really making progress because we had the old thinking in our heads. We felt ‘I knew all this, but I don’t think of it this way.’ I thought that was very intriguing. The first and second day, you’d say, ‘I’ve known all this.’ But then you’d get lean eyes and say, ‘I never looked at applying things this way. I always wanted this.’ But did you really? The whole group needed to be shown. Input matters. There needs to be high agreement.”
The plant floor at Ross Controls has had impressive changes with inventory reduction and process improvement in throughput and measurement, in delivery, quality, safety and morale. When the company’s four key measurements (on-time delivery, productivity, cost of sales and inventory-to-sales ratio) move in the right direction, it’s a good sign.
Prouty says that many companies see lean as primarily a manufacturing concept. “Senior management at Symbol sees value in manufacturing. We have several continuous improvement processes, including how to introduce product, usually a step that follows initial lean implementation; this ties to manufacturing. The next step would be to put in place processes to resolve issues around the lean concept.
“All senior management people should be lean champions,” he continues. “We have workout teams. Six sigma is usually a next step. It provides a framework to collect information on problems to make them better or to solve them, a continuous improvement tool.” Smith points out that as the lean journey progresses, everyone usually needs help. “You have to have a champion, someone relentless, because it’s so easy to stop. All sorts of new problems, overseas issues, or everyday distractions can deter you.”
Another warning is not to become consultant-dependent. Even the consultants agree on this one. Lean Learning Center describes its mission as to partner with clients, to transfer skills and knowledge, and “work ourselves to the point of disengagement. Consultants may be put in different roles as changes occur.” Carlino explains that adults need to learn by application and the power of repetition; the more you hear it, the more you grasp it. He also recommends cascade teaching, which rolls down through an organization – the idea that if your boss is teaching you, you will pay attention, and others will then do so as you teach them.
Prouty adds a caveat: “I’d like to point out that one reason we see lean taper away is senior management change, especially just as a project is wrapping up. The concept must be ingrained in the company culture and in the middle management layer as well. Win over the CEO and the middle management level. Make sure that learning is balanced.”
During a second class on leadership, the question was posed to Ross employees: “What will you do differently when you go back to work?” Smith answers that you have to rethink the way you think about your people. Change is what it’s all about. What lean does is teach ways to make change and to have people make change.
Remembering that lean values the individual, Smith suggests that you imagine the worst person in your company. You may think what a difference it would make if this person would leave. But, in reality, someone else will assume that position. The challenge is to mentor that person. “Lean leadership is all about that — the person has the ability. The responsibility is on management to be one team, one company, one person at a time.”
Sheffield printers are the tops when it comes to adopting lean manufacturing techniques.
Judges of the British Printing Industries Federation's Excellence Awards couldn't choose between two of them for the 2006 Best Lean Printer Award.
Loxleys Print, the Aizlewood Road greetings card specialist, and Northend Creative Print Solutions, less than half a mile away in Clyde Road, Heeley, shared the award.
It honours the firm which had transformed its operations by advanced manufacturing techniques and best management practices to eliminate activities which do not add value for customers.
Judges praised the energy and enthusiasm with which lean manufacturing was embraced at Loxleys as truly impressive: "Loxleys have been bold in their adoption of Lean, not afraid to challenge traditional thinking and to reinvent themselves along the way – a process that continues."
Of Northend, judges said: "The company's predisposition towards customer service and a genuine commitment to develop staff and employees has led to strong use of Lean tools and techniques appropriate to respond to the demands this creates. Their work has yielded both excellent results and fine examples of best practice."
Tim Carrington, managing director of Loxleys, whose 70 staff print, finish and pack 80 million greetings cards a year, said: "Naturally, we are delighted with our success.
"I first started taking an interest in Lean thinking and working about seven years ago to see how it could be applied to our sector. In what is a very competitive market, you have to adapt to stay ahead."
Nigel Stubley, managing director of Northend, said: "Because they attract the cream of the British printing industry, these awards are highly coveted. The fact that two Sheffield companies have shared one of them reflects well on the city.
"It also sends out a very positive message to the customers."
09 May 2006
While 80% of manufacturers have lean initiatives, less than 1% have lean practices in place.
By Pamela Lopker, president and chairman of QAD Inc.
May 10, 2006 -- Manufacturers continue to make great strides in adoption of lean and just-in-time manufacturing techniques to cut waste and delay from their operations. In working with manufacturers over the past 25 years, I know first-hand that lean manufacturing is serious business. By now, I'd estimate about 80% of U.S. and global manufacturers have lean initiatives.
Yet less than one percent has lean practices in place. Why?
There's still a blind spot in manufacturers' "lean" vision. That blind spot is supply chain communications.
Economists theorize that access to the right information at the right time creates conditions for what they call a "perfect" market. The e-mail, fax machines and telephones that are still the mainstays of manufacturing supply chain communication don't get information to the systems that need it any faster than people can re-enter the data -- hopefully, accurately. By improving supply chain communications manufacturers can aim for the perfect lean market. In the perfect lean market, manufacturing data moves through the supply chain unconstrained by geographic, technical or business obstacles; it doesn't depend on human intervention to get data from one business partner to another.
The perfect lean market exhibits more than waste minimization. The right data at the right time and place might help a manufacturer act before a supply chain or component glitch puts flawed products on the shelves. AMR Research recently cited the supply problems that caused Motorola to stop U.S. shipments of its white-hot Razr phone with a faulty part, and that brought Apple unwanted attention for easily damaged screens in the iPod nano.
What's more, the perfect lean market can provide insight from your office into plants in Europe or South America. The right information at the right time could let you trace and recall only goods containing parts from a specific assembly lot. By introducing timeliness and clarity into supply chain communications, the perfect lean market could serve as a venue for trading partners to collaborate and achieve collective competitive advantage.
The Makings Of A Perfect Lean Market
There are three primary attributes to a perfect lean market. Clarity is one: It characterizes the way data is communicated and the way the supply chain connects. Open standards for technology help create a foundation for perfect lean market conditions by enabling seamless supply chain communication. The Automotive Industry Action Group (AIAG) is one entity that's making strides toward clarity. AIAG is working hard to establish standards for inventory visibility and other functions, such as engineering, quality and warranty and recall.
The second attribute of a perfect lean market is agility, responsiveness to changes in the marketplace. Certainly, lean qualities are important to agility - witness companies such as Sanyo and GM shedding non-core businesses in order to focus and presumably, to eliminate distractions that slow down decision-making and action. But lean practices won't get information to the right place at the right time. That's where technology can introduce agility, through systems that can receive and process information quickly, even instantly, through automation.
Unity is the third attribute of a perfect lean market. For example, Gorton's -- the food manufacturer -- has challenged suppliers to adopt lean practices, and one packaging vendor cut inventory down to a week and also improved service levels. If Gorton's and its vendor can collaborate consistently, they'll likely respond to events more quickly -- and competitively. Getting information to the right place at the right time can fuel that kind of unity. And as manufacturers continue to pair low-cost overseas production with domestic final assembly, this kind of unity will become essential.
Eyes Wide Open
The Aberdeen Group's recent "Lean Benchmark Report" (March 2006) ranked 20% of the study's 300 participants as best-in-class for lean practices including supplier collaboration. Nevertheless, almost a third of study respondents were challenged with integrating both other parts of the company and all their suppliers into their lean programs.
The good news is that in devising their lean strategies these manufacturers haven't turned a blind eye to the supply chain. Technology can help - the tools exist today. Now it's up to manufacturers to commit to supply chain communications with real urgency and rigor. Manufacturers stand to profit by a wealth of prospective benefits, from compliance and resource consolidation to customer responsiveness and ultimately, bottom-line success.
Thursday May 11, 11:00 am ET
TEWKSBURY, Mass., May 11, 2006 /PRNewswire/ -- Raytheon Company's Integrated Defense Systems (IDS) has demonstrated continued success in manufacturing excellence as two business centers were announced as recipients of the prestigious regional Shingo Prize for excellence in lean manufacturing.
"Being awarded the Shingo Prize at two IDS centers is a testimonial to our commitment to being a value-added business partner to our employees, suppliers, partners and customers," said Dan Ryan, IDS' vice president of Operations. "The prize signals that we embrace lean practices, provide world-class manufacturing performance, and are committed to continuous improvement. Lean manufacturing is how we provide 'No Doubt' to our warfighters."
This marked the second straight year Raytheon IDS' Integrated Air Defense Center, Andover, Mass., received a Shingo Prize for excellence in lean manufacturing; the center received the prestigious Gold Award. This is the first recognition for the Maritime Mission Center, Portsmouth, R.I., which received the Silver Award.
Dubbed the "Nobel prize of Manufacturing" by Business Week, the Shingo Prize is recognized as the premier manufacturing award and recognition program in North America and honors companies that demonstrate a commitment to lean through the implementation and execution of lean manufacturing strategies to drive superior quality, value and enterprise-wide results.
Integrated Defense Systems is Raytheon's leader in Joint Battlespace Integration providing affordable, integrated solutions to a strong international and domestic customer base, including the U.S. Missile Defense Agency and the U.S. armed forces.
Raytheon Company (NYSE: RTN - News), with 2005 sales of $21.9 billion, is an industry leader in defense and government electronics, space, information technology, technical services, and business and special mission aircraft. With headquarters in Waltham, Mass., Raytheon
KNOXVILLE, Tenn., May 4 /PRNewswire/ -- A University of Tennessee professor is part of a team that won the prestigious Franz Edelman Award for generating increases in U.S. military revenues valued at $49.8 million annually by radically streamlining the maintenance and repair process of the Air Force's largest transport plane, the C-5.
The work took only eight months and cost less than $1 million.
UT professor Mandyam Srinivasan, together with Warner Robins Air Logistics Center in Georgia and software provider Realization Technologies Inc., won the competition that's been called the "Super Bowl" of business operations research and management sciences. Five finalists competed for the top prize, which was awarded May 1.
Srinivasan, the Ball Corp. Distinguished Professor of Business, is an internationally renowned expert in Lean Management and Theory of Constraints. He is a core member of the UT College of Business Administration's executive MBA and Lean Enterprise faculty.
Winning project
Warner Robins Air Logistics Center is a primary U.S. Air Force maintenance and repair facility for the C-5, C-17 and C-130 transport planes and the F-15 fighter jet. The C-5 is the largest transport plane flying, but it is an aging, out-of-production aircraft, according to the team.
Before UT became involved in Warner Robins' operation, C-5 repairs took an average of 240 days and the facility had up to 13 C-5s -- or more than 10 percent of the fleet -- under repair at one time. Because a C-5 can generate at least $40,000 in daily revenue by transporting goods for the various branches of the military, more than $500,000 of potential income was tied up per day by planes under repair in the facility.
Warner Robins was under significant pressure from the U.S. military to reduce maintenance turnaround time and get more planes flying.
Bill Best, deputy director of an aircraft maintenance group at Warner Robins and graduate of UT's Aerospace MBA program, partnered with Srinivasan to meet the challenge. As part of his Aerospace MBA program, Best had worked with Srinivasan to significantly cut costs in another area of the center and realized the potential of applying a business tool called Critical Chain Project Management to the C-5 project.
Critical Chain Project Management helps facilities analyze processes and use resources more efficiently. Realization Technologies Inc. is the provider of Concerto, a well-known software for implementing Critical Chain Project Management.
By implementing this business practice, Warner Robins was able to reduce C-5 turnaround time to 160 days and the average number of C-5s under repair from 13 planes to seven.
Annual revenue and cost savings implications from this program have been enormous, the group's data show. Having five additional planes operational at a time generates an estimated $49.8 million annually. The cost for replacing the capacity of five C-5s, should that have been necessary, would have been about $2.37 billion.
Also, because of the extra workforce capacity generated through these efficiency improvements, Warner Robins is expected to bring in additional revenue of $119 million through 2008 and $248 million through 2009. By having fewer C-5s under repair in the facility, 11 dock spaces are now available for other work. Had the center opted to build 11 new dock spaces the cost would have been about $220 million.
Ken Percell, the senior-most civilian at Warner Robins noted during the awards ceremony, "There is another key consequence that we measure not in dollars, but in human lives. The five C-5s returned to the Air Force will immediately reduce dangerous convoy operations in combat areas, saving uncounted lives that might have been lost in these dangerous operations."
Srinivasan said reducing the number of aircraft in the repair facility also means there is less competition for limited resources. Repair teams are able to focus on fewer jets at one time, and maintenance quality has improved.
With the C-5 success under its belt, Warner Robins is implementing Critical Chain Project Management on the C-130s to reduce its work-in-process from 24 aircraft down to 15.
Author: RP news wires
StockerYale Inc., an independent provider of photonics-based products, on April 25 announced it has implemented a lean manufacturing initiative.
Mark Blodgett, president and chief executive officer, said that StockerYale's Montreal manufacturing facility has implemented a lean manufacturing initiative for its laser production lines. Lasers represent approximately 80 percent of the revenues generated in this facility.
The Montreal site selected a cross-functional team and worked with Bell Nordic, a Canadian consulting and training firm, on team leadership and self-directed work team training. The company chose Bell Nordic to facilitate employee empowerment and mobilization for the kaizen approach to lean manufacturing. After training, the kaizen team implemented a revamped process flow for better customer response through shorter cycle times, improved product quality and for reduced waste costs from scrap, rework and warranty expense. Additional continuous improvement projects underway this quarter will complete a 5-S manufacturing environment and streamline strategic processes.
"During the development of the 2006 budget, it became clear that, in order for the company to meet its intentions of being EBITDA positive in 2006, the company needed to become not only more responsive to its customers, but also more efficient in its operations," said Blodgett. "Our customers demand absolute quality, on time delivery, short lead times and the ability to have customized products that meet their needs. We believe that implementing lean manufacturing will enable us to meet these needs.
"In addition to the physical changes in our Montreal facility, we have also implemented a series of metrics that enable us to see when we have issues on the production line or in other parts of the Montreal operation. We have not stopped these process changes at just the production line, as we are now looking to streamline our order cycle process to ensure quick responses to our customers and reduce administrative cycle time. Next, we will also address our supply chain process to eliminate non value-added activities there as well."
StockerYale, Inc., headquartered in Salem, N.H., is an independent designer and manufacturer of structured light lasers, LED modules, and specialty optical fibers for industry leading OEMs. In addition, the company manufactures fluorescent lighting products and phase masks. The company serves a wide range of markets including the machine vision, industrial inspection, defense, telecommunication, sensors and medical markets.
President receives Rotary Club award
By Richard Ryman
rryman@greenbaypressgazette.com
Tweet/Garot Mechanical's office sits on a hill overlooking southwest Green Bay. That's appropriate, because in his time at Tweet/Garot Tim Howald has developed a knack for seeing over the horizon.
Because of his business success and community involvement, Howald is the 2006 recipient of the Rotary Club of Green Bay's Free Enterprise Award, which will be presented Monday night at the Radisson Hotel & Conference Center in Ashwaubenon.
Howald's company was among the first to use mobile phones ?when they weighed pounds instead of ounces ?and fax machines and a safety director.
"We got accused one time of being a little extravagant," said Mike Sturdivant, a Tweet/Garot vice president who has worked with Howald during his leadership of the company. "We had the first cell phones. That was one of the best tools we've ever bought."
Howald's community involvement ?both the known and the not advertised ?also has been significant.
"We've had people that have family issues, and Tim very quietly gave them time off and paid them for it, and maybe even gave them money," Sturdivant said.
Major Bob Fay of The Salvation Army in Green Bay said Howald has been involved in numerous projects over 17 years, always bringing his organizational abilities to bear.
"That's a particular gift of his," Fay said. "He not only has the ideas, but he's right there to direct traffic and see them through to completion."
Howald's road from Euclid, Ohio, to Green Bay ran through West Bend, Ind. Howald was a sophomore at the University of Notre Dame when he met his future wife, Judy Tweet, who was a freshman at St. Mary's College.
That, in turn, led to working two college summers as a laborer for Tweet Brothers Plumbing & Heating, followed by a couple of years with Procter & Gamble Co. in Cincinnati after graduation. Returning to Green Bay to be closer to family, Howald joined his father-in-law, Andy Tweet, at the plumbing company.
"Andy had all these ideas about growing the company. He made it all sound simpler than it was, quite frankly," Howald said.
Simple or not, they moved forward, merging Tweet Brothers, Edward Garot & Son Plumbing and Heating and Withbroe Sheet Metal in 1979.
Howald ran the sheet metal segment of the business, but became responsible for the whole thing when Andy Tweet died of a heart attack at age 56. Howald was 33.
"I was coming at it from a college MBA, so who is going to deal with the bankers, the bonding company? It was a logical fit," he said.
He did not, however, run the company alone. Tom Brawner and Sturdivant, who ran the plumbing and piping segments, respectively, have been Howald's constant companions in the management ranks, joined by Ray Withbroe in the late 1980s.
"It's amazing how we all got along," Howald said. "I cannot ever remember one of us saying a cross word to the other person. We are close friends. Our families are friends."
For many years, Howald served as company president and ran the sheet metal division.
The trio worked hard to make the company reach and surpass Andy Tweet's vision.
"You ran the business during the day and did the estimating at night," Sturdivant said. "We were all busy enough we stayed out of each other's business."
Sturdivant said it was still a small company when Tweet died. Howald took it to the next level.
He wasn't left adrift when Tweet passed, Howald said.
"A lot of the things Andy exposed me to, I wondered 'Why was I here?' In hindsight, I know why," Howald said.
Innovation has been a significant factor in the success of Tweet/Garot. Computers, safety managers, prefabrication, modular units, Lean construction techniques; all were adapted.
"We brought our guys in and said we are going to empower you to do more things," Howald said. "We had fax machines and cell phones as early as we could to facilitate that."
Howald hired his first safety director in the early 1990s, a move that was questioned by friends and peers.
"They said the company wasn't big enough. I said we were too big not to," Howald said.
Employees are in the midst of a streak of more than 2.5 million hours without a lost-time accident.
"We get a project, the first meeting we have is about safety," he said.
The company also spearheaded a project among contractors to develop a statewide drug-testing process acceptable to clients. Sturdivant said more and more clients were requiring testing, but with different standards.
"Our company was instrumental in setting up that program," Sturdivant said. "The Lambeau Field renovation project adopted our guy's program. They had him do it for them."
Tweet/Garot continues to seek ways to cut costs while still providing quality work, which Sturdivant says is the key to everything.
"We want to make sure it's done straight, level and right. Tim's the leader of that," he said.
Howald said the company is adopting Lean construction, which is more difficult than Lean manufacturing because the geometry changes with each project.
"We know we can save steps doing it. We know we can better utilize our manpower," Howald said.
The company already improved efficiency by prefabricating many of its products, such as for bathrooms in a given building. There is a prefabrication shop on Velp Avenue.
"We don't put the thing together on site. A guy has about a 10-minute connection. He doesn't spend three hours in there," Howald said.
Howald and crew have brought that same sort of organizational ability to The Salvation Army's Christmas dinner for a decade. Over the years, the dinner grew, and so did Tweet/Garot's participation. Thirty or 40 people volunteer for the annual event.
"The Salvation Army has said they've never seen people that work so well together. We get an incredible amount of work done," Howald said.
Employees also are encouraged to be Salvation Army bell ringers and to volunteer for other community projects.
Howald said involvement in the community "is absolutely essential."
Sturdivant said both Howalds share that view.
Howald said he met many of the previous Free Enterprise Award winners while doing outside projects.
"A lot were through community organizations. Those people have always been so important to these efforts," he said. "What the CEOs of these companies bring are their leadership skills, the skill of their companies and the number of their employees."
Switching to modular workstations has enabled a petroleum tank truck products manufacturer to introduce highly adaptable production cells as part of its ongoing lean manufacturing programme.
Switching to modular Lean Tek workstations from The Tube and Bracket Company has enabled Emco Wheaton to introduce highly adaptable production cells as part of its ongoing lean manufacturing programme. The new self-contained production cells can be modified easily and rapidly to support changing manufacturing requirements and priorities and deliver continuous business improvement. 'We are aiming for maximum flexibility in manufacturing methods and what we manufacture so that we can adapt to changes in the market as soon as possible,' said Brian Langsdon, production controller at Emco Wheaton.
'I wanted something that I could take apart and adapt whenever I wanted.' Emco Wheaton has made products for the safe handling of hazardous fluids for over 50 years and is the world leader in design and manufacture of petroleum tank truck equipment.
The company, part of Gardner Denver, has recently opened a new facility in Margate, UK, where it has been based since 1953.
For the last two years the company has been adopting lean manufacturing to replace its traditional batch and queue production.
The objective is to optimise the overall production process and implement cellular manufacturing and related concepts such as single piece flow, Kanban and 5S to support highly flexible production processes and continuous business improvement.
When it started its lean manufacturing programme the company fabricated its own workstations by welding steel components.
These workstations performed well and provided an interim solution but as the programme developed the company recognised that greater adaptability was required so that production cells could be modified and configured to meet evolving production requirements.
'The key benefit of working with The Tube and Bracket Company is the partnership we have developed,' said Langsdon.
'We discuss ideas and they come up with a solution quickly.' Working to Emco Wheaton's basic specification The Tube and Bracket Company devised and built ten workstations with modular Lean Tek components.
The range of interchangeable and reusable components includes tubes, brackets, wheels and accessories that can be assembled into lightweight and manoeuvrable workstations, carts and trolleys that offer greater flexibility and cost effectiveness than comparable devices made from welded steel and similar materials.
The workstations were designed specifically to be self-contained for use in production cells for two of Emco Wheaton's core products.
They include areas for product working and assembly and incorporate ancillary facilities for lighting, power and air supply.
Production schedules and other information can be displayed on small noticeboards integrated into the overall design.
Each workstation is mounted on locking wheels and can be moved or repositioned easily by one person.
In line with lean manufacturing thinking the workstations have been designed to optimise the working environment and occupy exactly the right amount of space for the process they support.
The modular nature of their construction means that they can be modified whenever production requirements change by altering the basic dimensions or by the addition or removal of components.
'The Tube and Bracket Company has given us nice clean workstations which include all the accessories for these production cells,' said Langsdon.
'It is key to the factory that everything has its place and it becomes obvious when it's wrong.' The Tube and Bracket Company assembled the workstations at its factory in Banbury and delivered them to Margate.
Small modifications were made during installation to ensure that the production cells were optimised for maximum efficiency.
Further beneficial changes were made as the production cells went live.
Each workstation originally had two locking wheels but it was soon realised that four would be provide better stability.
The Tube and Bracket Company supplied and fitted the additional components on site.
The workstation noticeboards were also repositioned to make them easier to see.
'We could not do this with a welded workstation,' said Langsdon.
'If a cell is not right we can take it apart and rebuild it.' The new production cells will enhanced Emco Wheaton's lean manufacturing capabilities and help it to introduce single piece flow for its core products.
As the company continues its drive towards lean manufacturing it plans to standardise on adaptable modular solutions for its production cell workstations and other equipment.
'One of the challenges with this type of change is that it is an ongoing process,' said Langsdon.
'We wanted to work with a company that understood what we're doing and could help us provide a uniform solution throughout the factory.' The Tube and Bracket Company provides lean manufacturing solutions that help deliver Kaizen-based continuous performance improvement to customers in manufacturing, engineering and production.
Its modular LeanTek system comprises coated steel piping, joints and fixtures that can be assembled into a variety of solutions including live storage, carts, trolleys and ergonomic workstations for use in Kanban and first-in-first-out stock management and throughout the manufacturing process.
These can be modified or reconfigured quickly and easily to meet process change.
The company offers a complete range of consultancy, project management, design, build and component supply services.
From: Inc. Magazine, May 2006 Page: 86 By: Chris Lydgate Photographs by: Blake Little
The CEO "We were losing money," says CJ Buck, who took the company's reins from his father in 1999. "And there was no end in sight."
Soaring business costs in California were driving Buck Knives to the brink. The company regained its edge by dismantling its factory--and putting it back together 1,453 miles away.
Rising out of the snow-dusted fields like a gargantuan block of Post-it notes, the Buck Knives factory in the Idaho panhandle looks for all the world like a Northwest native. From the basalt columns adorning the driveway to the moose trophy gazing implacably down on the lobby and the spectacular chandelier built of antlers, the building feels like it belongs here, where the unyielding prairie of the Columbia Plateau confronts the chill hauteur of the Selkirk Mountains.
Appearances can be deceiving, however. Depending on how you look at it, Buck Knives is a transplant, a refugee, or a pilgrim from southern California. The story of how Buck moved its knife manufacturing company from the dusty, sun-drenched hills of El Cajon to this rugged patch of Idaho turf is a case study in business relocation. If it's true that geography is destiny, then Buck's voyage demonstrates that you can shape your destiny if you're willing to redraw your geography.
A California institution
In 1999, a few months before his 39th birthday, CJ Buck received an unusual heirloom: the family business. For a guy who had spent his entire professional life working for the company, it should have been a magical moment. Buck Knives enjoyed loyal customers, great name recognition, and a tradition of quality forged by his great-grandfather, a blacksmith apprentice named Hoyt Buck who got tired of sharpening grub hoes and in 1902 decided to grind his own blades instead. After years of experimentation, Hoyt came up with a secret tempering technique that produced knives that were so sharp, and so hard, they could whack a steel bolt in two. He co-founded the company with his son, Al, in 1947. Buck's Folding Hunter, introduced in 1964, quickly became the top-selling outdoor knife in America and earned a permanent spot on the Christmas lists of Boy Scouts around the world.
From its origin in a wooden lean-to, the business had grown into a California institution with $33 million in annual sales and 260 employees cranking out more than a million knives a year. But along with the traditions, CJ inherited plenty of headaches. Margins had been sliced to the bone by low-cost Asian competitors, which left the company chronically short of cash. Energy costs, a key factor in tempering blades, were creeping up. The company's work force was experienced, but it also was expensive. "We were losing money," CJ says. "And it looked like there was no end in sight."
One of CJ's first moves after taking the reins was to revamp the company's executive staff. Working closely with his father, Chuck, Buck's chairman of the board, the new team reorganized its marketing strategy, crafting distinct messages for various sorts of customers, such as climbers, hunters, police officers, and military personnel. It streamlined the manufacturing process at Buck's sprawling plant in El Cajon, a suburb of San Diego, and began to make some low-end knives in Taiwan.
These initiatives helped boost sales and trim costs, but they weren't enough. In the spring of 2000, San Diego became the first region of California to taste the delights of energy deregulation. Electricity rates went haywire, soaring from 12 cents a kilowatt-hour to a peak of 42 cents. The spike was subsequently revealed to have been triggered by energy traders seeking to manipulate the market, but that wasn't much consolation to Buck, which consumed 300,000 kilowatt-hours every month. "The numbers were mind-boggling," says Phil Duckett, a burly Welsh engineer who is Buck's executive vice president. But the company couldn't raise prices without ceding market share to the competition.
If there was a bright spot, it was that Buck's new manufacturing process--which organized workers into small groups rather than a single assembly line--used space far more efficiently, freeing up 40,000 square feet of the company's 170,000-square-foot factory. That meant Buck could save money by moving into a smaller facility. As members of the executive team pondered new locations, they were struck by a more radical notion--getting out of California altogether.
At first, it seemed inconceivable. Buck Knives had deep roots in El Cajon. The average tenure of its employees was 15 years. Churches held services in the company cafeteria. Girl Scout troops used the training rooms for cookie distribution. Both CJ and Chuck had been born and raised in the area. Their wives, their children, their friends, their careers--their whole lives were based there. Outside the factory stood a massive boulder inlaid with a brass plaque dedicated to CJ's grandfather, Al Buck. "As this rock stands immovable and solid," the inscription read, "Al was our rock in hard times and in good times." Were they really going to move that rock?
On the other hand, deep roots don't mean much if you go out of business. Electricity bills, workers' compensation, labor costs, and taxes were high everywhere in California, not just in San Diego. The blunt truth was that something had to give. The board told CJ to discreetly explore the idea of moving out of state.
In the summer of 2000, CJ got a call from a folksy, gravel-voiced gentleman named Bob Potter, who ran economic development for Kootenai County in the Idaho panhandle. Potter is something of a legend in business recruitment circles. He has lured more than 70 companies, representing more than 4,000 jobs, to a remote corner of northern Idaho--the vast majority from California. Potter subscribes to the Orange County Business Journal, the Los Angeles Business Journal, and the Kiplinger California Letter. "I read those religiously," the 79-year-old recruiter says. "I know what's going on in California." Thanks in part to his relentless wooing, Kootenai County is now home to 54,000 jobs and is gaining new ones at a rate of about 8 percent a year--one of the fastest employment-growth rates in the nation.
Through his contacts, Potter had heard that Buck was scouting locations around the Northwest. Like most Idaho residents, he was familiar with the Buck brand, which commands a cult following among outdoorsmen. "If you live in Idaho, you've got to have a Buck knife," he chuckles. Potter called to see if Buck might consider moving to the Idaho panhandle. Would the company be willing to let him perform a cost analysis? A few weeks later, Potter flew to California to present his report.
"Uprooting a company is a tough, tough thing to go through. You're uprooting families." His numbers made CJ sit up straight. Electricity rates were about half what Buck was paying in El Cajon. Workers' compensation was a third. Wages for manufacturing jobs were 20 percent less than what Buck was paying. According to Potter's figures, Buck could shave at least $600,000 off its manufacturing costs every year by moving to Idaho. It was an impressive presentation, and CJ needed time to mull it over. Potter sympathized. "It's a tough decision--especially for family-owned companies," he says. "Uprooting a company is a tough, tough thing to go through. You're uprooting families, uprooting kids." But he continued to press his case, pointing out that Idaho boasted good schools and affordable homes.
While CJ agonized, Buck's electricity bills kept mounting. In January 2001, Governor Gray Davis declared a state of emergency as blackouts rolled through California. Then came September 11, which shattered the knife business. Sales plunged. CJ laid off 40 employees, froze salaries, and took a 30 percent pay cut.
One day that fall, CJ drove to work and looked at the El Cajon plant with fresh eyes. His father had built it back in 1979; a youthful CJ had even turned the first spadeful of earth at the groundbreaking. He knew every inch of the factory floor. The whine of mandrels grinding steel in a fountain of sparks, the sweet aroma of coolant gurgling through machinery, the prickly heat of the tempering furnace, the white clouds of condensation boiling from the nitrogen freezer--these were the sights and sounds of his childhood. Many of the workers here had known him since he was a young boy catching polliwogs in a drainage ditch while his dad sweated away another Saturday afternoon at the plant.
Now as he eyed the factory, a terrible thought entered his mind: This place is sinking. In his gut, he knew Buck had to get out of California--soon. "There's a momentum required to move a company," he says. "It's like having an operation that can save your life. We had to do the move before it was too late."
A bidding war begins
The hunt for a new location took on a sense of urgency. Behind closed doors, Buck's executives drew up a wish list for their dream home. Cheap electricity. Good climate for business. Low taxes. A plentiful supply of labor. Good highway and rail connections. Proximity to a major airport. Access to a major port through which to import the cheaper knives from Taiwan. Most important, it had to have a good quality of life. After all, they were planning to move themselves and their families along with the factory.
With these criteria in mind, the Buck team scoured dozens of glossy brochures touting locations across the country. Within a couple of months, they had narrowed the search down to three major contenders: Redmond, Oregon; Spokane, Washington; and Post Falls, Idaho, a growing suburb of Coeur d'Alene.
CJ and Duckett made their first pilgrimage to the region in the late fall of 2001. They booked a hotel overlooking Lake Coeur d'Alene, where geese honked their way across the sparkling water. "The air felt good," Duckett remembers. He picked up a real estate magazine and goggled at the prices. The median home price in Kootenai County was about one-third of that in El Cajon.
Strung out along Interstate 90, just west of Coeur d'Alene, Post Falls is the kind of town where business attire consists of jeans and a Pendleton shirt. Forty years ago, there wasn't a single stoplight. "When I first came here, you worked in the woods, you worked in the mill, you worked in the mines, you pumped gas, or you were a bartender," says the mayor, Clay Larkin. Today the population is about 21,400, three times what it was in 1990. Everywhere you look, subdivisions burst through the fields where the teenagers used to go four-wheeling. Seltice Way, the town's main drag, echoes with the bleat of backhoes digging up dirt or leveling vast mounds of sand. Call centers, furniture makers, electronics, manufacturers, software developers--they're moving here. "The growth has been phenomenal," says Larkin. "We've been discovered." Why do people come? Some are drawn by the rugged grandeur of the mountains, lakes, and forests; some by the abundance of cheap land and affordable housing; some by the dream of escaping the rat race. Above all, they are drawn by the same force that propelled pioneer wagons and immigrant steamships--the promise of a fresh start.
The more they learned about it, the more Buck's team liked Post Falls, but the Idaho town wasn't the only suitor. Manufacturing jobs are the Holy Grail of economic development, and Buck's track record of community involvement made it doubly attractive to recruiters. "We had a good feeling about the company," says recruiter Roger Lee, who led Redmond's effort to land Buck. "After the whole Enron collapse, a family company with lofty commitments looked good."
Buck took a long, hard look at Redmond. Situated in the high desert east of the Cascade Mountains, Redmond is sunny, dry, and considerably warmer than Idaho. Several domestic knife makers are based nearby, which meant a ready pool of skilled labor and easy access to suppliers. Energy was cheap and labor costs, while higher than those in Idaho, were still below California's. Moreover, the quality of life was outstanding, especially if you liked to hunt, fish, raft, or ski. There were drawbacks, of course, such as a rinky-dink airport and no interstate highway, but in the spring of 2002, Oregon recruiters sweetened their offer. They would give Buck heavily discounted land, a five-year exemption on property taxes, reduced building fees, and a discount on sewer rates. Altogether the package was worth more than $1.5 million. "Oregon was a real player," says Potter, the Idaho recruiter. "Oregon had us beat."
Potter couldn't match those incentives, although he did persuade the Idaho Department of Commerce & Labor to give Buck $3,000 in training grants for every job it brought to the state. And he hammered away at his central point--that Idaho offered lower operating costs, lower taxes, and a more predictable regulatory environment. Buck was also attracted to Spokane, which is only 30 miles west of Post Falls and boasted many of the same advantages. Right around that time, however, the Spokane Spokesman-Review began publishing editorials lamenting the state of Washington's "big, bossy government." Potter, knowing that Chuck Buck was a steadfast conservative, made sure to send him the clips.
"I want to go to Idaho"
The Spokane Journal of Business ran a scoop headlined "Buck Knives Eyes Post Falls." Within hours, word hit the factory floor in El Cajon. So far, the hunt for a new location had been a closely guarded secret. That changed on April 2, 2002, when the Spokane Journal of Business ran a front-page scoop headlined, "Buck Knives Eyes Post Falls." Within hours, word had filtered back to the factory floor in El Cajon. Rumors flew and tempers ran high. Why hadn't anyone told them this was in the cards?
To quell the unrest, CJ convened an emergency all-hands meeting in the company cafeteria. Before a sea of anxious faces, he stood and explained that, yes, Buck was considering a move but had not yet made a final decision. It was a tense encounter. "They felt hurt," he says. "They felt betrayed. They felt like we weren't telling them what was going on." CJ learned his lesson. From then on, he resolved to keep workers in the loop with regular meetings.
The news that Buck might move to Idaho also sent a chill through public officials in San Diego. To encourage Buck to stay, the city assembled what it dubbed the "Red Team," including U.S. Congressman Duncan Hunter, State Assemblyman Jay LaSuer, and County Supervisor Dianne Jacob. They suggested that Buck shift production to evening hours when electricity was cheaper, or move the factory across town to an enterprise zone. "We did everything we possibly could," says Mark Lewis, the mayor of El Cajon. Unfortunately, the Red Team couldn't solve Buck's fundamental problems. The wild fluctuations in electricity rates had subsided, but rates were still high--and now workers' compensation was beginning to spiral out of control. For Buck, the Red Team came a day late and a dollar short. "I don't mean to belittle them, but it was meaningless," says CJ. "Their hearts were in the right place, but they didn't have the resources."
It was time to make a decision. During one skull session, as CJ and Duckett were hashing out the merits of the three sites, Chuck poked his head in the door. He had just come back from a trip to Idaho. He liked the panhandle's down-home attitude--and was uneasy with what he perceived as the liberal tendencies of Oregon and Washington. "I'm a typical conservative," he says. "I wanted to go somewhere where they run things on those principles." Chuck had also discovered that Idaho's governor, Dirk Kempthorne, was a loyal customer who carried a Buck knife whenever he rode his Harley-Davidson. "I want to go to Idaho," he said.
Chuck was the chairman of the board and the majority stockholder. "That pretty much ended the decision process," CJ recalls. It was going to be Post Falls. Now they had to figure out how to make it happen.
Buck reckoned that building a factory in Idaho would cost about $8.5 million. It would take another $4 million to relocate key employees and equipment. Offsetting that was the capital Buck could realize from selling the factory in El Cajon. The factory itself was perfectly sound, but the real value of the property lay in the dirt beneath it: 10 acres inside the city limits, which CJ hoped to sell to another manufacturer for $11 million. If the numbers penciled out, the move would pay for itself in three years.
When no such buyer emerged, Buck began courting residential developers. But that proved problematic as well. The site wasn't zoned for residential use. Even worse, it sat next to Gillespie Field, a small public airport serving light aircraft. Any developer who wanted to build houses would have to get a sign-off from the San Diego County Regional Airport Authority--and the pilots at Gillespie Field were dead set against residential development so close to the runway, fearing that the homeowners who moved in would eventually grouse about airplane noise and push the city into shutting down the airport.
Leery of getting bogged down in a lengthy zoning dispute, developers shied away from the site. Without a deal on its old factory, Buck couldn't raise funds to build a new one. The whole relocation project stalled. "It's a horrid position, to have your whole company waiting to be shut down," says CJ. "It was agony." It took an entire year before Buck found a buyer--developer Lee Boyd, who proposed to tear down the factory and build 97 houses, provisionally named Buck's Landing. Boyd was willing to pay $9 million, provided he was able to win permission from local officials. But in March 2004 the airport authority rejected his plan. Desperate to regain momentum, CJ asked his board for permission to at least begin drafting plans for a new factory in Idaho, despite the fact that no one seemed to want the El Cajon site. The board agreed. Finally, two months later, Buck found a buyer: Race Car Dynamics, a manufacturer of components for light trucks and off-road vehicles. Race Car Dynamics, which had outgrown its facility in Jamul, 15 miles east of El Cajon, liked the site but offered only $7.5 million.
CJ bit his lip and made the deal.
The "Hit List"
Meanwhile, the company had to confront the painful process of deciding who would move to Idaho--and who would be left behind. Moving everyone would simply be too expensive. "It was kind of disturbing," remembers heat-treat specialist Paul Farner. "You don't know if you're going to be out of a job. You wonder if you're going to be the person who goes to Idaho."
Managers in every department identified key employees who would be invited to join Buck in Post Falls and help train new hires. After several rounds of negotiations, the so-called hit list was pared down to 75 of the company's most crucial people. The rest--approximately 200 workers--would lose their jobs. "Obviously there was great disappointment," says Duckett. "But moving was a matter of survival."
Buck tried to ease the pain by giving workers a year's notice, providing severance packages, and working with the California Department of Industrial Relations to provide retraining. At the same time, the company had to woo the workers it needed to move north. Each was offered $6,000 to cover relocation costs and a bonus of several weeks' salary, on the condition that they stay for at least one year after the move. Buck flew workers and their spouses to Idaho and rented buses to take them to see schools and neighborhoods. Local officials like Potter and Larkin led tours and answered questions, which ranged from the cosmic to the mundane. Some worried that they wouldn't be able to find a church that met their spiritual needs. Others fretted about their teenage children's sporting activities.
"Racial issues were a huge thing. The media had painted this place as a haven for racists." A bigger problem was the culture gap between southern California and the Idaho panhandle. Kootenai County is one of the least diverse counties in America, according to the Census Bureau, with 95.8 percent of its population consisting of non-Hispanic whites. Worse, for several decades the area was the home of the Aryan Nations, a motley band of white supremacists headed by a former aerospace engineer named Richard G. Butler. The group is defunct, Butler is dead, and locals maintain that the overwhelming majority reject what he stood for. (In 2003, Butler ran for mayor of nearby Hayden, Idaho, and lost by a margin of 1,924 votes to 50.) Nonetheless, Kootenai County still struggles with the perception that it is unfriendly to minorities. "Racial issues were a huge thing," says Duckett. "The media had painted this place as a haven for racists." But those anxieties tended to melt away when employees took a look at the town for themselves. "This is as decent a place to live for people of color as any place in the United States," says Norman Gissel, past president of the Kootenai County Task Force on Human Relations. Duckett, whose fiancée is Hispanic, calls the whole issue "a major nonevent."
One thing that no one could soft-pedal was the weather. Post Falls gets an average of 50 inches of snow every winter, and in January the mercury hovers around 22° F, a slap in the face for anyone accustomed to the balmy climes of southern California. During one worker visit, employees awoke to a hailstorm. One of the spouses declared that she wasn't moving and refused to leave the hotel.
Affordable real estate was a pretty good consolation, however. In El Cajon, for example, Farner, the heat-treat specialist, lived in a double-wide mobile home with his wife, son, and five cats. "We were saving for a down payment," he says, "but we were always one step behind." In Post Falls, the couple purchased a 1,650-square-foot tri-level house on a half acre just a stone's throw from the crystal-clear waters of Hauser Lake.
In the end, 58 workers and their families decided to make the move. None of them, however, were from the sales and marketing department, which numbered about 15 employees. These employees were generally affluent enough to enjoy life in southern California. Rather than build a new sales force from scratch, CJ struck a deal. Buck would lease back a small section of the El Cajon plant for them and revisit the arrangement after two years. "We knew the company was vulnerable during relocation," says CJ. "We wanted to keep the familiar voices at the order desk for our dealers. Instead of disrupting the team, we'd leave them in place."
Hitting the road
Buck broke ground on its new factory in June 2004--more than a year later than CJ originally wanted. The long delay came at a steep price: $1.5 million in additional construction expenses, thanks to concrete and steel prices which had been driven up by the war in Iraq and the region's construction boom. Nonetheless, the new, 128,000-square-foot building was a gem. Located in an industrial park along the I-90 corridor, it was designed from the ground up to implement lean manufacturing in which workers operate in "cells," with emphasis on quality and flexibility.
As the skeleton of steel girders rose up from the Idaho steppes, Duckett had to solve an intricate puzzle: how to transfer production from El Cajon to Post Falls with as little downtime as possible. The first order of business was to build up three months of inventory to provide breathing space during relocation. He decided to move the machinery in two stages. First, he would transport the equipment that fabricated the parts, such as blades, handles, and so on. While this was happening, the assembly of those parts would continue at El Cajon. When fabrication was in place at Post Falls, assembly would move up to join it.
The move began the day after Thanksgiving 2004. Workers crated up an endless procession of lasers, stampers, presses, dies, drills, mandrels, grinders, and lathes, while a parade of 18-wheelers idled at the loading dock. Buck anticipated that each truck's trip would take five days: one day to load, three on the road, one to unload. It didn't always work that way. Two of the drivers, a father and son, quarreled on the way to Idaho and got into a fist fight. State troopers showed up and arrested the father at a weigh station on the Interstate, stranding his truck--along with a million dollars' worth of grinding equipment. "We had no idea where it was for about a week," Duckett says.
Buck Knives shut down the old plant on December 23 and shipped out the rest of the machinery. The workers packed up their tools and took their final paychecks. Walking through the cavernous building for the last time, his footsteps echoing off the bare walls, Chuck Buck blinked away the tears. "I thought we'd be there the rest of our lives," he says. "It was emotional to think about all the thousands of people who had worked in that plant making knives all those years. Almost overwhelming."
Meanwhile, CJ was busy organizing the work force for the Idaho plant. More than 3,000 candidates applied for 200 positions. Idaho's labor department helped Buck winnow this down to 400 applicants based on criteria such as manual dexterity, computer literacy, and proficiency in English.
The move to Post Falls meant big changes for Buck's labor setup. About 70 percent of the workers at the El Cajon plant belonged to an employees association--essentially, a union without affiliation or dues. The association's contract stipulated mandatory pay raises for its members based on seniority. In Idaho, Buck's executive group decided to eliminate the association. "From the office to the factory floor, now we have the same rules," says CJ.
CJ also had to manage his own family's transition, which turned out to be more complicated than he expected. Of his five children, three joined him and his wife in Idaho while the other two stayed in California to finish school. He traded his three-acre spread in the San Diego suburb of Lakeside for two houses in Idaho--a primary residence in the woods with its own trout pond, and a summer retreat on Lake Coeur d'Alene, with a private motorboat launch. "It's definitely a step up in the coolness factor," says his daughter, Sarah, who manages the company's retail division. "It's been an adventure."
The new factory's first blade rolled off the floor in February 2005. It was a Folding Hunter--the knife that made the company famous. The new knives arrived without a moment to spare. Buck originally reckoned that three months of inventory would be enough to meet demand while it worked out the kinks at the new factory. In the fall of 2004, however, Schrade, a major competitor, went out of business. Demand for Buck knives surged, burning through nearly all of the company's inventory.
It also took some time for Buck to stabilize its Idaho work force. When the company first explored the idea of moving to Post Falls, unemployment in Kootenai County stood at 8 percent. By the time the first knives were rolling off the line, it had dropped to 4 percent. "We were seeing 30 percent turnover," says Duckett. To hold on to its workers, Buck hiked starting wages from $6.50 an hour to $8.50. By the fall of 2005, as employees settled into the job, efficiency figures at the new factory passed the mark set in El Cajon by most measures.
Despite the hiccups, CJ is ecstatic, almost evangelical, about the move. "It's delivered everything we hoped," he says. Electric bills are roughly 30 percent what they would have been if Buck had stayed in California; workers' comp 10 percent; and labor costs 75 percent. The move reduced overhead and freed up capital for investment and product development. "It has reinvigorated this company, from the engineers to the factory floor," he says. "I could not be happier to be here. We're excited. We're kicking butt. It's reanimated a sense of pride in the company."
In honor of its new home, Buck stamped a tiny map of Idaho on every knife made in Post Falls in 2005. Above the factory, the state flag ripples in the stiff breeze, proclaiming the motto Esto perpetua--"Let it endure forever." And guarding the entrance is a hunk of rock inlaid with the brass plaque honoring CJ's grandfather. It was engraved in El Cajon--but the rock is proud Idaho basalt.
By Leigh Robinson
MANUFACTURERS across Wiltshire are being advised to adopt lean manufacturing before increasing prices to combat rising raw materials costs, after figures from the Office of National Statistics showed UK manufacturers prices climbed last month.
Research found that the producer output price, which measures the price manufacturers charge for goods, rose by 0.3 per cent in March.
The South West Manufacturing Advisory Service, the DTI-funded troubleshooter that helps manufacturers across the region reduce waste, cut costs and increase profitability, said that manufacturers were "between a rock and a hard place", with increased prices potentially driving away customers and rising costs decreasing profits.
Arthur Richardson, director of the South West MAS, said: "With increasing global competition, particularly from the Far East, the opportunities for manufacturers to increase their prices to cover costs, while at the same time keeping their customers, are slim. However, those that don't increase prices are facing the prospect of eroding already tight profit margins and endangering their businesses.
"Manufacturers should consider the alternatives before putting prices up.
"By adopting lean techniques, manufacturers are showing customers that all necessary steps have been taken. If manufacturers have not reviewed the leanness of their operations, how can they justify price increases to customers?"
Since its launch, the South West MAS has provided more than 2,000 manufacturers with expert advice, hands-on support, training programmes, workshops and seminars, which have generated £14 million of added value across the region.
The organisation states that many more companies need to come forward in order to take advantage of this support.
"Knowledge-based manufacturing is the only way forward as manufacturers increasingly struggle to compete on price against overseas competitors who are operating in low wage economies," Mr Richardson said.
"With overheads, raw materials and energy prices at a record high, now is the time for manufacturers to take advantage of the subsidised support available to help them become leaner and secure a profitable future."
Author: RP news wires
StockerYale Inc., an independent provider of photonics-based products, on April 25 announced it has implemented a lean manufacturing initiative.
Mark Blodgett, president and chief executive officer, said that StockerYale's Montreal manufacturing facility has implemented a lean manufacturing initiative for its laser production lines. Lasers represent approximately 80 percent of the revenues generated in this facility.
The Montreal site selected a cross-functional team and worked with Bell Nordic, a Canadian consulting and training firm, on team leadership and self-directed work team training. The company chose Bell Nordic to facilitate employee empowerment and mobilization for the kaizen approach to lean manufacturing. After training, the kaizen team implemented a revamped process flow for better customer response through shorter cycle times, improved product quality and for reduced waste costs from scrap, rework and warranty expense. Additional continuous improvement projects underway this quarter will complete a 5-S manufacturing environment and streamline strategic processes.
"During the development of the 2006 budget, it became clear that, in order for the company to meet its intentions of being EBITDA positive in 2006, the company needed to become not only more responsive to its customers, but also more efficient in its operations," said Blodgett. "Our customers demand absolute quality, on time delivery, short lead times and the ability to have customized products that meet their needs. We believe that implementing lean manufacturing will enable us to meet these needs.
"In addition to the physical changes in our Montreal facility, we have also implemented a series of metrics that enable us to see when we have issues on the production line or in other parts of the Montreal operation. We have not stopped these process changes at just the production line, as we are now looking to streamline our order cycle process to ensure quick responses to our customers and reduce administrative cycle time. Next, we will also address our supply chain process to eliminate non value-added activities there as well."
StockerYale, Inc., headquartered in Salem, N.H., is an independent designer and manufacturer of structured light lasers, LED modules, and specialty optical fibers for industry leading OEMs. In addition, the company manufactures fluorescent lighting products and phase masks. The company serves a wide range of markets including the machine vision, industrial inspection, defense, telecommunication, sensors and medical markets.
Switching to modular workstations has enabled a petroleum tank truck products manufacturer to introduce highly adaptable production cells as part of its ongoing lean manufacturing programme.
Switching to modular Lean Tek workstations from The Tube and Bracket Company has enabled Emco Wheaton to introduce highly adaptable production cells as part of its ongoing lean manufacturing programme. The new self-contained production cells can be modified easily and rapidly to support changing manufacturing requirements and priorities and deliver continuous business improvement. 'We are aiming for maximum flexibility in manufacturing methods and what we manufacture so that we can adapt to changes in the market as soon as possible,' said Brian Langsdon, production controller at Emco Wheaton.
'I wanted something that I could take apart and adapt whenever I wanted.' Emco Wheaton has made products for the safe handling of hazardous fluids for over 50 years and is the world leader in design and manufacture of petroleum tank truck equipment.
The company, part of Gardner Denver, has recently opened a new facility in Margate, UK, where it has been based since 1953.
For the last two years the company has been adopting lean manufacturing to replace its traditional batch and queue production.
The objective is to optimise the overall production process and implement cellular manufacturing and related concepts such as single piece flow, Kanban and 5S to support highly flexible production processes and continuous business improvement.
When it started its lean manufacturing programme the company fabricated its own workstations by welding steel components.
These workstations performed well and provided an interim solution but as the programme developed the company recognised that greater adaptability was required so that production cells could be modified and configured to meet evolving production requirements.
'The key benefit of working with The Tube and Bracket Company is the partnership we have developed,' said Langsdon.
'We discuss ideas and they come up with a solution quickly.' Working to Emco Wheaton's basic specification The Tube and Bracket Company devised and built ten workstations with modular Lean Tek components.
The range of interchangeable and reusable components includes tubes, brackets, wheels and accessories that can be assembled into lightweight and manoeuvrable workstations, carts and trolleys that offer greater flexibility and cost effectiveness than comparable devices made from welded steel and similar materials.
The workstations were designed specifically to be self-contained for use in production cells for two of Emco Wheaton's core products.
They include areas for product working and assembly and incorporate ancillary facilities for lighting, power and air supply.
Production schedules and other information can be displayed on small noticeboards integrated into the overall design.
Each workstation is mounted on locking wheels and can be moved or repositioned easily by one person.
In line with lean manufacturing thinking the workstations have been designed to optimise the working environment and occupy exactly the right amount of space for the process they support.
The modular nature of their construction means that they can be modified whenever production requirements change by altering the basic dimensions or by the addition or removal of components.
'The Tube and Bracket Company has given us nice clean workstations which include all the accessories for these production cells,' said Langsdon.
'It is key to the factory that everything has its place and it becomes obvious when it's wrong.' The Tube and Bracket Company assembled the workstations at its factory in Banbury and delivered them to Margate.
Small modifications were made during installation to ensure that the production cells were optimised for maximum efficiency.
Further beneficial changes were made as the production cells went live.
Each workstation originally had two locking wheels but it was soon realised that four would be provide better stability.
The Tube and Bracket Company supplied and fitted the additional components on site.
The workstation noticeboards were also repositioned to make them easier to see.
'We could not do this with a welded workstation,' said Langsdon.
'If a cell is not right we can take it apart and rebuild it.' The new production cells will enhanced Emco Wheaton's lean manufacturing capabilities and help it to introduce single piece flow for its core products.
As the company continues its drive towards lean manufacturing it plans to standardise on adaptable modular solutions for its production cell workstations and other equipment.
'One of the challenges with this type of change is that it is an ongoing process,' said Langsdon.
'We wanted to work with a company that understood what we're doing and could help us provide a uniform solution throughout the factory.' The Tube and Bracket Company provides lean manufacturing solutions that help deliver Kaizen-based continuous performance improvement to customers in manufacturing, engineering and production.
Its modular LeanTek system comprises coated steel piping, joints and fixtures that can be assembled into a variety of solutions including live storage, carts, trolleys and ergonomic workstations for use in Kanban and first-in-first-out stock management and throughout the manufacturing process.
These can be modified or reconfigured quickly and easily to meet process change.
The company offers a complete range of consultancy, project management, design, build and component supply services.
VKI streamlines manufacturing process, supply chain with QAD tool 5/1/2006 5:00:00 PM
by Vawn Himmelsbach
A company that produces coffee-brewing equipment for the North American market has expanded its use of lean manufacturing to drive costs out of its supply chain and manufacturing operations, while moving into new markets in Europe and Japan.
VKI Technologies has rolled out QAD’s MFG/PRO eB2 to eliminate parallel systems and ensure consistency across its operations, from the finance department to the factory floor. VKI, based in Montreal, has been a QAD customer for the past 15 years.
“We tried to apply some of those lean manufacturing concepts,” said Robert Primeau, director of business strategies and customer support with VKI Technologies. “Having that information readily available can provide the basic analysis to see customer profiles and customer sales.”
While lean manufacturing is not a new term, over the past few years it’s expanded beyond the automotive industry into other sectors, such as aerospace, consumer goods and industrial equipment. Lean manufacturing processes have revolutionized the way that many enterprises deliver products to their customers and manage their supplier relationships, according to a recent study by the Aberdeen Group. However, the study found that while C-level executives are enthusiastic about the benefits that can be derived by “leaning out” operations, there is a large 
